• Tag Archives Riyadh
  • The Saudi-Qatar Diplomatic Dispute, Six Months Later

    Six months ago, the Gulf Cooperation Council, helmed as always by its de facto leader Saudi Arabia, severed diplomatic ties with Qatar. This move was apparently meant to punish the country for its supposed support of terrorism. Riyadh announced the closure of its shared land border with Qatar. The remaining GCC members denied Qatar use of their airspace and ports. The measures were meant to bring the Qatari economy to its knees by isolating the government in Doha.
    Why the Measures Failed
    At first, these measures seemed as though they might succeed. They quickly sent a shock through the economy, particularly in banking and trade.
    Since the Saudi announcement, an estimated $30 billion has been removed from Qatari banks, interest rates have risen, and deposits have declined. Foreign customers with deposits at Qatari banks have withdrawn and relocated their money. Deposits totaled 184.6 billion riyals ($50.7 billion) at the start of June; they have since declined to 137.7 billion riyals.
    Trade initially suffered too.

    This post was published at Mauldin Economics on DECEMBER 11, 2017.


  • The One Indicator OPEC Must Watch

    Authored by Nick Cunningham via OilPrice.com,
    ‘We will not let go of our current approach until we reach a balanced market,’ Saudi oil minister Khalid al-Falih saidMonday at a news conference in Riyadh.
    OPEC ended months of speculation last week when it decided to extend its production cuts through the end of 2018, easing concerns that the limits would be lifted before the oil market was ready. But while it put some uncertainty to rest, the next question is what OPEC does when the oil market becomes ‘balanced’? What is the exit strategy?
    There isn’t one at the moment, and we can assume OPEC doesn’t know what comes next. But we do know that the group has one key metric in mind: inventories. The target is to bring global oil inventories back down to the five-year average.
    Oil inventories exploded between 2014 and 2017, hitting record levels that left the world awash in oil. That metric, arguably more than any other, exemplified the glut of supply that led to the crash of prices.
    It has been a stubborn thing, getting those inventories back down to average levels. A wave of shale bankruptcies didn’t do it, the vanishing rig count didn’t do it either. That led OPEC and a handful of non-OPEC countries led by Russia to limit their production. But even that deal didn’t seem to be doing the trick at the start of 2017, as inventories remained stuck at elevated levels. The euphoria that followed the announcement of the initial deal gave way to a renewed sense of gloom, which pushed WTI back down into the low-$40s by mid-2017.

    This post was published at Zero Hedge on Dec 6, 2017.


  • New Footage From Inside Riyadh Ritz-Carlton Reveals Princes Swapping Assets For Freedom

    A BBC reporter and film crew has gained rare access inside Riyadh’s “gilded cage” – the Ritz-Carlton which became a luxury prison after a dozen or more princes were detained during the shocking events which began with Crown Prince Mohammad bin Salman’s (MbS) internal purge on November 4th.
    ***
    BBC’s tour was “facilitated” under highly controlled and coordinated conditions, as initial photographs and short cell phone videos produced during the first few days of the crackdown revealed harsher and more restricted conditions as princes and/or their staff were forced to sleep on the floor camp-style in the middle of the luxury hotel’s lobby.
    According to the new BBC broadcast from inside the Ritz-Carlton, the princes are desperately scrambling to cut deals through their lawyers in order to secure release, this as new unconfirmed reports of torture have emerged:
    When people were brought here around midnight on November 4th they were understandably angry. Some of them thought it would just be a show and it wouldn’t last. And then when they realized they were here to stay they were furious. Almost everyone here – 95% I was told – are willing to make a deal, to give back what are said to be substantial sums of money in order to get out of here.

    This post was published at Zero Hedge on Nov 24, 2017.


  • SWOT Analysis: Turkish Demand for Gold Near a Four-Year High

    Strengths
    The best performing precious metal for the week was palladium, 0.41 percent. CenterraGold is set to buy Aurico Metals for $1.80 per cash share for a 38-percent purchase price premium on the Toronto Stock Exchange. Centerra currently holds more than $350 million in cash and has now secured a $125 million acquisition facility, according to Bloomberg. Gold prices rose after Saudi Arabia said a recent attempted missile strike at Riyadh’s airport could be an act of war by Iran. Additionally, Turkish investors are continuing to buy gold with demand expected to reach the highest since 2013. According to Google Trends, global searches for ‘buy bitcoin’ have overtaken ‘buy gold’ demonstrating a surge in popularity of the cryptocurrency. However, the BullionVault Gold Investor Index edged slightly higher to 54.6, demonstrating the number of buyers is higher than sellers. Weaknesses
    The worst performing precious metal for the week was platinum, down 0.82 percent. Due to platinum’s primary use in internal combustion engines, the metal could be among the biggest losers from electrical vehicle growth, reports Mining Review. The World Gold Council said it’s a tough quarter for gold as prices weakened in September and October. Global gold demand fell 9 percent in the third quarter as investor buying slowed and regulations in India tightened, reports Eddie van der Walt.

    This post was published at GoldSeek on 13 November 2017.


  • Making Sense Of Saudi’s ‘Game Of Thobes’

    Was Saturday a “Red Wedding” moment for the Kingdom of Saudi Arabia? As the plot thickens in Riyadh, here’s a roundup of the chatter on the streets…
    ***
    It started off with the resignation of Lebanese Prime Minister Saad Hariri, a clearly orchestrated move produced and executed by his paymasters in Riyadh.
    ***
    Hariri announced on a Saudi-owned channel from the Saudi capital that he was resigning his post in protest at foreign intervention in Lebanon‘s domestic affairs. The irony was lost on him.
    The ostensible reason he gave, as he invoked his late father’s name, was that he too is threatened with assassination.

    This post was published at Zero Hedge on Nov 6, 2017.


  • Is Saudi Arabia’s Oil Strategy Working?

    The IMF estimated that Saudi Arabia will need oil prices to trade at about $70 per barrel in 2018 for its budget to breakeven, a dramatic improvement from the $96.60 per barrel it needed just last year. Saudi’s improvement is the most dramatic out of all the Middle Eastern oil producers, and it also suggests the combination of austerity, cuts to wasteful subsidies, new taxes and economic reforms are starting to bear fruit.
    The improvement is all the more important because Saudi Arabia and its fellow OPEC members are restraining output as a way to boost oil prices. Selling fewer barrels means less revenue, although that is offset by the coordinated production cuts through the OPEC deal, which has helped raise prices.
    Nevertheless, there is something glaring about Saudi Arabia’s breakeven price: It is still far higher than the current oil price, which means Riyadh is still feeling the economic and fiscal pressure from low crude prices. ‘The reality of lower oil prices has made it more urgent for oil exporters to move away from a focus on redistributing oil receipts through public sector spending and energy subsidies,’ the IMF said in its report. Saudi Arabia and other Middle East oil producers ‘have outlined ambitious diversification strategies, but medium-term growth prospects remain below historical averages amid ongoing fiscal consolidation,’ the IMF added. In other words, austerity might help narrow the budget deficit to some degree, but it can also be self-defeating if it slows growth.

    This post was published at Zero Hedge on Nov 2, 2017.


  • Here’s Why Allowing Saudi Women To Drive Is Very Dangerous For The Rest Of The World

    The move risks provoking the already distraught Wahhabi clergy who fear that the monarchy is breaking its old alliance with them by sidelining the Kingdom’s most conservative religious gatekeepers in its quest for socio-economic modernization.
    ***
    Hardcore Wahhabis in Saudi Arabia have warned for generations that allowing women to drive would be a very dangerous development for the ultra-fundamentalist Kingdom, arguing that it would somehow degrade society by leading to an epidemic of immorality which would clash with what they believe is the purest way to practice Islam.
    That’s not why Riyadh’s recent decree granting woman this long-overdue right by next summer is so dangerous, however, as the real reason rests with the unpredictable and possibly violent reaction of the Saudi clergy.

    This post was published at Zero Hedge on Oct 2, 2017.


  • JUNE 21/GOLD UP $2.40 BUT SILVER DOWN 4 CENTS/OPEN INTEREST IN SILVER CLIMBS 1400 CONTRACTS TO ALMOST 200,000 CONTRACTS (1 BILLION OZ)/HUGE SHAKEUP IN RIYADH AS SALMAN’S SON MOHAMMED BECOMES CROW…

    GOLD: $1243.40 UP $2.40
    Silver: $16.36 DOWN 4 cent(s)
    Closing access prices:
    Gold $1246.50
    silver: $16.44
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1255.01 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1245.90
    PREMIUM FIRST FIX: $9.11
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1255.90
    NY GOLD PRICE AT THE EXACT SAME TIME: $1245.40
    Premium of Shanghai 2nd fix/NY:$10.50
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1247.05
    NY PRICING AT THE EXACT SAME TIME: $1246.10
    LONDON SECOND GOLD FIX 10 AM: $1242.50
    NY PRICING AT THE EXACT SAME TIME. $1242.80
    For comex gold:
    JUNE/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 9 NOTICE(S) FOR 900 OZ.
    TOTAL NOTICES SO FAR: 2621 FOR 262,100 OZ (8.1524 TONNES)
    For silver:
    For silver:
    JUNE 40 NOTICES FILED TODAY FOR
    200,000 OZ/
    Total number of notices filed so far this month: 957 for 4,785,000 oz

    This post was published at Harvey Organ Blog on June 21, 2017.


  • ‘Largest Single Arms Deal in US History’ Turns into ‘Fake News’

    Shares of US Defense Contractors not amused.
    Something funny happened on the way to the bank for investors who were trying to cash in on President Trump’s trip to Saudi Arabia and the $110 billion for US defense contractors that White House Press Secretary Spicer had touted on May 20 as the ‘largest single arms deal in US history.’
    The stocks of defense contractors had already soared over the past two years, with Lockheed Martin (LMT), Northrop Grumman (NOC), General Dynamics (GD), and Raytheon (RTN) up between 52% and 72%. But from Friday, May 19, through the end of the month, they got a big extra push of 5% to 6%.
    But since then, they lost ground. The magic is gone. What happened?
    Friday, May 19, President Trump departed for Saudi Arabia. And it appears a list of the ‘deals’ to be announced that weekend was already being circulated, and folks got busy buying up those stocks even before Trump stepped on the plane that afternoon.
    Then on May 20, in Riyadh, a laundry list of deals was announced, including that ‘largest single arms deal in US history.’ The following Monday and over the next days, the shares of defense contractors rose further, powered by visions of $110 billion in deals raining down on them.

    This post was published at Wolf Street on Jun 8, 2017.


  • Saudi Arabia To Trim Oil Exports To US To Force Inventories Lower

    Authored by Zainab Calcuttawala via OilPrice.com,
    Riyadh plans to purposely reduce exports to the United States to force a reduction in the latter’s sizeable inventories, which are preventing a greater rise in global oil prices, according to Saudi Oil Minister Khalid Al-Falih.
    Just one day after OPEC announced a nine-month extension to its November production cut deal, the top oil official told reporters on Friday that ‘exports to the U. S. will drop measurably.’
    Two sources close to the matter told Bloomberg that starting next month, Saudi crude supplies to American importers will be reduced to below one million barrels a day next month – a 15 percent decrease from the monthly average so far in 2017.

    This post was published at Zero Hedge on May 27, 2017.


  • The Definition of Hypocrisy

    Oh really?
    RIYADH, Saudi Arabia – The World Bank announced Sunday at an event with Ivanka Trump, the U. S. president’s daughter and senior White House adviser, that Saudi Arabia and United Arab Emirates have pledged a combined $100 million to a fund that will assist women entrepreneurs and small business owners.
    Oh do come on.
    The social media fawning over Trump’s (and Ivanka’s) involvement in this is nauseating. And no, it has nothing to do with any parallel to the Clinton Foundation (there isn’t one) either.
    It has to do with this, which the WSJ did note:

    This post was published at Market-Ticker on 2017-05-22.


  • Oil Slides After Saudis Unexpectedly Cast Doubt On Production Cut Extension

    One week after “unnamed sources” reported that Saudi Arabia had backed the proposed 6 month extension to oil production cuts, this morning oil is lower after the world’s biggest oil producer appeared to backtrack on its trial balloon from last week, when Saudi Arabia’s energy minister said it is “too early” to decide whether OPEC will extend its crude-production-cutting agreement for the rest of the year.
    Quoted by the WSJ, Khalid al-Falih, told reporters in Riyadh Monday that ‘it is premature to talk about extending the cut.’ OPEC’s 13 national ministers are scheduled to decide that question on May 25.
    Falih’s unexpectedly cautious tone “has taken some of the wind out of the bulls’ sails,” according JBC analysts.
    It wasn’t just the sudden Saudi retiscence: as the WSJ adds, Falih’s comments were among a range of factors keeping pressure on oil prices, chief among them that U. S. drilling is now set to increase by 123,000 barrels a day in May, according to the U. S. Energy Information Administration, the steepest monthly rise since February 2015. The EIA figures are the latest sign that U. S. companies have been quick to increase production because of higher prices and has ‘added another bearish element to the market,’ said JBC analysts.

    This post was published at Zero Hedge on Apr 18, 2017.


  • Saudi Crown Prince Flies To Washington To Meet With Donald Trump

    Saudi Deputy Crown Prince, Mohammed bin Salman, responsible for the kingdom’s reforms, left on Monday for Washington to meet President Donald Trump on a visit expected to pitch the world’s top oil exporter as an attractive investment destination. It will be the first meeting since Trump took office in January between the U. S. President and the prince who is next in line to lead Saudi Arabia, and is in charge of the kingdom’s efforts to revive state finances by diversifying away from falling crude oil revenues, of which the upcoming Aramco IPO will be a critical component.
    ***
    Under the Saudi plan, which seeks to promote the private sector and make state-owned companies more efficient, Riyadh plans to sell up to 5 percent of state oil giant Saudi Aramco in what is expected to be the world’s biggest initial public offering. Last year, facing a surging budget deficit due to slumping oil prices, the kingdom announced an austerity drive to reduce state spending, although industry sources say it has also promised major development projects later this year to soften the economic impact of those cuts.

    This post was published at Zero Hedge on Mar 13, 2017.


  • Cooking the Books: Saudi Aramco IPO Overvalued by 500%?

    The most hyped IPO ever – but what will buyers actually get?
    The world’s most valuable oil company, Saudi Aramco, is approaching its first IPO in 2018, as the government of Saudi Arabia prepares to sell off portions of the company in order fill a sovereign wealth fund crucial to the country’s transition away from an oil-based economy.
    Saudi Aramco is worth $2 trillion, according to Riyadh, and its five percent initial offering could yield $200 billion. This would be the largest IPO in history, blowing away the offering of China’s Alibaba in 2014.
    The problem, however, is that the company itself may not be worth as much as the Saudi government claims. Recent reports and growing skepticism regarding Aramco’s actual worth have cast some doubts on whether the world’s largest IPO will be as earth-shattering as originally thought.
    The original estimate offered by Saudi Arabia, which placed Saudi Aramco’s worth at around $2 trillion, was based on a valuation of Saudi Arabia’s oil proven reserves, 261 billion barrels. Multiplying at $8 per barrel, those reserves alone are worth $2.088 trillion. When Saudi Crown Prince Mohammed bin Salman made that original estimate, it garnered some skepticism: how could any company be worth such an astronomic sum?

    This post was published at Wolf Street on Feb 28, 2017.


  • Can Saudi Arabia Survive With Oil Below $60?

    Submitted by Gregory Brew via OilPrice.com,
    With the OPEC production deal holding, at least for the moment, questions have now arisen over how prospects look for the cartel’s biggest producer. It’s been a strange few years for the Kingdom of Saudi Arabia, as its endured budget deficits for the first time in its modern history, stagnation in oil prices and rising competition from other OPEC members and the American shale boom. Recently, talk has centered on the Saudi monarchy’s glimpse of the future: the Vision 2030 plan, whereby it hopes to diversify its economy and end its dependence on the mercurial oil and gas market. But can the world’s biggest oil producer and OPEC’s de facto leader pull it off?
    In the short term, Riyadh will continue to feel the pain of lower-than-normal oil prices. The growth outlook for Saudi Arabia has been slashed, as the International Monetary Fund (IMF) announced on January 16 that the world’s largest oil producer would see its GDP grow by only 0.4 percent in 2017. The estimate comes on the basis of the continued low price of oil, but more importantly on the country’s slashed oil production: as a result of the recent OPEC production deal, Saudi Arabia has agreed to keep its production level at or below 10 million bpd. This has resulted in a cut in its growth outlook, down from 2 percent in October, according to Bloomberg.
    This comes after anemic growth in 2016, where GDP expanded by only 1.4 percent. If oil prices stabilize, and the country’s economic forecast improves, GDP will likely expand by 2.3 percent in 2018.

    This post was published at Zero Hedge on Jan 20, 2017.


  • Saudis Signal Deeper Cuts After Deal With Non-OPEC Countries

    Saudi Arabia signaled it’s ready to cut oil production more than expected, a surprise announcement made minutes after Russia and several non-other OPEC countries pledged to curb output next year.
    Taken together, the Organization of Petroleum Exporting Countries’s first deal with its rivals since 2001 and the Saudi comments represent a forceful effort by producers to wrest back control of the global oil market, depressed by persistent oversupply and record inventories.
    “This is shock and awe by Saudi Arabia,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London. “It shows the commitment of Riyadh to rebalance the market and should end concerns about OPEC delivering the deal.”
    Oil prices have surged more than 15 percent since OPEC announced Nov. 30 it will cut production for the first time in eight years, rising this week briefly above $55. The price rise has propelled the shares of energy groups from Exxon Mobil Corp. to shale firms such as Continental Resources Inc.

    This post was published at bloomberg


  • Oil Tries & Fails To Reach $45 Overnight – Should Investors Take OPEC Seriously Anymore?

    Between risk-on sentiment from Comey’s latest bombshell and the earthquake in Cushing overnight, WTI crude prices rallied to $44.99 but as OilPrice.com’s Gregory Brew notes that in the midst of a week of bad to terrible news for oil prices, OPEC tried and failed to alleviate concerns that its meeting this November will, in fact, produce a meaningful deal on production cuts.
    ‘We remain deeply optimistic about the possibility that the Algiers agreement will be complemented by precise, decisive action among all producers,’ announced OPEC via its regular publication, ‘OPEC Bulletin.’ The announcement came as industry analysts and pundits criticized the organization, casting doubt on its ability to deliver a deal on a production freeze. OPEC was also very visibly lashing out at critics who have criticized its ability to influence markets in a substantive way.
    The September announcement helped push prices past $50 for over a week, before they plunged back down to $44 this week. The decline was largely attributed to massive inventory build reports from the EIA and API. The zig-zagging of prices mirrors a similar trend from last April, when an anticipated OPEC freeze deal at Doha helped send prices up before disagreements between Saudi Arabia and Iran caused Riyadh to scupper the deal, leaving markets to tumble.
    At this point, with an imminent OPEC meeting and consistently weak fundamentals, serious investors need to ask themselves: why trust OPEC? Why place any confidence in its ability to manage production or influence the market to send prices in positive directions?

    This post was published at Zero Hedge on Nov 7, 2016.


  • Saudi Bank Stress Builds as Kingdom’s Cash Injection Falls Short

    Saudi Arabia has work to do to ease pressure in the kingdom’s banking system.
    The interest rate banks charge one another for loans rose by the most since August on Sunday, extending a trend that’s slowing earnings and corporate borrowing in the world’s biggest oil exporter. The increase is defying the central bank, which has sought to ease the cash crunch by relaxing lending limits, offering new borrowing facilities and injecting funds into the financial system, including 20 billion riyals ($5.3 billion) pledged Sept. 25.
    ‘Rates won’t easily come down with one $5 billion injection,’ said John Sfakianakis, director of economic research at the Gulf Research Center Foundation in Riyadh. ‘Bringing them down would require a significant liquidity injection effort. The $5 billion is a good step forward, but given the asset size of Saudi banks it would require several additional injections.’
    Financial institutions in the Arab world’s largest economy are bearing the brunt of a halving of oil prices since 2014. Economic growth in the kingdom is slowing, curtailing bank deposits just as the government increases borrowing to help plug a budget deficit that last year was the widest since 1991.
    The three-month Saudi Interbank Offered Rate, or Saibor, used as a benchmark to price loans, has climbed 15 successive months to the highest in seven years, according to data compiled by Bloomberg. It gained 84 basis points this year to 2.386 percent on Monday, compared with a 27 basis-point advance in the London Interbank Offered Rate for dollars. Meanwhile, the loans-to-deposit ratio among Saudi banks, a key measure of liquidity, rose to 90.8 percent in August, the worst since 2008.

    This post was published at bloomberg


  • Member Of Saudi Royal Family Has Been Executed For Murder

    A member of the Saudi Royal Family has been executed for having committed a murder. The execution was carried out in Riyadh this afternoon
    — (@FaisalbinFarhan) October 18, 2016

    While we await news of the first, and quite historic, international Saudi bond pricing which at last check was said to be oversubscribed, in more surprising news, Al Arabiya reports that according to Saudi Arabia’s Ministry of Interior, on Tuesday it carried out the execution orders on Prince Turki bin Saud al-Kabir, a member of the Saudi Royal family.
    The prince had been found guilty three years ago by a Saudi court for murdering a young Saudi man following a group fight in al-Thumama region in the outskirts of Riyadh.

    This post was published at Zero Hedge on Oct 18, 2016.


  • Saudi Arabia Launches Sale Of 5, 10 And 30 Year Bonds, Seeks To Raise Up To $15 Billion

    Saudi Arabia has officially launched its much anticipated, first international bond sale on Wednesday, as the kingdom turns to debt markets to help ease a fiscal squeeze from the two-year slump in oil prices, which has slammed not only the country’s economy, leading to a period of unprecedented austerity resulting in widespread job cuts and a slowdown in local construction and infrastructure projects, but also has impacted the country’s bank sector where the largest bank has seen its shares plunge to all time lows, as bets on a currency devaluation continue to rise.
    As Bloomberg reported moments ago, the sale has officially started, with Saudi Arabia seeking to sell between $10 and $15 billion in three tranches, a 5Y, 10Y and 30Y offering. Pricing is expected to take place tomorrow, Oct. 19; with the books set to close at 5pm in NYT on Tuesday October 15. Tentative pricing will be as follows:
    Issuer: Kingdom of Saudi Arabia acting through the Ministry of Finance
    5Y: 160 area 10Y: 185 area 30Y: 235 area Expected Ratings: A1/AA- (Moody’s/Fitch) Format: 144A/RegS sr unsecured notes Books: C, HSBC, JPM Settlement: T 5 According to the FT, Riyadh is thought to be targeting a sale between $10bn and $15bn, making it the largest issue of international debt in the Middle East and a potential rival to Argentina’s record-breaking $16.5bn emerging market bond sale earlier this year.

    This post was published at Zero Hedge on Oct 18, 2016.