Brent settled steady and U.S. crude slightly lower on Monday after prices were whipsawed by volatility as Saudi Arabia pledged to work toward oil price stability but traders worried about a global supply glut and signs of rising U.S. stockpiles.
The International Monetary Fund (IMF) is offering a warning and some friendly advice to oil exporting countries: Get you act together! The Wall Street Journal reports that the IMF is warning Middle Eastern oil exporters they could face a combined $1.0 trillion budget shortfall in the next five years if crude prices stay at present lows and economic reforms aren’t introduced more rapidly.
While crude oil prices have been cut in half, it seems Saudi Arabia is having a hard time paying the bills. Bloomberg News is reporting that Saudi Arabia is delaying payments to government contractors, some as much as months late, as the slump in oil prices pushes the country into a deficit for the first time since 2009.
Crude oil prices fell below $40 a barrel signaling that not all is well with the global economy. In a global equity market rout, fear trading has taken hold as traders run to the safe haven of bonds and run from just about everything else.