‘Global oil demand to increase by 1.65mn barrels per day’
KUWAIT CITY, June 19: Local and international economic reports have predicted positive and risky prospects for oil producing countries such as Kuwait, pointing out that at the moment things are moving forward towards improving the oil prices, continuing economic reform policies and programs, rising government investment spending and private sector growth, reports Annahar daily.
The oil prices increased regional tensions, lax attention to economic reform programs, and the role of global oil production and its role in reducing the fiscal space of oil-exporting countries. The Gulf states are still positive. For example, the UAE continued to be the first Gulf country in the field of domestic inflow of foreign investments by 10.3 billion dollars for 2017, while Kuwait attracted about 301 million dollars for the same year, while the UAE also ranked as the first Gulf country in direct foreign investments last year which amounted to $13.9 billion, compared to $8.1 billion for the State of Kuwait. On the GCC economic developments, the real growth conditions of the GCC were reported according to the latest report on the global economic outlook for June.
The real growth rate of Kuwait for 2017 was estimated at -2.9% and for Saudi Arabia -0.7%, with positive growth for the rest of the GCC countries.
Sources pointed out that the estimates of the Central Administration of Statistics in Kuwait based on the quarterly estimates for the last year indicated a positive real growth rate of 1% and not negative as the report indicates, due either to the different methodology of the report or different estimates of the infl ation rate used in the calculation of real growth.
The GCC economic developments refer to the GCC countries in the World Investment Report issued for the current year. The value of foreign direct investment for 2017 is estimated at 1.43 trillion dollars, a decrease of 23% compared to 2016, despite the acceleration rate of growth of gross domestic product and global trade.
This decline is due to the decline in the value of holdings and the integration between countries by 22%, and the decline of new foreign investments by about 14% last year. In terms of foreign direct investment, total investment in the UAE increased by 9.6% compared to 1% for Kuwait in 2017, while foreign direct investment accounted for 12.9% for the UAE and 26% for the UAE for the same year. A report issued by the Ministry of Finance economic team indicated that the current account of Kuwait has achieved a surplus during 2017 worth 2.152 million dinars compared to 1.528 million dinars for 2016, while the balance of payments total surplus of 569 million dinars, against a surplus of 960 million for the year 2016.
The report said that the Central Bank’s data refer to 6 issues of bonds and drafts for one and three months, with values ranging from 160 to 360 million dinars, and returns between 2.25% to 2.375%. The report added that the local money supply grew by 0.4% in March on a monthly basis, in conjunction with the increase in deposits in the private sector of local banks and balances of credit facilities for residents and claims of local banks combined on the Central Bank treasury bonds and assets of the Central Bank and personal loans, while foreign currency deposits and term deposits with the Central Bank declined while interest rates rose on various dates.
Kuwait’s oil production during April reached 2.705 million barrels per day an increase of 0.1% compared to the previous month, with the price of Kuwaiti oil exported to 66.99 dollars per barrel during the month compared to 62.23 dollars a barrel in March, an increase of 7.7%.
Sources pointed out that the oil prices witnessed a positive development during the end of April and the beginning of May, with the resumption of talk about the economic embargo on Iran and the continuation of the policy of reducing production, which exceeded the commitment rate, during the month of April, while the production of OPEC countries to the lowest level was 31.9 million barrels per day with the trend of increasing the number of oil drilling rigs in the United States to 844 excavators, which may affect the price negatively.
Sources also pointed out that the OPEC report for May that the growth of global demand for oil for 2017 was not subject to change compared to last March which remained in the range of 97.20 million barrels per day, was expected to increase demand for the current year by 1.65 million barrels per day to 98.85 million barrels per day. The report pointed out that in terms of the global supply of oil, the estimates of non-OECD countries fell slightly by about 0.01 million barrels per day to reach 57.89 million barrels per day with the reassessment in the world offer for 2018, especially the first quarter. It should be re-evaluated in raising the non-OPEC supply by about 0.01 million barrels per day.
The International Energy Agency report re-estimated global demand slightly and towards the drop from 1.5 to 1.4 million barrels per day with estimates of the recovery of demand in the first quarter of this year and the beginning of the second quarter and decline in demand in the second half of the year, due to high oil prices — the stability of global demand at 99.2 million barrels per day for the current year, pointing out that the global oil supply indicates stability at 98 million barrels per day for 2018