SAUDIS ARE BOXED IN BY CHEAP OIL
The newly elevated crown prince of Saudi Arabia needs oil to shake off its lows in order to implement his policies and modernize the kingdom, reports The Wall Street Journal.
Crown Prince Mohammed bin Salman is leading efforts to take state-owned Saudi Arabian Oil Co. public. The kingdom is targeting $60 a barrel oil in order to make the float, scheduled for 2018, a success.
The expected tens of billions of dollars generated from the listing are intended to be invested in a fund aimed at diversifying the country’s economy.
But the 31-year-old prince has a difficult task ahead as Brent prices have fallen 21.48% in the last 6 months and major oil producers who originally banded together to prop up oil have not come up with new ideas to reverse the slide.
Mohammed bin Salman greenlighted a move by Saudi Arabia, a member of the Organization of the Petroleum Exporting Countries, to push for global producers to cut supply and support oil prices.
Privately major producers have expressed concerns that rising output in countries exempt from the deal, as well as nonparticipants including the U.S., has undercut the oil cartel’s efforts.
Oil prices ticked higher on Friday, capping a tumultuous week for a market that continues to be plagued by a global glut.
Brent crude, the global oil benchmark, traded 0.4% higher at $45.40 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.4% at $42.93 a barrel.
MISSISSIPPI REGULATORS SEEK TO END SOUTHERN CO. ‘CLEAN COAL’ PLANT
Elsewhere, state regulators gave an ultimatum to Southern Co.’s ‘clean coal’ power plant in Mississippi – switch to permanently burning gas or switch off, said local authorities.
Regulators said they want the Kemper power plant, which has already taken $7.5 billion and seven years to finish, to run using natural gas going forward, reports Russell Gold.
Regulators don’t want the ballooning costs related to the company’s investments into ’clean coal’ technology to be passed on to electricity customers.
The plant has had difficulties making equipment meant to remove carbon emissions from coal, so called ‘clean coal’ technology, consistently work. President Donald Trump is a big proponent of the coal industry.
Due to the set setback, the Kemper plant has already been running on natural gas, not coal, since 2015. Regulators urge the plant to consider permanently using gas, otherwise the plant’s license could be revoked.
TESLA SAYS IT MAY PUT AUTO PLANT IN CHINA
Tesla Inc. said it is exploring opening a facility in China to build electric vehicles for the local market, report Tim Higgins and Trefor Moss.
China, the world’s largest market for new-car sales and a big consumer of luxury vehicles, is a crucial market for the Silicon Valley auto maker.
“Tesla reported over $1 billion in revenue in China in 2016, a figure that analysts say equates to about 11,000 vehicle sales. The company sold just over 76,000 cars globally last year,” the Journal reports.