October 31st, 2008 Posted in Markets, Oil, Real estate
A $60 floor for oil prices seems reasonable at this point and is still profitable for the Gulf, although not quite like it was, when nearing $150/bbl. Abu Dhabi’s budget is reportedly based on $40-$50/bbl prices, while Saudi’s is said to be in the range of $55-$60/bbl. Meanwhile, Ahmed Al Mazrouie, Chairman of the UAE Contractors’ Association sees a silver lining: “Construction work in Europe and the United States will be cut back considerably as a result of the crisis and this will result in large supplies of raw materials on the market and a drop in prices. Gulf countries will benefit most from this.” See the images and clips below from Emirates Business 24/7.
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Abu Dhabi ‘will not be affected by oil price slide’
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| “The Abu Dhabi boom began when oil prices were still relatively low. And the really high prices, ranging around $140 per barrel, were based on speculation. The government knows prices go up and down and based their development plan on lower prices. Thanks to this strategy Abu Dhabi is very stable,” it quoted Abdulla Al Hamed, Chief Executive of Capital Group, as saying.”Indeed, officials used an estimated price of $45-$50 a barrel in the 2008 budget. This means that, with a current account surplus amounting to 25 per cent of the gross domestic product, Abu Dhabi has ample room for manoeuvre and sufficient liquidity reserves to balance its national budget.” |
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Realty projects will not be scaled down
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The demand for housing units is growing in most of the emirates
in the UAE. (IMAD ALAEDDIN) |
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