The oil situation could be worse than we thought…

[Javaman]

http://www.wyattresearch.com/article/the-oil-situation-could-be-worse-than-we-thought/23161

>snip<

The story? The Saudis, as you may have hard, are increasing their social spending programs in an obvious attempt to deflate any “rebellious” ideas from their population.

They’ve recently announced a $125 billion spending program, which amounts to something close to 30% of GDP.

What it means is that the Saudi family will require a slightly…higher sustained price of oil in order to break even. From the FT story:
“The break-even oil price the Gulf kingdom requires to balance its budget will jump from $68 last year to $88 this and then $110 in 2015, according to new estimates by the Institute of International Finance, a leading industry group.”

(more at link. Interesting insight)

[woodsprite]

1. We won't fund our own social programs, but we will fund the Saudi's programs. n/t