Global Economy and Energy Markets Weekly Commentary – 28th Jan ‘21

Dr Nakhle comments on the resurgence in virus cases, the economic outlook for 2021 and the impact on oil prices which have maintained the gains achieved towards the end of last year. According to her, the coming two or three months are more worrying because of the spread and mutations of Covid-19 in Europe, the US, Latin America and elsewhere, but current gains are likely to be sustained for the remainder of the year.

Dr Nakhle also discusses whether the interrupted vaccine rollout will challenge growth forecasts. While the supply chain problems will not be resolved overnight, the speed at which the vaccines have been developed, in less than a year, is still very positive. 

She further talks about Saudi Arabia’s position within OPEC+ following its unilateral cut, stating that had the Saudis not cut the additional one million barrels, prices would not have sustained at these levels. All producers, including Saudi Arabia, are benefiting. Moreover, the Saudi cut was not necessarily to achieve market balance, but mainly because of domestic economic needs and budgetary pressures. 

Dr Nakhle is joined by Walter Simpson, Managing Director, CCED, and Ahmed Mehdi, Research Associate, Oxford Institute for Energy Studies. Sean Evers, Managing Partner, Gulf Intelligence, moderates the discussion.