Economic updates
Our in-depth, independent reports cover the macroeconomic environment, the Saudi government’s annual budget, and Saudi Arabia’s monetary and financial developments, labor market, and inflation.
Quarterly Oil Market Update - Q3 2017: (OPEC's big decision)
Oil market reportIn its latest monthly oil report, OPEC has raised global oil demand forecasts for the third consecutive month, underlining the bullish tone towards oil prices in recent months. These revisions combined with geopolitical developments in Iraq helped push Brent oil prices up 6 percent quarter-on-quarter in Q3 2017, to an average of $52 per barrel (pb). More recently, rising expectations related to OPEC rolling over cuts in an upcoming meeting and regional geopolitical tensions have pushed Brent crude oil prices back above $60 pb. Prices are likely to remain elevated in the near term due to continued regional geopolitical tensions.
Oil Note: OPEC Announces Production Cuts
Macroeconomic reportOPEC agreed to cut its own production by 1.2 million barrels per day (mbpd), to 32.5 mbpd, on 30th of November. Oil prices immediately rose by 8 percent following the announcement and could rise even further in the short term. Whether prices remain elevated will depend on OPEC implementing its agreement with discipline as well as no major rises in US shale oil supply. Overall, whilst the OPEC cuts represent an up-side risk to oil prices, due to the hurdles mentioned above, we are not revising our current forecasts just yet, but will be monitoring developments closely.
