This final note today. Oil closed at almost $108 a barrel in New York this afternoon. That’s actually a good thing, ’cause it implies traders think the economy — and thus demand — is coming back stronger.
But that’s not really what I wanted to tell you. The anticipated future price of crude is a bit more relevant than today’s mark. So this item from the Institute of International Finance — that’s a global banking group — deserves a mention.
They figure the Saudi Arabian government, the world’s biggest supplier, needs oil to average $88 a barrel this year to break even — that is, avoid deficits. That’s up from a $68 break even point last year.
How come? All the spending the Saudi government’s doing to keep its citizens happy and not in the streets.