Experts: Death of Saudi king could worsen the oil war (The Telegraph) Saudi Arabias new ruler wasted little time after taking the throne in quashing speculation that a new broom in Riyadh would lead to the kingdoms controversial oil policy being swept aside. But King Salman bin Abdul-Aziz al-Saud, who is 79 and has already survived one stroke, should be viewed as a transitional monarch. For oil markets that could actually mean even more Saudi crude flowing onto the worlds markets, not less. Instead of bowing to pressure within the Organization of Petroleum Exporting Countries (OPEC) to ease back on its policy that has resulted in the price of oil falling 50 percent in the past six months, expect the new monarch to stick with the current strategy sanctioned by his predecessor. That could see Saudi Arabia turning the screw even tighter on its rivals in the oil market. Opec insiders fear this will mean Saudi Arabia actually increases its production of oil to 10.5 million barrels per day this year, up from its current output of about 9.2 million, regardless of the wishes of other members in the cartel as it seeks to fill the gap being wrenched open in the global crude market by the brutal price war. Markets are currently flooded with crude, while oil and gas companies are cutting back operations aggressively, which is just what Saudi Arabia had hoped would happen.
Posted on: Mon, 26 Jan 2015 22:33:15 +0000
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