Who is on the Oil Cliff?

The Saudi economy is short of cash, prompting both the public and the private sector to cut their expenditures; meanwhile, bank clients are withdrawing their deposits and taking new loans, meaning the economic outlook for the oil-reliant nation is rather gloomy.  Although the Saudi economy hasn’t been badly shaken yet by the decline in oil prices, it has by now lost its development momentum, meaning the nation’s capability to expand oil production is limited. As most Saudi energy projects are bound to falter amid the mounting disinvestment, crude prices will settle at a more stable foundation and the Kingdom will lose some of its historic pricing power.

For Russia, $30 is the number to watch.  Crude prices at that level will push the economy to depths that would threaten the nation’s financial system, according to 15 of 27 respondents in a Bloomberg survey. Lower prices for the fuel are next year’s biggest risk for Russia, which is unprepared to ride out another shock on the oil market, most economists said. Other dangers for 2016 include geopolitics, strains in the banking industry and the ruble, according to the poll of 27 analysts.