Arab Today, arab today oil windfall boosts gulf spending
Last Updated : GMT 06:27:32
Arab Today, arab today
Arab Today, arab today

Oil windfall boosts Gulf spending

Arab Today, arab today

Arab Today, arab today Oil windfall boosts Gulf spending

Abu Dhabi - Arabstoday

The windfall from oil exports in recent months may have given the Gulf Cooperation Council (GCC) states enough cushion to enable them to carry on with their development projects and investment ventures for months in the likely event of another recession hitting the global economy, experts say. International oil prices have surged nearly $40 (Dh146.92) a barrel in the last six months due to the West\'s tensions with Iran over its controversial nuclear programme and supply concerns, given the unrest in several oil exporting countries in the Middle East. Brent crude traded a tad below $125 a barrel on Monday, and crude on the New York Mercantile Exchange was trading at around $109 a barrel. Coming out of the global financial crisis, these price levels are considered too high for oil importing countries, some of which risk slipping back into recession largely due to the strain of high cost of crude imports. \"The high oil prices have helped increase the foreign currency reserves of GCC countries and provided them a cushion against a future drop in oil prices,\" Mohammad Amerah, an Abu Dhabi-based economist, told Gulf News. \"The crude exporting countries know very well that the windfall gains do not last for long. This has happened before and will happen again. The countries may have already planned how they are going to use their surplus from oil revenues. In my view, much of the surplus funds would be deployed in developmental projects and will get invested through their sovereign wealth funds,\" Amerah added. Samuel Ciszuk, consultant with London-based KBC Process Technology Ltd, told Gulf News that oil prices are indeed at levels where more and more watchers are seeing a clear danger to the economic recovery of the US and the already very weak economic situation in Europe. \"Even in Asia, there are some disconcerting signs that oil prices might be causing a slowdown. From historic experience, at these levels, it would be expected that demand destruction is already happening, particularly in the US and Europe,\" Ciszuk said. He added: \"In the meantime, GCC states are, of course, earning record revenues, putting them in a good position to both deliver on increased social spending programmes, maintain aggressive econ-omic diversification and industrialisation, as well as build comfortable (sovereign wealth fund) reserves which could come in handy should there be a new global economic downturn.\" Bank of America Merrill Lynch in a recent report said oil prices are unlikely to fall drastically. \"In our view, Brent oil is unlikely to dip below $80 per barrel, on average, as significant non-Opec [Organisation of Petroleum Exporting Countries] supply constraints and rising Opec budgets will create a high floor on oil prices. But oil is unlikely to hover around its floor. Rather, we believe oil will remain a key constraint on global economic growth, suggesting that prices will continue to spike to ration demand back down to the limited supplies,\" it said. It said the world economy can hardly afford to spend more than nine per cent of its gross domestic product (GDP) on energy. \"In a supply-constrained world, increased liquidity should set oil prices on an upward path. In other words, with nominal global GDP estimated to expand to $92 trillion through 2016, demand rationing will likely require ever higher dollar per barrel prices. On our estimates, oil prices could even spike to $200 over the next five years,\" the report added. From gulfnews

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today oil windfall boosts gulf spending Arab Today, arab today oil windfall boosts gulf spending

 



Arab Today, arab today
Arab Today, arab today US, Britain ban laptops on flights

GMT 07:36 2017 Wednesday ,22 March

US, Britain ban laptops on flights
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today Hezbollah commander killed by own men

GMT 07:43 2017 Wednesday ,22 March

Hezbollah commander killed by own men
Arab Today, arab today Tunisian media host praises her new experience

GMT 12:35 2017 Wednesday ,15 March

Tunisian media host praises her new experience
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Yemeni official warns education is under threat

GMT 12:03 2017 Tuesday ,14 March

Yemeni official warns education is under threat
Arab Today, arab today 2017 already marked

GMT 15:25 2017 Tuesday ,21 March

2017 already marked
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Renault Trezor wins design award

GMT 11:56 2017 Tuesday ,21 March

Renault Trezor wins design award
Arab Today, arab today Palestinian police wage war

GMT 07:53 2017 Friday ,17 March

Palestinian police wage war
Arab Today, arab today Donia Abdel Aziz participates in "Game of Silence"

GMT 07:12 2017 Tuesday ,21 March

Donia Abdel Aziz participates in "Game of Silence"
Arab Today, arab today Mexico threatens to ditch US corn imports

GMT 10:34 2017 Tuesday ,21 March

Mexico threatens to ditch US corn imports

GMT 07:39 2017 Monday ,20 March

Dalia Mustafa believes in the presence of ghosts

GMT 19:27 2017 Saturday ,11 March

Boualsof launches "Priestess Kahina" collection

GMT 16:41 2017 Monday ,20 March

Preserving the memory of glaciers

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 14:17 2017 Monday ,20 March

Cholesterol-slashing drug not impair brain

GMT 17:08 2017 Saturday ,18 March

Reveals secrets of tourism flights to space

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 22:39 2017 Thursday ,09 March

Zuhair Murad presents his new collection "Resorts"
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday