Oil importers in Middle East face outside risk, IMF

Published October 14th, 2012 - 01:12 GMT
Oil importers in the Middle East face externalised risk
Oil importers in the Middle East face externalised risk

Oil-importing countries in the Middle East are experiencing heightened risks as their budgets and external balances deteriorate, the International Monetary Fund (IMF) said. Countries such as Egypt, which are dependent on fuel imports, are struggling to recover after the crisis in Europe sapped export markets, energy prices rise, and the government spends to meet social demands stimulated by last year's unrest, the fund said in a report yesterday.

It forecast growth of 2.1 per cent in the oil-importing group of countries this year, rising to 3.3 per cent next year, and warned that the rate may slip below that if the global environment continues to deteriorate. The IMF predicted an expansion of 2 per cent in Egypt this year, accelerating to 3 per cent next year - still only about half the average rate in the five years before the 2011 uprising. Current-account imbalances pose challenges as capital inflows weaken and declines in official international reserves make countries vulnerable to external shocks, the IMF said.

Oil headed for its first weekly gain in a month in New York after claims for United States jobless benefits dropped to the lowest level in four years and increasing Middle East tensions prompted concern crude supplies may be disrupted. Futures were little changed after rising 0.9 per cent on Thursday.

First-time unemployment claims fell to 339,000 last week, the lowest since February 2008, according to Labour Department data. Brent oil traded near the highest premium in a year to West Texas Intermediate grade after Turkey said a Syrian plane that it grounded contained munitions. Organisation of Petroleum Exporting Countries (Opec) output dropped to an eight-month low last month, the International Energy Agency (IEA) said yesterday in its monthly oil market report.

"The potential for a blow-up in the Middle East is being reflected in that persistently wide spread between Brent and WTI," said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. "Jobless claims were better-than-expected."Crude for November delivery was at $92.05 a barrel in electronic trading on the New York Mercantile Exchange, down 2 cents. The contract on Thursday climbed 82 cents to $92.07. Prices are up 2.4 per cent this week and down 6.9 per cent this year. 

© Muscat Media Group

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