Low oil prices may not be good for global growth, says Abu Dhabi sovereign wealth fund research head | ZAWYA MENA Edition

Low oil prices may not be good for global growth, says Abu Dhabi sovereign wealth fund research head | ZAWYA MENA Edition:

The typical assumption that low oil prices are good for the global economy can no longer be held to be true, especially in the United States, according to Abu Dhabi Investment Authority's head of research.

In an opening address at the Alternative Investment Management Summit in Dubai on Monday, Christof Ruhl, head of global research for the world's third-biggest sovereign wealth fund, said that the shale revolution which has taken place over the past five years in the U.S. "alters the equation in a time-honoured way" between growth and oil.

He said that, traditionally, economists have said that a $10 decline in the price of oil equates to a 0.2 percent boost in global economic growth. "That relationship seems to have disappeared," he said, stating that in the U.S., at least, higher oil prices now equate to higher trade levels and higher investment. "The old thing that higher oil prices hurt consumption and vice versa is disappearing, as the U.S. consumer benefits from higher prices in some parts of the country and suffers from them in other parts.