Tue, 28 Sep 2010 02:34:00 +0400
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Not so long ago, a representative of the Saudi King’s was reported to have introduced a new development plan for Saudi Arabia until the year of 2030. It is named Vision 2030. The plan reveals the local authorities’ intention to introduced some fundamental changes to the country’s economy and financial system. They are aware of the serious dependence on crude oil exports, which is why they want to reduce this exposure to the international market of crude oil by making the local economy more diverse and less dependent on the local oil industry, especially amid still low oil prices and great uncertainty dominating today’s financial markets in general and the global oil market in particular.
The members of the Fed’s FOMC left the key interest rate unchanged at 0,25%-0,5% during the latest meeting last week. This is confirmed by the FOMC meeting minutes. To be more specific, the minutes read that the information received since the March meeting clearly indicates that the contemporary labor market is definitely improving and recovering despite the likelihood of another economic slowdown in the USA.
According to Andrey Gudkov, an observer for Deutsche Welle, the oil games played by Saudi Arabia may present danger to Russia and the USA. The be more specific, the observer says that the Saudis are playing dangerous oil games. They have been playing similar games in security and politics. Now they are playing those in macroeconomics. For instance, it was Saudi Arabia who intentionally disrupted the recent oil summit in Doha. On top of that, the Saudis announced their intention to sell tons of U.S. bonds to a stunning amount of $750 billion. Such unexpected steps may undermine financial markets worldwide and eventually affect a number of major and emerging economies, including Russia and the USA.
Low oil prices undermined the status of the Suez Canal. They say most ships find it cheaper to sail around Africa rather than sailing through the Suez Canal. Some market observers believe that the oil market crash resulted in multiple consequences. On top of billions of dollars of lost profits by the world's biggest oil exporters, sailing around Africa is no said to be cheaper than saving time by passing through the Suez Canal.