It was just announced that King Abdullah of Saudi Arabia has passed away on January 23, 2015 and that his half-brother, Prince Salaman bin Abdulaziz al Saud will take the throne as king. Many Saudis are either grieving the loss of a good king or celebrating the death of a tyrant, but this particular king's passing has many American businessmen paying more attention into the desert.
As soon as the king's death happened, oil prices went up by two percent. Oil trade has been at an all-time low recently. The average barrel used to be well over $100 but it just traded between $46-$47 on Friday. People would think that cheaper oil is good (because it means cheaper gas prices) but this is not necessarily the case for this situation. Many American oil companies had to start laying off employees because there is just not enough money circulating in the world of oil to match the large amount of production happening. But, interestingly enough, the United States GDP is expected to grow by half a percent because of $50 oil, and Saudi Arabia's is expected to go down by 2.5%.
I wonder what happened to the oil market when John D. Rockefeller died. This instantaneous price change and people constantly worrying about their market share is an old practice in US history, especially during and after the Gilded Age. Big businesses like ones that Rockefeller had carry a big portion of the economy on their back and usually do all right, but it is very hard to explain or predict the negative affects once the person in power is gone. From this point, everything depends on the new king and fluctuation levels of the economy. Many Americans are not only mourning the death of King Abdullah, but are also mourning the death of one of their beloved friends called potential prophet.
Link for article:
http://money.cnn.com/2015/01/22/news/economy/saudi-king-dead-oil/index.html
As soon as the king's death happened, oil prices went up by two percent. Oil trade has been at an all-time low recently. The average barrel used to be well over $100 but it just traded between $46-$47 on Friday. People would think that cheaper oil is good (because it means cheaper gas prices) but this is not necessarily the case for this situation. Many American oil companies had to start laying off employees because there is just not enough money circulating in the world of oil to match the large amount of production happening. But, interestingly enough, the United States GDP is expected to grow by half a percent because of $50 oil, and Saudi Arabia's is expected to go down by 2.5%.
I wonder what happened to the oil market when John D. Rockefeller died. This instantaneous price change and people constantly worrying about their market share is an old practice in US history, especially during and after the Gilded Age. Big businesses like ones that Rockefeller had carry a big portion of the economy on their back and usually do all right, but it is very hard to explain or predict the negative affects once the person in power is gone. From this point, everything depends on the new king and fluctuation levels of the economy. Many Americans are not only mourning the death of King Abdullah, but are also mourning the death of one of their beloved friends called potential prophet.
Link for article:
http://money.cnn.com/2015/01/22/news/economy/saudi-king-dead-oil/index.html
It's interesting to me that one man's death can completely change the economy of another nation.
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