Opec discussed on BTV Simulcast

Automatic TRANSCRIPT

Production cuts which came on top of the OPEC plus supply curbs will cease at the end of this month as the medical coverage that means the cartels told supply reduction this month old almost eleven million barrels a day will taper gradually in the coming months it created a better atmosphere for mold pretty get a mold understanding here yeah hope and wish that everybody conduct themselves in a more appropriate to and most of the limited way I would say not appropriate but most committed way so it said its purpose that's good morning this we're gonna come out he's the chief economist at Abu Dhabi commercial bank got Monica would you say that enough has been done from OPEC plus at this point to put a firmer floor under these oil prices I think so or anything oil prices move above forty dollars a barrel of Brent crude it's both the supply side a document from hospital so by death but also the greater confidence on on Tremont as the company's stock create clothes and the other side of the company economic activity that still remains the number of questions how that goes full lips the buildup in momentum into models but I think a big part of of the communication from the Saudi oil minister it is that they want to make sure that all countries meet that quota production costs well other than the button being on site they radiate UAE and Kuwait okay good morning tea it's Manistee thing that Darren lies perhaps part of the carrot and stick I applied by society the UAE and Kuwait when they pulled back side he's going to pull back from the acts of violence three counts that they made in June so to a certain extent this is you know a carrot and stick they they had what one point two million barrels all of additional reduction in I put yeah and I think that really shows that the educational caught reading was was hit with the news by the main uses to help rebalance the market and again if we look at the message after the OPEC plus meeting one side of it is to to increase confidence in the oil market that Jackson's extend the the initial two month production caught by another month before tapering the overall production by the group but Wilson it's it's very much that all the producers boss how flight behind making that commitment need to get to that level and the the the longer that the G. C. C. countries could produce less than that committed amount will will will allow others to to not meet that commitment so it is very much balancing bringing confidence back into the oil market but making sure they don't carry a greater burden are they happy then money so you have this whole debate as to what extent the Saudi economy is getting affected by all these disruptions one important indicators of course the three month cyber war and also the I or the United Arab Emirates in terms of the helpful financial conditions of what is your analysis what we've been looking for it because he is the cricket team in the banking system if you remember the twenty fifteen to twenty sixteen I've heard the G. C. C. it's called fly again because of the low oil prices usually the quickest heating the banking sector dry out the company reporting requirements increase on this time around we haven't seen that happening making sure that the conflict between the banking sector would be one of the key pillars of the policy responses especially in the UAE patrol says in part the ingredients well you know because the liquidity measures to increase government deported sitting in the seat you eat that creep going eight coal over things and making sure that they are liquidity said bye to continue to end the real economy I'm trying to put the real economy hearing this kind of it nineteen crisis when I was not the time the cuts I mean that seems to be that the sentiment from around the world yet you look at the restructuring that sad Saudi Arabia implemented think one of my GA's yesterday said the site was essentially kitchen sinking everything that they really wanted to try and achieve under this umbrella how do you how do you analyze that kind of thinking well I believe he I mean you're looking at a space to fight they called me only one flight across the Arabian house because it makes sense the widening in the fiscal deficit so we've seen for the P. eighteen truckloads in on this week quite a help in increasing and you can't help but at the other hand you you have to balance it with providing essential support to the economy to try and limit the the extent of the ticket nineteen crisis and again going back to oil prices finding support for the oil price it's great to be central to Saudi Arabia for the hospital reduce the pace of of physical attraction for quiet at the time but that you know the government remains the key driver to mom couldn't they called me so you're you're walking in a very very close balancing act and I'm a big part of Dr Olson's bomb and making sure that there's ample liquidity in the banking system they increased injected the culprit did this man plan has that this is an area that looked very tense he asked what is going to run a number by you and in fact the Bloomberg survey suggests that for the budget balance in the twenty twenty one the forecast is for a deficit to the tune of about eight point three percent it does that add up with what you factor you we've been crunching what prompted a large deficit and we we expected to be in in the double digits we we expected to be around fifteen percent of GDP by our current estimate of course it is oil prices continue to gain momentum stocks will be critical but also one thing that will be very important if I how much is the government going to pull back spending even though they announced that the reforms inmate that we've discussed before a critical point that the finance minister has made is that actual government spending will be in line with with the budget it's about because you're going to see increased spending related to healthcare and and the support system so you know I I think that you know that that is still the law requirement for government spending awful console already implying a deeper cuts and then been mentioned by the finance minister says that holds I think he's very critical for the deficit but given level eleven and the outlook for oil this yeah I think it's double digit deficit looks likely in our view okay Monica I stern warning them on economic chief economist at Abu Dhabi commercial bank thank you for joining yes if and.

Coming up next