Economic Commentary Volume 3 No 11/12 – November/December 2008 : Shaping Long Term Oil Price Expectations for Investment: Is It Workable? Is It Achievable? … (A Redispatch)
This issue is a re-dispatch of a paper that have been published a year ago under the title: “ Shaping Long Term Oil Price Expectations For Investment: Is It Workable? Is It Achievable?” and reprinted in MEES 50:51 dated 17 December 2007.
The paper draws on a background presentation prepared to support a panel discussion on the occasion of the 3rd OPEC Summit, (Riyadh, 15 November 2007) under the title “OPEC: Today’s Market Dilemma and Tomorrow’s Investment Challenge”.
The paper was, understandably, dismissed in a context of rapidly rising oil prices. Will it be in a context of rapidly declining oil prices?…[Details]
Economic Commentary Volume 3 No 10 – October 2008: A Cautious MENA Energy Investment Outlook : One Crisis May Conceal Another!
APICORP Research Economic Commentary for October 2008 summarizes the key findings of our investment review for the period 2009-13, under the title: A Cautious MENA Energy Investment Outlook : One Crisis May Conceal Another!. The commentary, which is attached, is published as an Op-Ed analysis in the Middle East Economic Survey dated 20 October 2008.
One year after its gravity became apparent, the US mortgage-induced credit crisis has moved into a protracted and more severe phase. The crisis has now the potential to slow global economic growth and, as a result, depress oil markets and prices. Even in taking a longer term view to investment, constrained capital (for both debt and equity) would combine with continuing escalating costs and inadequate feedstock availability to cap further the upside potential of the energy investment outlook….[Details]
Economic Commentary Vol 3 No 9 September 2008: Inflation in Mena Region: Causes Policy Responses and Challenge
Our Economic commentary for September addresses the broad and complex issue of Inflation in MEMA region: Causes, Policy Responses and Challenges.
After a long period of relative price stability inflation risks have reemerged as a global challenge with potentially serious socio-economic implications around the world. MENA region is no exception to this trend. In particular, petroleum-exporting countries, which have until recently enjoyed mild to moderate inflation, have mostly seen their situation deteriorate rapidly. This is not totally unrelated to the large increases in oil and gas export prices. Despite having set their budgets well below expected revenues, both governments and the private sector have enjoyed unprecedented levels of liquidity supported by strong growth in money supply. This begs the question of whether or not accommodative monetary policies should be seen as potential source of inflation? Or is this assumed cause just one of many internal and external contributing factors?
In addressing these questions and the policy implications they lead to we hope to contribute to a better-informed public policy debate…[Details]
Economic Commentary Vol 3 No 8 August 2008: Fundamentals or Speculation? A Critical Review of CFTC’s Interagency Task Force Report on Crude Oil Markets
In defying conventional expectations, crude oil markets and prices have puzzled and polarized oil analysts, economists and policy advisors alike. As the controversy has stimulated further research, valuable papers have recently been produced that deserve our attention and appreciation. CFTC’s interagency task force report is no less worthy of interest. The authors have shared rare professional skills and insights that will greatly enhance our understanding of structurally changing and volatile markets.
Obviously, it is not the intention of our review to weigh for or against ITF’s assertion that speculation has not systematically driven changes in oil prices. The review, however, highlights significant omissions and ambiguities, which do not appear to stem from the report’s interim nature only. The most obvious are the effects of US policy-related factors on market fundamentals, the implications of futures market backwardation for both low inventory levels and soaring speculation, and the absence of explicit affirmation or negation of a speculative bubble. As work continues, CFTC and the interagency task force should broaden their analysis and target a wider audience in order to validate and legitimize their conclusions…[Details]
Economic Commentary Vol 3 No 7 July 2008: Eye on Algeria: Revisiting MENA Macroeconomic Outlook – A Three-Pronged Approach
This commentary, which has been prepared by Wichai Turongpun, is an invitation to a further discussion of MENA macroeconomic policy stances. It is a revisit aiming to provide a new approach to the regional analysis. In this sense, it can be considered as an extension of our Economic Commentary Vol. 2 No. 11 dated November 2007. Given the current international economic context, the ongoing credit crisis and the tensions within many commodity markets, analysts have tended to highlights certain factors and ignore others. In this context, a call for a multi-dimensional approach to MENA macro-economic outlook is timely, to which we can now elaborate on the details (full text attached)…[Details]
Economic Commentary Vol 3 No 5-6 May-June 2008:Eye on Algeria: A clin d’œil to the WEF on the Middle East
“Les efforts de diversification des économies dépendantes du pétrole: L’Algérie dans le contexte du Moyen Orient et de l’Afrique du Nord” is the theme of our Economic Commentary for May-June 2008, which is attached.
This special issue takes a broader and longer-term view than the “Eye on Algeria” session organized by the World Economic Forum in Sharm El Sheikh most recently (18-20 May 2008). The commentary has been prepared in French in order to reach a predominantly French-speaking audience of government policy-makers, business and union leaders and opinion-shapers in the home country…[Details]
Economic Commentary Vol 3 No 3-4 March-April 2008: APICORP’s Annual Review of Global and Regional Economic Trends and the Energy Investment Outlook of the Arab World
With increasing globalization emerging risks are being felt across the world, though with varying degrees of intensity and time-lag effects. This is currently the case of the risks associated with the turmoil of the financial markets. While these risks are spreading globally, the Arab world’s exposure seems reduced or not yet fully felt. Indeed, the region’s economy, which has benefited from sustained high oil prices, has continued to perform remarkably well. However, with the weakening of the US economy and the slowing of global growth, the balance of risks to the Arab energy investment outlook has tilted further to the downside…[Details]
Economic Commentary Vol 3 No 1-2 Jan-Feb 2008: Diversifying MENA Petroleum-Dependent Economies – Where Does Saudi Arabia Stand?
No matter how Saudi economic diversification strategies are articulated and consensually validated, leveraging oil to create more jobs is likely to be the key policy driver. The biggest challenge, however, will be filling these jobs from a rapidly expanding domestic labor pool. This challenge can only be addressed if, on the one hand, progress in policy formulation is matched by the pace of implementation of reforms in education and transfer of skills and, on the other hand, if the whole process is driven by those who are deeply committed to it…[Details]