DOHA: Qatar Petroleum (QP) is implementing a redevelopment programme to steady production at its oil fields. This heavy investment in maturing oil fields should limit further declines in oil production.
The country’s crude oil production fell in January to 674000 barrels per day, although redevelopment plans should stabilise output going forward, QNB Group’s Monthly Monitor noted yesterday.
The report said Qatari oil prices fell in January owing to weaker global demand. The stagnant Eurozone economy, the recession in Japan and the slowdown in Emerging Markets, especially China, are contributing to the weakness in hydrocarbon demand and an oil supply glut, which is putting downward pressure on oil prices.
According to the report, Qatar’s population grew by 10.3 percent year-on-year in February 2015 to reach 2.33m. This equates to an increase in the population of 218,000 over the last twelve months. Population growth has been driven up by the large ramp up in major investment spending that is creating an estimated 120, 000 new jobs each year.
Qatar’s population is projected to grow by 7.0 percent in 2015, reflecting continued large inflows of expatriate workers. In turn this larger population will feed into higher economic growth by boosting aggregate demand and investment in housing and services.
Qatar’s foreign merchandise trade balance registered a surplus of QR18.5bn in Janaury 2015, down from QR35.8bn in January 2014. This was mainly a result of lower international crude oil prices . Total exports fell by 36.7 percent year-on-year. At the same time, imports rose robustly (10.2 percent year-on-year), reflecting the growing population and large investment spending.
The country’s international reserves fell slightly to $41.1bn at end-January 2015. This compares to $41.9bn at end-January 2014. Despite the slight fall, the import cover remains more than adequate at 7.5months of prospective imports at end-January 2015, well above the IMF-recommended level of three months for pegged exchange rates.
More broadly, Qatar’s international reserves have been steadily rising over the years on large current account surpluses. Going forward, QNB Group expects international reserves to remain broadly stable at eight months of prospective import cover over the medium term, notwithstanding the lower trade surplus. The Peninsula
