Oil

Free-falling oil prices torment MENA markets

  MENA markets liquidity continued its momentum in November, with volume increasing by 20% and value traded by 7.7%, post the lulled market activity in the last quarter. With the exception of Oman and Jordan, other MENA markets witnessed rise in market liquidity, with Bahrain, Kuwait, and the UAE leading the charge. Bahrain showed the most improvement with value traded increasing by 268% and volume traded increasing by 167%, after being the worst hit in Oct’15.       SABIC (KSA)...

GCC liquidity squeeze could spur reforms: MR Raghu – Low oil prices could result in deficit of 7.9% of GDP in 2015

Raghu pointed out that the recent fall in oil prices by over 61 percent since June, 2014 due to a host of factors such as shale oil revolution in US, OPEC decision to retain their output levels amid signs of tenuous demand growth had spilled over into the GCC financial system through banking channels, leading to spurts in overnight lending rate. Raghu added that GCC countries continue to be heavily reliant on hydrocarbon revenues, despite their diversification efforts. IMF expects...

Oil prices now go beyond the supply/demand equation

Interview with Mr. Raghu, Head of Research, Markaz by Peter Duke, Sales Director, Fidelity Worldwide Investment. 2015 has seen oil prices drop to a new low amid a glut of supply in the region. But how will this affect the GCC and MENA economies? Will there be an end to the current situation? And will the prices stabilise before the end of the year or do they have further to drop? Peter Duke: Good morning welcome to the Fund Forum...

Weak Oil and Strong Dollar – A puzzling relationship

Introduction The relationship between oil price and dollar value is intriguing not only to the US and the oil-exporters, but to researchers and governments all over the world. Most commodities, including oil tend to be negatively correlated with the US dollar as most commodities are traded in dollar. The magnitude of the impact of dollar on oil and vice versa and its short term and long term impact on the economy provide interesting insights about the widely studied relationship between...

The Two Sides of Shale Oil

Shale will decline   Shale will be resilient Oil price has dropped from over $100 a barrel last year to $57 today   The Saudis misjudged or underestimated the growth of the shale industry leading up to 2014, from 2005 Over half a trillion dollars of capital invested so far, mainly through junk bonds   US shale frackers are not high-cost; they are mostly mid-cost Austerity rife among shale producers   Frackers could potentially induce cost savings of upto 45%...