In an eventful overnight session which saw a historic transition in Saudi Arabia, an unexpected Republican victory in the Georgia Special Election, China's inclusion in the MSCI EM index and Travis Kalanick's resignation, S&P futures continued to fall, alongside stock markets in Asia and Europe, while oil prices extended their drop despite a larger than expected draw reported by API on Tuesday.
In a shocking development, on Wednesday Saudi Arabia’s King Salman appointed his 31-year-old son Mohammed bin Salman (his eldest son from his third wife) as crown prince, placing him as first-in-line to the throne and removing his nephew, 57-year-old Mohammed bin Nayef - the country’s counterterrorism czar and a figure well-known to Washington - from the royal line of succession, relieving him of his post as Interior Minister, and stripping him from all his titles.
A couple of weeks ago we expressed some level of 'amazement' at just how sophisticated, efficient and pervasive the 'Russian hacking' community had become after CNN reported that they had managed to hack into a Qatari News Agency and post a 'fake' news story all in an apparent attempt to drive a wedge between the U.S., Qatar and some of it's Gulf Arab neighbors.
The situation in the Middle East is furiously escalating with each passing day.
While today's news of Israeli financial support for Syrian insurgents came out of left field, our earlier assessment following the report of "turmoiling" Syrian rebels in the aftermath of the Qatar crisis still stands, namely that "the next major regional conflict appears set to be between Saudi Arabia and Iran. All it needs is a catalyst."
Authored by Cyril Widdershoven via OilPrice.com,
The fledgling production cut strategy of OPEC (Saudi Arabia) and non-OPEC (Russia and the FSU) shows that a new strategy is needed to counter the ongoing doubts in the markets.