Texas Wuhan flu: the governor extends "sanctions." Interestingly, auto traffic at rush hour seems a bit busier than last week. I guess more folks are finding that their job is essential. Essential to keep them from going nuts at home. The city isn't making it any easier, closing city parks. I don't think the governor said anything about closing down parks. Whatever. Now we'll have five-year-olds on bikes on city streets. Whatever.
Most irritating: companies telling me "they are here to help" when they are closed and under-staffed. Whatever.
Saudi Arabia In Deep Doo Doo
Saudi has two sources of income: oil and tourism.
Let's correct that: Saudi had two sources of income: oil and tourism.
OIL: from a SeekingAlpha contributor. Some nice data points. I will archive this article. SA articles generally end up behind a paywall. From the article:
From the time period of 2014 to 2016, Saudi Arabia attempted to crush the U.S. shale industry, believing the shale industry couldn't produce oil at a breakeven basis for less than approximately $70 per barrel. They were completely wrong in that assessment, as we all know.
In 2014 Saudi Arabia had foreign reserves of $737 billion. In 2015 they had to spend a minimum of $250 billion of its foreign reserves, reserves they say that are lost forever.
It also went from a budget surplus to a record deficit in 2015 (at that time) of $98 billion. The majority of projections have Saudi Arabia with budget deficits through up to 2028.
With breakeven Brent of $84 per barrel, those projections would probably extend further if the country decides to attempt to drive the competition out of the market with more production and lower prices.TOURISM: this has previously been noted, albeit in passing, on the blog. From aljazeera:
The IEA states that OPEC, from 2014-2016, lost about $450 billion in oil revenue as a result of low prices. To return to those levels or worse, at a time they're still trying to figure out how to bolster their foreign reserves and budgets, is unwise to say the least.
It's going to get even more tense amongst OPEC members when they come under enormous stress as a consequence of Saudi Arabia boosting oil production (including tapping oil reserves from storage) and exports.
Saudi Arabia has asked Muslims to wait until there is more clarity about the coronavirus pandemic before planning to attend the annual Hajj pilgrimage, the Minister for Hajj and Umrah said on state TV on Tuesday, March 31, 2020.Both were huge revenue sources for the government.
Earlier this month, Saudi Arabia suspended the year-round Umrah pilgrimage over fears of the new coronavirus spreading to Islam's holiest cities, an unprecedented move that raised uncertainty over the annual Hajj.