{"id":33650,"date":"2018-04-23T06:46:25","date_gmt":"2018-04-23T11:46:25","guid":{"rendered":"http:\/\/olduvai.ca\/?p=33650"},"modified":"2018-04-23T06:46:25","modified_gmt":"2018-04-23T11:46:25","slug":"saudi-arabias-100-oil-dilemma","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=33650","title":{"rendered":"Saudi Arabia\u2019s $100 Oil Dilemma"},"content":{"rendered":"

Saudi Arabia\u2019s $100 Oil Dilemma<\/a><\/h3>\n\"Saudi\"<\/picture>\n
\n

Saudi Arabia is rumored to want oil prices at $100 per barrel<\/a>, but if prices rise that high, it could sow the seeds of the next downturn.<\/p>\n

Saudi officials want more revenues for their budget and a higher oil price to bolster the valuation of the Aramco IPO. But that short-term thinking could spell trouble not just for them, but also for oil prices, and ultimately for longevity of oil demand.<\/p>\n

As Liam Denning of Bloomberg Gadfly points out<\/a>, in the past decade, while oil prices have surpassed $100 per barrel for periods of time, they didn\u2019t stay there for very long. In 2008, when oil nearly hit $150 per barrel, it was quickly followed by the financial crisis and a deep U.S. recession. Then, the period between 2011 and 2014, when oil was north of $100 per barrel, U.S. shale crashed the market with a wave of fresh supply.<\/p>\n

If Saudi Arabia aims to drive up prices to triple-digit territory once again \u2013 and to be sure, that is only a rumor at this point \u2013 there are plenty of ways that could merely create the conditions for another bust.<\/p>\n

First, oil prices are rising, in part, because demand is so strong<\/a>, not just because OPEC is keeping barrels off the market. Oil at $100 would essentially amount to a doubling of the price from the past few years, which would quickly put an end to high demand growth rates.<\/p>\n

A corollary to this is that $100 oil would likely impact economic growth. The economic recovery from the financial crisis in 2008 is almost a decade old at this point, much longer than the average upswing. History suggests that we are due for a recession at some point in the not-so-distant future. A spike in fuel prices around the world could help bring that on.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Saudi Arabia\u2019s $100 Oil Dilemma Saudi Arabia is rumored to want oil prices at $100 per barrel, but if prices rise that high, it could sow the seeds of the next downturn. Saudi officials want more revenues for their budget and a higher oil price to bolster the valuation of the Aramco IPO. But that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[6010,592,5332,600,701,846],"class_list":["post-33650","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-nick-cunningham","tag-oil-price","tag-oilprice-com","tag-opec","tag-saudi-arabia","tag-us-shale-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=33650"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33650\/revisions"}],"predecessor-version":[{"id":33651,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33650\/revisions\/33651"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=33650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=33650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=33650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}