News

Opec must resign itself to $50 oil

Desert_oil_pumpsOpec will manage its members' output to keep the oil price between $45 and $55 a barrel because this is the highest range it can realistically achieve. The prediction from Legal & General Investment Management anticipates that, even at these comparatively low prices, the US shale industry will add almost a million barrels per day to its oil production each year between now and 2020. “It’s a trade-off for Opec between volume and price,” said John Roe, head of multi-asset funds. Members of the organisation could seize a larger proportion of oil sales by increasing output, he said, but prices would fall. Such a strategy would probably not succeed in putting shale producers out of business because the shale industry has proved more resilient to low oil prices than expected. “Given that demand is relatively insensitive to price, we see significant benefits to limiting production and supporting prices,” he added. Unless there are new supply disruptions or a dramatic fall in demand, Opec will need to maintain the production cuts it announced in November 2016 until 2020, said Roe. ©2017 funds global mena

Executive Interviews

INTERVIEW: Totally mega

Jun 13, 2018

In 2016, global consulting firm PWC forecast the emergence of five global ‘megatrends’ in the next two decades. Stephen Anderson, its Middle East clients and markets leader, talks about their...

INTERVIEW: Protecting the investment

Nov 23, 2017

Rasmala’s trade finance fund recently passed $100 million in assets. Doug Bitcon, head of credit strategies, explains why he has to be hands-on.

Roundtables

MENA ROUNDTABLE: ‘The story is about reforms’

Jun 13, 2018

Our cross-industry panel discuss the positive backdrop in Egypt, the Dana Gas controversy and the potential index upgrades of Saudi Arabia and Kuwait. Chaired by George Mitton in Dubai.

SOUTH AFRICA ROUNDTABLE: Airline syndrome

Jun 13, 2018

Our panellists tell us that instead of launching competing national projects, African countries should work together for the sake of a bigger capital market. Chaired by George Mitton in Cape Town.