The turn of events in Saudi Arabia could push crude prices higher, but a bigger driver of prices will be OPEC’s impending decision on extending the production cut.
But equity investors in India need not panic. The possibility of a big jump in crude prices hereon appears slim as at this price many shale gas producers could up their output. Further, correlation studies don’t show high crude prices hurting stock market returns. On the positive side, sovereign fund flows from the Middle-East could revive if oil prices stay firm.
Saudi Arabia’s recent crackdown on corruption apparently helps Crown Prince Mohammad bin Salman in consolidating power while removing any challenger within the family. This will no doubt fuel geopolitical tension in the near term, and given Saudi Arabia’s hostile view of Iran, oil prices look set to rise. Read More…
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