More confident world economy

OPEC Bulletin Commentary January 2014

It is strange to think that the global financial crisis happened more than half a decade ago, so great was its impact on all walks of life at the time, particularly in the richer parts of the world.

The oil industry also felt the full force of it, with, among other things, crude prices experiencing unprecedented levels of volatility throughout 2008, to the detriment of all parties.

Five years on, there is still much uncertainty about global economic developments in the aftermath of the crisis.

However, when we compare the situation today with that of 2008 — and even the dark days of 2009 and 2010 — we find that the global economy is settling down again and looking to the future with more confidence.

This is the underlying message from the feature article in the latest OPEC Monthly Oil Market Report, which examines the subject of monetary stimulus and its impact on the global economy.

It concludes: “As long as economic growth remains modest compared to potential and inflation persists at low levels of below two per cent, efforts to strengthen growth in the major OECD countries will be ongoing, providing an important contribution to the global economic recovery.”

We may not be out of the woods yet, so to speak, but the trees are thinning out and the open spaces are becoming more prominent.

This is all good news for the oil industry.

As was stated at the press launch of the 2013 OPEC World Oil Outlook, oil will play a major part in satisfying the world’s growing energy needs, with ample resources and a diversity of sources of supply.

OPEC is ready to meet this challenge, Secretary General, Abdalla Salem El-Badri, stressed in his foreword: “Member Countries maintain their readiness to invest in the development of new upstream capacity, in the maintenance of existing fields, in the improvement of older infrastructure, in the construction of necessary pipelines, and in the building and expansion of oil terminals and refineries.”

These actions, he added, demonstrate the commitment of OPEC Member Countries to satisfying the needs of consumers in a timely manner.

And they go hand-in-hand with an improvement in the state of the world economy.

OPEC Bulletin January 2014

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