Blockade has no impact on Qatar gas exports: IMF
10 Oct 2017 - 9:53
Satish Kanady | The Peninsula
International Monetary Fund (IMF) has officially announced that the Arab quartet country’s more than four-month old blockade against Qatar has not affected the country’s energy exports. The diplomatic rift has not impacted global liquefied natural gas markets, as Qatar continued its export, the Fund stated.
“The diplomatic rift between Qatar, the world’s largest exporter of liquefied natural gas, and several other countries in the region, including Saudi Arabia, has not affected liquefied natural gas markets, as Qatar’s exports have continued”, IMF said in its October 2017 ‘World Economic Outlook’ (WEO) released yesterday.
The IMF document noted the natural gas price index—an average for Europe, Japan, and the United States—decreased by 9.6 percent from February to August 2017. The decline was mostly tied to seasonal factors and robust supply from the United States and Russia, and lower oil prices, which some natural gas prices are indexed to.
The IMF’s Primary Commodities Price Index declined by 5 percent between February and August 2017. Some of the biggest price drops were among fuels. Oil prices fell by 8.1 percent between February and August, even as the Organization of the Petroleum Exporting Countries (Opec) and some non-Opec oil exporters announced in May that they would extend oil production cuts through the first quarter of 2018. The main drivers of lower prices were higher-than-expected US shale production and stronger-than-expected production recoveries in Libya and Nigeria. In addition, exports from Opec countries remained at relatively high levels, even with lower production. Following some strengthening in recent weeks, oil prices stood at about $50 a barrel as of late August, still lower than in the spring.
The Fund’s commodity price index is expected to increase by 12.3 percent in 2017 from its average in 2016, and then fall slightly again in 2018, by 0.1 percent. After averaging $43 a barrel in 2016, oil prices are expected to average $50.3 a barrel in 2017 (down from $55.2 a barrel in the April 2017 WEO), and stay at about that level in 2018. Nonfuel commodity prices are expected to strengthen in 2017–18 from their 2016 averages because of stronger demand for metals from China, tight supply conditions for food, and a general pickup in global demand. Looking further ahead, futures markets point toward a slight rise in commodity prices by 2022.
According to the updated WEO, the global growth is projected to increase from 3.2 percent in 2016 to 3.6 percent in 2017 and 3.7 percent in 2018—an upward revision of 0.1 percentage point for both 2017 and 2018 relative to April. Economic activity is projected to pick up speed in all country groups except for the Middle East, and forecasts of the strength of the outlook by region have changed only modestly.
In the Middle East, North Africa, Afghanistan, and Pakistan, growth is projected to slow significantly in 2017 to 2.6 percent (from 5.0 percent in 2016). In 2018, growth is expected to increase to 3.5 percent, mostly reflecting stronger domestic demand in oil importers and a rebound of oil production in oil exporters. In Saudi Arabia, although non-oil growth is expected to strengthen somewhat this year, overall output is expected to be broadly flat as real oil GDP declines as a result of the commitments under the extended Opec agreement. In 2018, growth is projected to increase to 1.1 percent, reflecting an increase in oil output associated with the expiration of the Opec agreement.