New King in Saudi Arabia and Increasing Oil Prices: A Connection?

There is a new king in Saudi Arabia and he is rearranging a few things. Interestingly, the firing of Prince Bandar - Chief of Intelligence and long time ally to the Bush's.

news.yahoo.com...

Meanwhile, there is some speculation we have seen the end of low oil prices.

www.fool.com...

I fully understand this is a very complex, multivariate issue. I am not implying there is a direct causality, but what of the correlation? Is there any?

Just throwing it out there to the ATS community for their input.

a reply to: ABNARTY

There was another thread that covers how Obama is making a deal with the Iranians. I wonder if Obama is doing that simply doing that because the new king was unfriendly to the West. In fact the Germans cut off weapon deals with the Saudi Arabians.

a reply to: starwarsisreal

A tangled web indeed. The hard part is putting it all together from the outside. I will read up on the weapons deal. Thanks.

a reply to: ABNARTY

I don't think they are related. I think its just coincidental. The glut of oil on the market is declining.

a reply to: ABNARTY

More than likely the current price spike is from some rigs closing(at least that's the excuse).

I wouldn't hold my breath on the Saudi King thing playing out though. Oil prices will go back up shortly. It will probably be for a few different reasons(er...excuses) according to the sources that be.

Ultimately it's just a game. They do this every once in awhile.

Everything is too convenient; The tiff with Russia, BP having their settlement decided(or downgraded), Saudi King dying, Halliburton mentioning that they have risk management that prepares for prices as low as 40 a barrel(that should be a dead giveaway that we are close to the bottom of this roller coaster, Halliburton is the government's third cousin).

yadda yadda yadda

Can be an olive branch towards Russia.

Bandar "Bush" is the one who pushed the terrorist attacks in Russia for standing behind Syria and not letting the Sunni get control over Syria. And then ISIS went into Syria.

Higher oil price benefit oil producers including Russia, Venezuela.

But I consider Saudi Arabia the most corrupt country in the world. They really need a change in that country.

a reply to: Xcathdra

OK. One vote for no connection what-so-ever. Simple supply and demand ONLY.

The rise (from $44 to $48) could very well be because of the ISIS attack on Kirkuk.

a reply to: masqua

yeah but last I heard ISIS was loosing Kirkuk, badly... has that changed?

a reply to: OrphanApology

You bring up some good points. It's those among others I am interested in.

Unlike some, I am not convinced it is simply just a market issue. There rarely is such a thing. Markets are emotional and can be volatile or artificially static. Commodities get played.

I am not saying a changing of the guard in SA is the causality. I am inquisitive as to the calculus of how it plays into the wide variety of correlation.

a reply to: LittleByLittle

An interesting hypothesis. Thanks. An olive branch is a possibility.

Unfortunately, I will remain skeptical on SA corruption regardless of who has the throne. I would love to see it improve but we shall see.

a reply to: OpinionatedB

It's hard to tell at the moment, since ISIS is currently engaged in the fight there. No telling how well they'll do in the coming days and weeks.

The Kurds themselves have been wanting to take Kirkuk from the Iraqis, so, as they battle IS troops, there's no telling what the outcome might be should they wrest it from Iraqi control.

It's a 3-way fight for the wells and 'huge reserves'.

a reply to: masqua

a reply to: OpinionatedB

While I would contend the latest from ISIS in the Kurdish region surely will generate some emotion in the market, I am not sure if it plays a major factor in OPEC's shot across bow to Russia and NA.

I fully accept I could be off the mark.

a reply to: ABNARTY

It would be hard to tell at this point how or if it will play into oil prices. So far the new Saudi King has kept the heads of the cabinet for oil the same. The changes have primarily been to security. If anything you could argue that somehow they will have ISIS play a role in the dramatics, but even that would be complete conjecture at this point.

To conjecturify(if that's not a word, it should be)...

I would say that they will eventually cut back production when the U.S. gives them the okay, as they are currently running in a deficit. My belief is this will happen shortly(first quarter), but who knows? They may wind up manipulating things using a different scenario not even involving SA, although I imagine that's unlikely.

You are right not to believe that things are not market based. The reason that you should not believe they are is because we are in no way dealing in a free market system. That's why markets cannot be determined by mathematics(such as normal distributions looking at data over long historical periods).

We are dealing with a subjective system that is not controlled by free market principles(although things like supply and demand do exist, they are controlled in a subjective manner).

a reply to: ABNARTY

No, you're correct that it's not a major factor. Kirkuk is only producing a small amount compared to the total production in Iraq, but it is a place that has reserves on hand. Any disruption to the flow of oil is bound to make the markets nervous.

Here's a backgrounder:

Iraq currently produces 3.5 million bpd and exports 2.8 million bpd, an unprecedented significant increase during the past 25 years. Iraq is now the second-biggest producer in OPEC after Saudi Arabia. It exports 2.2 million bpd from the southern oilfields and 400,000 bpd from the Kirkuk oilfields, which are one of the three giant oilfields in Iraq. Yet, the eastern and southern regions of Iraq are still the wealthiest in terms of oil resources. All giant and mega-giant fields are located in the south and include 70% to 80% of Iraq's proven oil reserves, while 20% of these reserves are in Kirkuk, Mosul and Khanaqin.

Read more: www.al-monitor.com...##ixzz3QQOrsCxn

Upon further review: I guess there is no immediate change to SA/OPEC's policy of pumping:

www.reuters.com...
www.telegraph.co.uk...
www.theatlantic.com...

The OPEC contribution to the oil market will continue at least for now. However, this brings up an interesting issue.

How does Russia and shale production in NA respond? Yet more artificial price collusion in order to stay afloat? I question how that would pan out as it only further benefits OPEC. IDK.

a reply to: OrphanApology

Greatly appreciate the conjecturification

a reply to: masqua

You bring up a good point.

While I stand by my belief markets are emotional and manipulated, there is at some point an underlining bedrock in true supply and demand.

The delta between the two is where the story is I guess.