Saudia Arabia’s Deficit Will Force a Production Cut in the Future

Alain Bokobza, head of global asset allocation at Societe Generale, told CNBC’s Squawk Box that OPEC was likely to be forced to cut production next year as low oil prices were hitting producing economies.

“We’ve seen OPEC not cutting when OPEC is bleeding currently” said Bokobza.
With Saudi Arabia’s budget deficit at 22 percent of the GDP, the oil behemoth can’t hold out that much longer, he added.

“At some stage they need to agree with some big OPEC producers, [and] that means Iran [to cut production], and they will come to the market sooner rather than later [to cut] production. That day, better not be short oil.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza