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$100 Oil Can Change the Saudi Sovereign Wealth Fund Paradigm

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Crystal ball predictions of US$ 100 per barrel of crude oil have returned for the first time in four years as the U.S. sanctions Iran’s exports. U.S. President Donald J. Trump has been pushing OPEC to prevent supply shortages. However, OPEC and its allies have not committed to increasing their supply enough to reduce prices. Saudi Arabia and Iran are both members of OPEC. OPEC’s hesitance to drive prices lower, along with supply drops from Iran on the order of 1.5 million barrels a day, made for bullish sentiment at the meeting of the Asian oil industry in Singapore. In a different response in October, Saudi Arabia Crown Prince Mohammad Bin Salman Al Saud told media outlets that Saudi Arabia will meet its promise of any supply loss from the Iranian sanctions. The U.S. State Department continues to ask for OPEC to tap its reserve supplies. U.S. National Security Advisor John Bolton also delivered a clear message to India about Iranian oil, commenting that it is the United States’ objective that there will be no waivers from the sanctions regarding exports of Iranian oil and gas.

Supplies

To further complicate the picture, oil-rich Venezuela is only putting out 2.5 million barrels a day, from a proven supply of 300 billion barrels. Aging oil tankers, a lack of qualified professionals, and a shortage of foreign technology have reduced the country to baring empty store shelves and enduring riots in the streets. In October 2018, Saudi Energy Minister Khalid Al-Falih sees less cause for concern, “The reason Saudi Arabia didn’t increase more is because all of our customers are receiving all of the barrels they want.” The dip in oil prices experienced since 2014 has put a strain on oil-dependent nations. For instance, in the last six months of 2014, as oil prices cratered, the Russian ruble lost over half of its value relative to the U.S. Dollar. Living standards in the country fell with the currency.

Oil Investments

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Calamos Investments to Acquire Timpani Capital Management

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Naperville, Illinois-based Calamos Investments signed a deal to acquire Milwaukee-based Timpani Capital Management LLC, which focuses on small and small-midcap growth investing. Founded in April 2008, Timpani Capital Management oversees around US$ 588 million in assets. The deal is expected to close in the second quarter of 2019.

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RDIF and Russia-Japan Investment Fund to Invest in Russian Subsidiary of SBI Holdings

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The Russian Direct Investment Fund (RDIF) and the Russia-Japan Investment Fund (launched by RDIF, the Japan Bank for International Cooperation and JBIC IG Partners) have reached an agreement with the Japanese corporation SBI Holdings to invest in SBI Bank LLC, SBI Holdings’ subsidiary in Russia. SBI Bank LLC will undergo a large-scale reorganization.

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Ocasio-Cortez and Maxine Waters to Oversee US Banking System via House

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The youngest woman ever to serve in U.S. Congress – starting at the age of 29 – already has an opponent in her sights. Freshman U.S. Representative Alexandria Ocasio-Cortez, often dubbed AOC on Twitter, was appointed to the House Financial Services Committee, where the democratic socialist will oversee Wall Street. This committee oversees the banks and financial institutions of the United States. With Republicans controlling the U.S. Senate and the White House, and the Democrats controlling the House, one can expect less game-changing bills being turned into laws in the banking sector.

While bartending and waiting tables at the Flats Fix taco bar in Union Square, Ocasio-Cortez upset the more centrist Representative Joe Crowley, Chairman of the House Democratic caucus. Encouraged by her success, other far left democrats are planning to challenge moderate democrats in the 2020 primaries. Ocasio-Cortez is also expected to further strengthen the influence of Chairwoman Maxine Waters of the House Financial Services Committee. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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