FX COMMODITIES
Arabia. With the situation in the Middle East best described as “fluid”, the
appointment of Mohammed
bin Salman (MbS for short) brings with it a few interesting angles to consider.
First, MbS is taking a very hard line with Iran. The standoff between The Gulf Countries
(lead by Chart 1 – Front month WTI with 8 day moving average
Te decline in oil prices is occurring at a time of some increased political uncertainty in the region and
recent news that the young Prince Mohammed bin Salman has been appointed Crown Prince of Saudi
Saudi and orchestrated by MbS) and Qatar is part of the complex ongoing battle for supremacy in the Middle East, and it would appear that, post the Trump visit, the Saudi regime believes it has US backing to be openly more assertive, at the same time that the US is reversing course on the Obama negotiated engagement with Iran. We view the increasingly assertive move to isolate Iran as a potentially destabilising move for the region.
Chart 2 – Saudi Reserves vs WTI Oil Price 14 FX TRADER MAGAZINE July - September 2017
Second, Saudi has started to look seriously at reforming the country and reducing its reliance on oil since MbS was brought onto the scene a few years ago. Arguably the flagship piece of this reform programme is the upcoming Initial Public Offering of Saudi Aramco in 2018. It has been very clear that the Saudi/OPEC production cut last November was designed to help move the oil price higher in part so that the Aramco IPO valuation would be higher. The lower oil price is becoming a problem for the IPO process and therefore the overall reform programme.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69
