Saudi Foreign Exchange Reserves; OPEC Basket Pricing; Commentary -- April 2, 2022

The top two graphs were released overnight.

My hunch: Saudi Arabia not a bit happy with President Biden's decision to flood the USA with SPR oil.

Link here. Foreign Exchange Reserves.

During the last three months, the price of oil has surged, and Saudi production has maintained. Is anyone asking why Saudi's foreign reserve assets are falling, and not by a little? I assume gold is not included in these assets.

Four thoughts come to mind immediately:

• with uncertainty for the ruble, and concern about yuan / dollar jawboning, perhaps Saudi is replacing some cash with gold in its vaults? Or,
• Saudi has a lot more expenses for something not being talked about; upgrading military defense against Yemeni rebels?
• are we back to discussing the "break-even" price for Saudi Arabia
• remember 2014 - 2016 when Saudi opened the taps to try to crush US shale; didn't work; now the Biden administration does the same. It's pretty funny: opening the taps won't spur production, and that's ultimately what is needed according to many sources, including the Biden administration.
  

OPEC pricing:

The Biden Surge decision cannot be making Saudi too happy. My hunch is that the Biden administration made the announcement without a last minute telephone call to Saudi to give them advance warning. The Saudis had just announced they were going to raise prices for Asian delivery. Look how quickly the OPEC basket price dropped between March 24, 2022, and March 31, 2022.