Sep 26, 2019

The fading Saudi oil freakout

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Data: FactSet; Chart: Axios Visuals

Remember the Jurassic era of oil markets in, uh, mid-September, when aerial attacks left the Saudis reeling and talk of big geopolitical risk premium was all the rage? Things look rather different now.

Driving the news: Both Brent and WTI prices have come down a lot since soaring after the attacks that initially knocked 5.7 million barrels per day of Saudi production offline. The chart above captures WTI's moves.

  • Prices this morning were around $61.15 for Brent and $56.14 for WTI.

Why it matters: The return of prices to nearly pre-attack levels shows the market effect of the Saudi moves to bring back output fast. But it's also a sign that soft economic conditions have reasserted their influence.

  • “Less than two weeks after the attacks on Saudi Arabia, the oil market has returned to business as usual,” Norbert Ruecker, head of economics at Julius Baer, tells Bloomberg.

What's new: "Oil steadied on Thursday due to optimism that the United States and China could resolve their trade dispute, though prices came under pressure from Saudi Arabia’s moves to restore output quickly after attacks on its oil installations," Reuters writes.

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The oil market's dueling pressures

Illustration: Sarah Grillo/Axios

Two pieces of news this morning distill the competing forces acting on oil markets these days.

The big picture: Geopolitical risks in the vital oil producing and transit region can cause short-lived price spikes, but at the same time, a drumbeat of bearish economic news is preventing a sustained price rise.

Go deeperArrowOct 11, 2019

Human rights concerns overshadow Saudi campaign to attract tourists

Illustration: Sarah Grillo/Axios

Saudia Arabia is trying to recast itself to the West as a more liberal, fun destination, but the country’s questionable human rights record continues to haunt its attempts to boost tourism and make its economy less oil-dependent.

Why it matters: Critics of Saudi Arabia claim the legal changes and popular entertainment meant to lure tourists distracts from human rights abuses and the country's involvement in the Yemeni civil war, per the Guardian. Saudi Arabia and Crown Prince Mohammed bin Salman's image on the world stage have also been starkly affected by the murder of journalist Jamal Khashoggi inside a Saudi Consulate in Istanbul 1 year ago.

Go deeperArrowOct 5, 2019

Saudi Aramco revs up IPO sales pitch

An Aramco oil refinery in Saudi Arabia in 1990. Photo: Tom Stoddart/Hulton Archive/Getty Images

Saudi Arabia's efforts to boost interest in the IPO of state oil giant Aramco are moving into higher gear.

Driving the news: The company posted a new "corporate overview" yesterday that pledges a $75 billion dividend in 2020 and for several years ahead.

Go deeperArrowOct 1, 2019