Google+ Followers

Tuesday, 27 June 2017

Oil's in a Bear Market, and Stocks Will Soon Follow - Bloomberg

Oil's in a Bear Market, and Stocks Will Soon Follow - Bloomberg:

"Saudi Arabia's King Salman recently named his son, Mohammed bin Salman, as his successor. The 31-year-old crown prince plans to modernize the kingdom with his "Vision 2030" economic overhaul aimed at weaning Saudi Arabia off oil via increased private sector activity and foreign investment. His icon-breaking plan is obviously a reaction to the collapse in crude oil prices. It’s badly needed. Almost 80 percent of government revenue comes from oil money. Saudis enjoy a comfortable lifestyle, supported by oil revenues. Two-thirds work for government-related entities, with many in no-show jobs. The youth population is mushrooming, with 45 percent of the total under the age of 25, and the unemployment rate for those between 15 and 24 is 31 percent. GDP has been declining since 2014. Weak crude oil prices also threaten the crown prince’s plan to raise $2 trillion through Saudi Aramco’s IPO. The Saudis assume $60 per barrel for Brent crude in their Aramco calculations versus about $45 today. And the proxy wars with arch-rival Iran in Yemen and Syria are very expensive and never-ending, so with weak oil prices, the kingdom has been forced to borrow heavily from overseas. "

'via Blog this'