DEC. 16 2016 (The Conway Bulletin) — The collapse in oil prices since 2014 has hit the economies of Central Asia and the South Caucasus. Every now and then, though, a new touted solution emerges, be it maximising oil output to earn as much as possible or freezing output and waiting for sunnier days.
Both Azerbaijan and Kazakhstan, the main producers in our region, have played with the idea of “freezing” oil production, although this is more a reflection of a drop in production at aging oil fields rather than a conscious choice. An agreement reached between members of OPEC and other producers seems to have solved the headache in the medium-term. The parties pledged to cut output, forcing prices up.
This measure, however, lasted just a few days.
After the US Federal Reserve raised interest rates for the first time in one year on Wednesday, the US dollar soared against all commodities, cancelling out the progress made after the OPEC-sponsored meeting.
ENDS
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(News report from Issue No. 309, published on Dec. 16 2016)