King Abdullah died early on Friday and his brother Salman became king. Here are 3 things you need to know about the new King and his policies.
1- New King, Same Oil Policy
Saudi Arabia’s new king is expected to continue a policy of keeping oil output steady to drive out rival producers, though the royal succession has focused market attention on the future of the kingdom’s long-serving oil minister.
Oil prices initially gained on the news that King Abdullah has passed, but on Friday’s New York session all gains started to erase as his successor said policies won’t change in the world’s largest crude exporter. West Texas Intermediate futures were little changed, having advanced 3.1 percent after the Saudi royal court announced the death in a statement. Brent remained 1.4 percent higher in London.
We could expect more strength on the US dollar if the oil prices remain down.
2- Saudi’s Oil Minister Might Step Down
While the new king is not seen as likely to change Abdullah’s policies of keeping output high to protect the OPEC cartel’s market share, some analysts say the succession has focused attention on the future of the oil minister Ali Al-Naimi, and whether or not he will step down.
Ali Al-Naimi has been the oil minister since 1995. It was reported that he expressed a desire to step down, but King Abdullah asked him to stay on for as long as he is around. So now that the King is gone, will he be too? And if he does go away, will that cause a change in Saudi energy policy?
3- King Salman has Three Wives
Not that it would effect the oil prices or anything, I just felt the need to mention it as this doesn’t go with our forex dance floor policies! He also has 10 sons, two of whom have died, and a daughter
More on the new King, he was born in Riyadh in 1935. He’s educated in religion and modern science. Salman has held several positions within the kingdom since 1954 and was named Crown Prince in 2012.
He was governor of Riyadh province for five decades before that, and during his five decades as Riyadh governor, he was supposedly rather adept at managing the delicate balance of clerical, tribal, and princely interests that determine Saudi policy, while maintaining good relations with the West.
So there, you have it. The Currency market remains more driven by yesterday’s ECB news and the Euros continues going down. As I covered yesterday, we could expect the EUR/USD pair to dance all the way down to the 1.08 level. Down low times on the forex dance floor!
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Have a great weekend and I’ll see you next week… From Miami!