Oil prices continued to fall this week, despite OPEC+’s decision to roll over production cuts. And given the way OPEC+ is now losing market share, we think the case for Saudi Arabia, the group’s de-facto leader, to raise oil output more aggressively is building. Elsewhere, Egypt’s announcement that it will continue to import LNG amid a domestic shortfall of natural gas is a short-term solution. It will need to shift its domestic sources of energy, most likely towards renewables. Finally, we expect the Fed to start its loosening cycle next week and, by virtue of their dollar pegs, central banks in the Gulf will follow suit. But this might not provide much support to bank lending in the Gulf if oil prices remain low.
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