México

Guyana

Trinidad
& Tobago

 




Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

 

What oil at $50 a barrel means for the world economy

Andrey Rudakov/Bloomberg


- Oil importers like South Africa, India among biggest winners
- Saudi Arabia and Russia revenues will hurt from price slump

By Enda Curran and Michelle Jamrisko / Bloomberg

HONG KONG/SINGAPORE
Petroleumworld 11 27 2018

Just a couple of months ago, major oil trading houses were predicting the return of $100 crude . Now, with oil prices at half that level, here's a look at what the slump means for the world economy.

Energy importers like India and South Africa will benefit; oil producers such as Russia and Saudi Arabia will hurt. Central banks under pressure to raise interest rates will get a reprieve; those looking to revive prices, such as the Bank of Japan, face another headwind.

Ultimately, much depends on how world oil demand shapes up as it gets battered by a stronger dollar and global trade spats, and how the biggest producers react.

Saudi Arabia sits between Russia on one side, its ally in managing production to support prices, and the U.S., where President Donald Trump is sending Twitter messages to the producer to get prices down. All eyes are on the Group of 20 meeting this week to see if a consensus on output emerges between the Saudis and Russians, and if that can carry through to the OPEC gathering next week.

Here's a Bloomberg Economics chart showing net oil imports (or exports) as a percentage of GDP -- cheaper oil helps those at the top of the chart and hurts those at the bottom.

What does it mean for global growth?

With the northern hemisphere winter approaching, the oil-price slump will cushion households and businesses during a period of slowing economic growth. Countries that import oil and have current-account deficits, such as South Africa, will also stand to benefit. China is the world's biggest importer of oil and is already battling a broader moderation in its economy amid a trade war with the U.S. and domestic challenges.

What does it mean for inflation?

Lower oil prices mean less pressure on inflation and less pressure on central banks to raise interest rates. One example: Bloomberg Economics says the energy slump is a game changer for India and could mean the Reserve Bank of India shifts to a neutral outlook.

How will emerging markets handle the price drop?

Every $10-per-barrel fall in oil prices boosts incomes by about 0.5 to 0.7 percent of gross domestic product in major emerging market oil importers, Capital Economics analysts estimate. The same discount will cause a 3 percent to 5 percent loss of GDP in most of the Gulf economies, and a slowdown of 1.5 percent to 2 percent of GDP in the U.A.E, Russia and Nigeria, all on an annualized basis, according to the analysts.

What does it mean for the world's biggest economy?

Trump has described the slump in oil prices as the equivalent of a tax cut. Still, diminishing American reliance on imported oil due to the emergence of shale production will erode the positive economic consequences at the industry level.

With assistance by Ramsey Al-Rikabi

 

Original article

 

_________________________

Story by Enda Curran and Michelle Jamrisko from Bloomberg.


bloomberg.com 11 27 2018

_________________________

We invite all our readers to share with us
their views and comments about this article.


Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95, '98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1


 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld   / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.