The Deputy Premier and Minister of Energy and Industry H E Abdullah bin Hamad Al Attiyah, has warned that 2009 could be a challenging year for the crude market as large oil consuming countries would use less fuel due to the global economic meltdown.
However, a financial analyst, Dr Nasser Al Shafi, said Qatar need not worry as long as oil prices remained above $40 per barrel since its budgetary estimates for the current fiscal year (2008-09) were based on this rate for crude.
Public spending here would be affected only when the oil rates climb down below $40 per barrel, said Al Shafi. He, however, added that given the recent slide in crude prices nothing could be said for certain. “Well, a decline in the prices is possible. We have our fingers crossed.”
And if public spending — the main driver of the economic boom in the country — comes down, a silver lining could be that the inflationary pressure would also ease,
he suggested.
Abdullah bin Hamad, however, told Qatar News Agency he expected 2009 to be a difficult year as all indicators showed a big decline in oil demand in the last quarter of the current year and the first quarter of 2009. He talked of increasingly bleak forecasts for oil demand growth from the Paris-based International Energy Agency. The IEA cut its forecast last week for global demand.
On an optimistic note, the Deputy Premier added: “We have to adapt to the situation. We have seen more difficult times than these. In 1985, the oil prices had slumped to $7 per barrel. And in 1997, the rates were $10 a barrel.”
“For 30 years, Qatar has been seeing fluctuations in oil prices, so this is not the first time we are exposed to lower crude rates,” he said.
The Pen
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