Following the death of the King of Saudi Arabia the World, and especially those of us working in the Oil Industry, await news of what the new King plans to do with the price of oil.
The Daily Telegraph has this story.
King Abdullah will be succeeded by the Crown Prince Salman bin Abdulaziz al-Saud. But the transition could bring the kingdom’s current policy of forcing down oil prices into focus.
King Abdullah was a key supporter of the kingdom’s oil minister Ali al-Naimi. His death may therefore weaken the position of this long-serving official. Mr Naimi has already faced criticised within the kingdom for allowing crude to tumble from over $100 per barrel since last summer.
Lower oil prices help consumers, have caused UK inflation to fall to its lowest level for years and made the Labour Party’s pledge to freeze energy prices look even sillier than it previously did.
However it also makes companies reluctant to invest in new projects – projects that will be needed when the global economy is back firing on all cylinders again (pardon the pun) in 2 or 3 years time.
We could find that in around four years time we’re staring down the barrel (oops another pun) of $200 per barrel oil due to lack of investment now.