All those naively hoping that Saudi Arabia has suddenly developed some altruistic bent and will act against its own interest by increasing excess production (which according to Jim Rogers it simply does not have), to keep oil prices lower, are advised to reevaluate. According to CBS, citing "the conclusion of an internal report prepared by a major investment firm based on information from its extensive and knowledgeable contacts within OPEC" Saudi Arabia won’t take "significant steps to bring down the price of crude oil until Brent, the grade traded most on the open market, reaches $120 a barrel, about 8 percent above current levels." More from CBS: "In the report, which was made available to MoneyWatch on the condition that the firm not be named because briefings with its contacts are off the record, the OPEC sources reiterate their earlier analysis of the oil market, which has proven to be on the nose. They contend that the delicate political situation across the Middle East and North Africa - including the fragile state of affairs within Saudi borders - is preventing the kingdom from doing the sensible economic thing and increasing production to keep prices under control." Which simply means that Rogers and all those doubting the veracity of Saudi's motives, not to mention the kingdom's rhetoric that it has boosted output to over 9 million bbls/day, have been correct, and the supply/demand dynamics of the stock market have been largely unchanged since Libya took over 1.6 million barrels of oil from the market.
More from CBS:
"Saudi authorities were reported to have raised output late last week to compensate for supply disruptions in Libya, but if the investment firm’s sources are right, as they have been since unrest in the region was in its initial phase, the Saudi move may not be as big or as prolonged as many expect. The firm’s report indicates that Saudi leaders have other concerns that would persuade them to take less robust steps than usual to stabilize oil prices:
“The main threat is . . . Saudi instability when the current king dies. We know he is very ill but obviously there is no indication of how critical that condition is. But it is acknowledged that the next transition will present a much bigger threat to internal stability. . . . Vested interest groups have been waiting for this transition to push their agenda. Saudi experienced considerable regional instability up to 10 years ago but bought it off with higher oil-based spending. Today the problem is as bad, if not worse. There have been only a few of the promised reforms. . . . Resentment towards the wealth gap with the royals is very high. . . . Even if/when the instability in other countries, such as Libya, settles, the Saudi succession threat is now firmly on the table. What happens in Bahrain could be very key. That alone will keep the oil market nervous for this year.”
The investment firm predicts that $120 a barrel will provide greater resistance for buyers to overcome than $100 did. Still, it warns that as the price approaches that level, Saudi Arabia will be inclined to increase production “cautiously rather than aggressively.”
The report does not address the impact of $120 oil on stocks and bonds, but it probably would be harmful to both. And what if oil doesn’t stop at $120? If Saudi Arabia is beset by a succession struggle and/or something similar to what has happened elsewhere in the region and oil prices shoot past that level, the reaction in financial markets is likely to be severe."
http://www.zerohedge.com/article/saudi-arabia-will-let-oil-reach-120-truth-behind-saudi-motives-exposed
Saudi 'day of rage'
a Facebook site calling for a "day of rage" in Saudi Arabia on 11 March has seen its number of subscribers increase from 400 to 12,000 in recent days.
Analysts fear the kingdom may face the same volatile generational schism that has affected Egypt and elsewhere.
Two-thirds of the Saudi population is aged under 30.
Youth unemployment is about three times the national average and there is an 18-year waiting list for government-provided housing.
http://www.bbc.co.uk/news/business-12594032
Saudi Arabia has sent dozens of tanks to Bahrain
Protestors are mainly Shiites account for about 70% of the Bahraini population, but have long complained of discrimination and other abuses by the Sunni Khalifa dynasty that has ruled the tiny Gulf nation for more than two centuries.
http://en.rian.ru/world/20110301/162803894.html
Saudi money supply jumps 8.1%
http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2011030194862
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