Just a few months ago predicted many grondstoffenanalisten a return to an oil price of 100 dollars per barrel. Now the oil prices at about half that level, sought Bloomberg what an oil price of 50 dollars per barrel means for the global economy.
Energy-importers such as India and South Africa will benefit from the lower oil prices, while oil producers such as Russia and Saudi Arabia, their oil revenues will see a decline.
The central banks under pressure to raise interest rates will get an extension, but the central banks that inflation would encourage, such as the Bank of Japan, with a headwind.
Ultimately, much depends on the development of the demand for oil in the world. The question will come under pressure by a stronger dollar and the handelsconflict, and how will the largest oil producers respond?
Saudi Arabia is stuck
Saudi Arabia is caught between Russia on the one hand, its ally in the managing of the production to support prices, and the United States, where president Donald Trump Twitter-sends messages to the producer in order to keep prices low.
All eyes are focused on the G20 summit at the end of the week to see if there is a consensus about the output between Saudi Arabia and the Russians, or that persists during the OPEC meeting next week.
the graphic below shows The net oil imports (or exports) as a percentage of the gross domestic product (gdp). Cheaper oil helps those who are at the top and hurts along the bottom.
What does it mean for global growth?
With the start of the winter will be the collapse of the oil prices to alleviate the pain for households and businesses in a period of slowing economic growth.
Countries that oil entering and current account deficits, such as South Africa, will also benefit. China is the world’s largest importer of oil and fight all out against a moderation of the economic growth in the midst of a trade war with the US 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. So would the cheaper oil to be a game changer for India and may mean that the Reserve Bank of India moves to a neutral attitude in respect of the interest rate and the interest rate does not further increase.
How will emerging markets cope with the fall in prices?
Every drop of the oil prices by 10 dollars per barrel increases incomes by about 0.5 per cent to 0.7 per cent of gross domestic product in the major oil importers in emerging markets, estimate Capital Economics analysts.
the Same price decrease leads to a loss of 3 percent to 5 percent of gdp in most of the Gulf states, and a slowdown of 1.5 percent to 2 percent of gdp in the United Arab Emirates, Russia and Nigeria.
What does it mean for the world’s largest economy?
President Trump, the decline in the price of oil described as the equivalent of a tax cut. However, the decreasing U.s. dependence on imported oil as a result of the emergence of schalieproductie, the positive economic impacts at sector level, erode.
