Saudi Arabia And The Present Oil Crisis

The impact of the current situation in Libya on oil prices offer some advantages to some of the OPEC countries. While oil prices soaring, driven in particular by fears of shortages, Saudi Arabia is trying to pull out of the game by offering his "help". Finally, Saudi Arabia is trying to utilize this opportunity to inflate its oil wealth to greater extent.

Last Sunday, the Saudi oil minister has said in his country, as a leading member of OPEC, Saudi Arabia is ready to meet any additional supply to full fill the international demand. More over Minister Al al Nuaimi told they have enough stock as reserve for the supply since the raise in demand of Asian countries are more. Moreover he said their offer would impact heavy on the oil markets. Saudi Arabia the world's biggest exporter had already lowered its production. It was 8.29 million barrels per day in March against 9.1 million barrels per day in February.

Most of the petroleum user countries urged the Organization of Petroleum Exporting countries to raise its production targets in an attempt to stop the current surge in oil prices. Here I wish to point out one thing, in late February, Tehran has called on member countries of OPEC, and in particular Saudi Arabia not to  unilaterally raise their crude production. Iranian Oil Minister Massoud Mir Kazemi, emphasized the OPEC members not to take hasty unilateral decisions in case of any shortage in Oil. And their argument is current production suffices to fill the gaps created by the Libyan internal crisis.

Gold hits another record

The gold price has again hit a record on Friday, getting closer every day just over a threshold of 1,480 dollars an ounce.

Main factors leading to this historical rise were; the worrying situation of some of the member countries of the European Union beset by serious difficulties with their internal debt and sustained rise in inflation.

The price of an ounce of gold has risen to its latest peak on Friday in the international market, by breaking the previous Monday record.

According to the Analysts the investors in Greece, Portugal remained concerned over the threat of default, a situation that encourages them to buy precious metals, which are the safe-haven assets.

 The debt restructuring in Greek, Ireland also raised the new concerns and hence the raise in the precious metals.

On Friday, ratings agency of France lowered the rating two notches in their country alone.

Another main reason for this rise is; the Investors are alarmed of the signs of runaway inflation. Many European countries afraid, that their local market gold price will be in raise compared with the expected price in China and India. The sovereign debt and the inflations of some of the countries are the main reason behind the rise.

Because of the market instability, threat of default in certain European countries and inflation kept the precious metal price on its present high. You have put eye on the market trend for few more days to predict the trend of the precious metal.

Stock Market Basics-4

The risks involved in investing Equities
The share prices are affected by factors that comes from within the company ( change of Management, change of policy of company, change of Human resources, fires and accidents in a company ), and the factors outside the company ( General Market condition, Economy, Sector demand and supply, Government Policies, International Wars, Foreign Policy, Demand in the International Markets, etc ).
So equities involves risk. But in a fixed deposit the risk is almost nil ( But it too have some risk. In case, if a Bank fails ). As we have seen earlier, Equities are riskier but they give good rewards. So while investing we should reduce our risk. How can one reduce the risk involved in equities.

Here comes diversification. One should not invest the entire amount at his disposal in a single share or sector. To reduce risk one should use basket of stocks. If one stock or one sector underperforms the market, the other sector or stocks which performs well will compensate the growth. Thus one can see good growth of his portfolio.

Impact of Tsunami on Japan’s Economy

Ever since Japanese Stock Index Nikkei touched 40,000 on January of 1990, it has been in decline. It touched a low of 7000 in 2008. For more than 18 years, Nikkei has been in decline. This says the sorry state of Japan’s Economy. Japan’s Economy was affected by the 2008 recession. Since then, it has been in a minor recovery path.

 

But the present Tsunami, has dashed the hope of full recovery of Jhttp://www.blogger.com/img/blank.gifapan’s Economy. It is being estimated that more than 200 billion of USD was lost in the Tsunami. World Bank has estimated that it may take another 5 years to repair the damages. It is surely a disaster for Japan Economy.

 

Constructing a Atomic power station is not a easy job. It needs lot of money and time. The damaged Atomic power station may need lot time and money to repair it. Since this devastation is caused not only by Tsunami, it is devastated by earth quake as well. Lot of buildings, roads and infrastructure has been damaged in the main land. Though financially, these loss can be manageable by any country, Japan at this stage, given their poor state of economy, cannot afford this disaster.

Aftermath of Japan’s Natural disaster in world Economy

Once again, Nature has demonstrated its vast devastating power on Earth and also it has been once again proved the instability of Human lives in this world. Even though, natural disaster are not new for the Japanese, the present devastation is caused by Earth Quake, Tsunami, and Atomic radiation. Japanese might not have imagined such a three frontal attack on them.

The only consoling thing is that only the coastal areas are affected by this devastation. The main land is not affected by Tsunami. This seems, that Japan will soon recover from this calamity. The resilience and discipline shown by these people shown by this people is astonishing . We have seen utter chaos in the streets of many Asian or European Or American countries whenever a disaster struck. But the Japanese kept their cool and they have moved on.

It is learnt the Tsunami might cost a lot for the insurers. So, it is bad time for Japanese Insurance companies. Japan is an Automobile Major. It may affect the production of these companies. Japan may need lot of money to be put into their economy. So this will surely dampen the export import balance of that country.  Already crude oil saw a mild sell off on the back of Japanese natural disaster fearing a lack of demand on crude.

Commodity prices may move on the back of fresh demand for reconstructing these regions. So metal prices may go up in the near future. The economic impact of this disaster most likely to affect Japan only. It is unlikely to impact other economies.