Most of the commentary we’ve seen about the IEA’s announcement has understandably focused on the political ramifications (a shot across the bow at OPEC) and, more frequently, its affect on oil price forecasts.
But what about the macroeconomic impact?
As far as we can tell, JP Morgan is first out of the gate in attempting to place a precise number on the amount of (don’t-call-it-a-)stimulus this will give to the consuming countries involved in the release:
The broader economic impact of this policy action is potentially significant. If our projections are realized, the IEA release provides the equivalent of a $140 bn stimulus to consumers (albeit with offsetting impacts on flows to producing countries) based on the change in crude prices from 2Q2011. Relative to the $130/bbl we had been expecting for 3Q2011, the benefit is closer to double that amount. The release will prove stimulatory to the global economy, particularly for Emerging Markets and the US. As such, if other economic headwinds can be overcome, it will have the effect of bolstering not just the world economy, but oil demand. This could create additional upside pressures on prices in 2012, particularly if, against our assumptions, Libyan output remains offline. For the time being, our 2012 forecast remains unchanged, but will be reviewed in the next Oil Market Monthly.
No comments:
Post a Comment