Saudi Aramco Abandons Planned Production Increase
January 30, 2024
The Energy market pulled back as traders eased prices off after a powerful rally on Friday. This pullback could have been some profit-taking after the weekend. The energy market sits and waits on how the US will respond to the death of three servicemembers in the Middle East. Some were looking for solid retaliation, and others for a more diplomatic approach to avoid a greater spreading of the conflict.
From Bloomberg. A big surprise for oil traders came from Saudi Aramco, which abandoned a plan to boost its oil output capacity in a significant reversal that’s raising questions about the kingdom’s view on future demand. Bloomberg Economics estimates Saudi Arabia needs an oil price of $108 a barrel to balance its budget and meet domestic spending by the sovereign wealth fund.
Energy prices pulled back yesterday afternoon as concerns over lower Chinese oil and fuel demand weighed on the markets. This was mainly driven by the news that a Hong Kong court called on China’s largest property development giant to liquidate.
The Fed begins its meetings today, and currently, the expectation is that the leave rate will remain unchanged.
The Eurozone’s economy avoided a recession in Q4 of 2023, with this morning’s GDP reading showing 0.1% year-on-year growth and no change in quarter-on-quarter terms.