Trump opined that the US must mull over ditching Riyadh as Washington is considerably getting free from dependency of the Saudi Arabian oil. The petrochemical sector index, the most sensitive to oil prices, lost 1.9 per cent. The worldwide Monetary Fund, which predicts Saudi Arabia will run a fiscal deficit of 19.5 per cent of gross domestic product this year, on Monday reiterated recommendations to the government to cope with dwindling oil revenues.
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Publishing the results of a recent consultation with the Kingdom, the Washington-based lender said it should continue moves to diversify its economy away from oil revenues.
In general, the latest forecasts show that oil prices may remain at a low level for several years, according to the expert. Foreigners in Saudi Arabia are now restricted to secondary market trading in local currency bonds and sukuk.
Saudi Arabia, at its core, is a fragile state.
The release further said that the Government of Sri Lanka continued to make appeals to the Saudi authorities and in this context, Rauf Hakeem, the then Minister of Urban Development, Water Supply and, Drainage, accompanied by the then Ambassador, Hussain Mohammed, handed over a clemency request from the President of Sri Lanka addressed to the Custodian of the Two Holy Mosques and King of Saudi Arabia, to Crown Prince H.R.H. It can live on savings for a while, but it needs a fairly quick win. Against that, it held foreign reserves of $672 billion in June, or 93% of GDP.
It is now at about 90 percent of Saudi production. In 2009, the taxpayer-financed Canadian Commercial Corporation, a federal agency that has traditionally brokered Canadian arms sales to the United States, began looking to markets such as the Middle East for new business as the U.S. cut defence spending. Within a few years, it will have overtaken Saudi oil production and will be the swing producer again. “We get nothing. And this is the problem with the world”, he underlined.
The Saudis made two mistakes. It’s now around $43 a barrel, less than half what it was a year ago. Most shale oil is profitable at $60 per barrel, and that proportion is rising rapidly as consolidation proceeds and efficiency rises.
“They are going to take over parts of the world that you wouldn’t believe”.
But a new factor soon disturbed this relative stability, pushing oil prices even lower: Evidence that the global economy was weakening, and that much of the weakening was occurring in relatively energy-intensive countries such as China and Brazil, as well as Russian Federation (itself an energy producer).
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However, the overall bearish market sentiment in Egypt can be attributed to the decline in oil prices, with the government’s involvement in the market only adding to the concern. Algeria, which relies on oil and gas for 97 per cent of export revenues, is already battling an Islamist insurgency and could find itself overwhelmed, like neigbourhing Libya, if its fragile economy crumbles.
