Saudi Oil Minister Fired...Get Ready For Oil To Be IN PURGATORY Again....#MirMak
If oil was in heavenly state for years, it went to hellish state for a few months, now i feel oil is about to enter a PURGATORY state. Directionless. Why ? Because Al Naimi, the 80 year old Saudi Oil Minister was suddenly sacked. Al Naimi was a force within the oil industry. A Minister since 1995 and part of Aramco since he was just 12 years old. Yes, 12 years old. I remember him telling me once that he started working at Aramco running errands at the age of 12. He said, oil is in my blood. A very well spoken man and a man of principles. Like him or hate him, he did not care. A short man with impeccable manners who loves his country. Extremely well dressed whenever he wore a suit. He, as an oil Minister was a balancing force. I may not agree with his policies but i liked his vision. He single handedly kept the oil industry going under many difficulties.
He is no longer there and his visionary leadership is no longer there
either. Rarely will you find me praising Saudi administration but credit
is due when it is due. The new Oil Minister, who is also the head of
Aramco, in my view lacks the diplomatic strength to fight the havoc in
oil markets at this time.
Bin Salman, barely in his 30's and equipped with an ego of an Elephant, is of the mind set that MIGHT will resolve all problems. And in KSA might means money. So, the thought process is that money will buy solutions. Selling Aramco with a $2 Trillion dollar valuation is not going to solve anything. Because $2 Trillion is not being raised, only $100 billion is being raised by selling 5% of the stake, according to my friends on Wall Street. A listing that will see the company on 3 exchanges at the same time, London, New York and Hong Kong. $100 billion will barely cover next year's Saudi budget deficit of $126 billion.
Summer is fast approaching, consumption will go up and that was the only hope that oil prices would stabilize, in my view. But this sudden shift in policy means the new Minister has no negotiation history with any OPEC members. It also means that since his loyalties will be with Bin Salman, the one who appointed him, he will tow his line, which is, no negotiation with anyone. Oil coming back to mid $40's is absolutely opposite to what KSA wanted. It wanted to put the world out of business of oil but oil prices rebounding means that their policy is failing. This move of bringing the new minister, i believe, is to put pressure on prices again. Oil i believe is back in PURGATORY. It can go in any direction again, in my view, downwards again. How far, only the next few weeks will determine.
Bin Salman, barely in his 30's and equipped with an ego of an Elephant, is of the mind set that MIGHT will resolve all problems. And in KSA might means money. So, the thought process is that money will buy solutions. Selling Aramco with a $2 Trillion dollar valuation is not going to solve anything. Because $2 Trillion is not being raised, only $100 billion is being raised by selling 5% of the stake, according to my friends on Wall Street. A listing that will see the company on 3 exchanges at the same time, London, New York and Hong Kong. $100 billion will barely cover next year's Saudi budget deficit of $126 billion.
Summer is fast approaching, consumption will go up and that was the only hope that oil prices would stabilize, in my view. But this sudden shift in policy means the new Minister has no negotiation history with any OPEC members. It also means that since his loyalties will be with Bin Salman, the one who appointed him, he will tow his line, which is, no negotiation with anyone. Oil coming back to mid $40's is absolutely opposite to what KSA wanted. It wanted to put the world out of business of oil but oil prices rebounding means that their policy is failing. This move of bringing the new minister, i believe, is to put pressure on prices again. Oil i believe is back in PURGATORY. It can go in any direction again, in my view, downwards again. How far, only the next few weeks will determine.
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