just over two years have passed since Saudi Arabia decided to try to squeeze the most possible us shale oil out of the oil market. The aim was also to overtake arch-rival Iran. Despite protests from other OPEC countries decided the world’s largest oljeeksportør to produce for the full, no matter how low the price fell.
In september, warned Saudi Arabia’s retreat. The kingdom gave notice that it was willing to cooperate with other OPEC countries cut production, in the hope of higher price.
the Country had shot itself in the foot. The royal family miscalculated the effects of priskrigen on their own income. The country now experience a severe budsjettkrise.
the Member states of the Organization of oil-exporting countries to reduce production by about five per cent. It is not impressive. But Saudi Arabia’s helomvendig removes a good deal of fear from the oil market.
today, it was agreed the most difficult – how produksjonskuttene to be distributed. Saudi Arabia agrees to take the largest produksjonskuttet. At the press conference, it was also stated that Russia will also reduce its production.
When oil producers are similar in Greece
oil prices bounced in the air as signals of an appointment was stronger throughout the day.
It has great significance for Norway, although it is too early to say anything about the effects on the price of oil on the slightly longer term.
If the finance minister Siv Jensen not had so many other concerns now, she would perhaps have danced for joy. The Norwegian state’s revenues from petroleum activities have fallen from 345 billion in 2013 to 132 billion in 2016, according to the latest estimates.
For Saudi Arabia, it is much more serious.
Estimates of the deficit of the state budget in Saudi Arabia varies between 13 and 20 per cent of GDP. It means that the deficit may be larger than in Greece when eurokrisen broke out in 2009-2010. And the government pays no longer all their bills, again as in Greece.
Kongehusets future may be on the game
A key difference from Greece consists of: the royal family is still creditworthy. A few weeks ago borrowed Saudi Arabia for the first time money. A bond issue of 17,5 billion dollars, the equivalent of just over 150 billion, was booked without any problems.
But with the continued budget deficit in the verdensrekordklassen, would national debt after a few years you could be dangerously great. Some could put a question mark on how much debt the country really can withstand.
Therefore, conducting the state now budget cuts that get sparepolitikken in Europe, even in Greece, to serve as a gentle breeze.
Then we come to the core. For Saudi Arabia, this is not only an economic drama. It is really about the political stability in the country.
- Oil price is politics. Especially in Saudi Arabia.
Support for the anakronistiske the royal family rests on a very generous welfare state, without equal in the world. It is this welfare state – subsidies to kongehusets minions – who are now in danger.
Why didnít the masses to continue the uncompromising priskrigen. Also arch-rival, Iran, know the pain from low oil prices.
Such were the member countries of the OPEC again agreed to cooperate.
the united STATES now means more than OPEC
the Question is what long-term effect of the renewed cooperation in the OPEC can have on the price of oil. In the united STATES, there has taken place a oljerevolusjon. Thanks to skiferoljen was the United states ‘ oil production has doubled in just five years, to about the same level as in Saudi Arabia.
Saudi Arabia has underestimated how quickly skiferoljeprodusentene have managed to cut their production costs. Production has not fallen nearly as much as Saudi-Arabia and many others had expected. Why was oljeprisfallet so powerful. In January the price was a short period of time under 30 dollars the barrel. .
the oil market is permanent changed. The point is that it is much easier and cheaper for the manufacturers of skifterolje to turn production off and on than it is for traditional oil producers.
It adds a ceiling for how high oil prices can go in the next couple of years. At an oil price of 60 dollars a barrel, the production of shale oil again go for full. Then there will be, in each case for a period of time, difficult to push the price higher.
the Knowledge of this makes prisoppganen in the course of Tuesday really was moderate. The current price, at 50 dollars, is lower than it was at the end of september.
A new – but short – golden age?
however, We have not seen the full effects of the low oil prices of recent years. Investments in new, traditional oil fields fall like a stone. At the same time goes the old fields out of production. We are talking about large quantities.
It is not at all certain that the production of shale oil can fill this hole. Therefore, it is not impossible that we about a couple of years again, in a shorter period of time, can get an oil price of 100 dollars.
But the chance that such a price will last, drops with weaker growth in consumption and an increased supply of renewable energy. Cheap energy may be the new normal once we pass the year 2020.
For the royal family in Saudi Arabia is the world is never as it once was.
Nor for Norway.
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