Opec strategy pays off
10 January, 2018 | By RICHARD THOMPSON
A series of events in the final weeks of 2017 provide a strong indication of what we can expect in the year ahead.
From an economic perspective, the most significant was the 30 November agreement between Opec and non-Opec oil producers to extend the oil production cap to the end of 2018. The move aims to rebalance global oil supply and demand, and remove damaging volatility in the energy markets.
The strategy is working. Oil prices are climbing and the improved outlook gives a degree of fiscal flexibility that will help governments to push ahead with difficult economic reforms.
An initial public offering (IPO) of shares in the fuel distribution arm of Abu Dhabi National Oil Company in December was the first of several listings planned in the region. This will be followed in 2018 by the Saudi Aramco IPO, which could be the biggest share sale in history. These sales pave the way for the more challenging privatisation of the region’s utilities and other state entities.
There is huge investor appetite to buy into the region’s prime assets, and as well as delivering substantial windfalls to governments, the privatisations will have a transformational effect on the region.
Set against this is rising political risk. The ongoing Qatar crisis, the anti-corruption arrests in Saudi Arabia and the missiles fired at the GCC from Yemen, all in December, could undermine investor confidence.
The coming year will continue to deliver shocks. But companies must not lose sight of the powerful, long-term fundamentals driving the region – a fast-growing, young population, an expanding middle class, ambitious and well-funded diversification programmes, and the world’s most abundant energy supplies.
Related Posts
Growth holds despite negative inflation and weaker project activity
READ MORE
A large youth base and a rapidly ageing population with prevalence of chronic diseases are expected to triple healthcare demand in the next 10 years.
Rising prevalence of chronic diseases, ...
READ MORE
Highlights from the third MEED Mashreq Construction Club
One consequence of the tougher trading conditions for construction companies in the GCC, is an increase in the number of projects being delayed, ...
READ MORE
Supply and demand imbalance is resulting in less office space being built and property owners offering tenants generous incentives
Dubai’s office market continues to be oversupplied, resulting in less office space ...
READ MORE
Analysts predict rising inventories will weigh on prices
The US Energy Information Administration (EIA) is expecting the average price of crude to be lower in 2020 than in 2019 due to ...
READ MORE
Emirate was finalising the location for its third major solar scheme earlier this year
Abu Dhabi’s state utility Emirates Water & Electricity Company (Ewec) could issue the transaction advisory tender for the ...
READ MORE
All new economies will rely on sustainability and digitalisation, Bee’ah group CEO Khaled al-Huraimel tells MEED
Sharjah will be the first city in the Middle East region to reach zero waste ...
READ MORE
Middle market companies in the UAE must prepare for a higher interest rate environment in 2022 and 2023, says latest briefing from Mashreq Bank
Businesses in the UAE must prepare ...
READ MORE
Public and private sector entities are rising to a growing demand for ESG-compliant products and services
Key takeaways:
The inaugural MEED-Mashreq Business Leaders Forum on 31 January highlighted how ESG principles ...
READ MORE
Manufacturing and industrial growth are quickly emerging as flagbearers for the UAE’s long-term economic diversification ambitions
Enabling a flourishing local industrial and manufacturing economy has long been a strategic priority for ...
READ MORE
UAE maintains its economic course
Healthcare market assessment of KSA
CONSTRUCTION CLUB 3: Changing attitudes is key to
Oversupply continues to challenge Dubai office market
Lower oil prices forecast for 2020
Abu Dhabi to make next solar move
Bee’ah sets sights on digitalisation and renewable energy
UAE mid-market firms must plan for inflation
UAE climate change minister, business leaders call for
The road ahead for UAE manufacturing
10 January, 2018 | .By RICHARD THOMPSON
