{"id":155571,"date":"2019-09-17T07:30:42","date_gmt":"2019-09-17T11:30:42","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=155571"},"modified":"2019-09-17T07:19:16","modified_gmt":"2019-09-17T11:19:16","slug":"who-are-the-biggest-winners-and-losers-from-surging-oil-prices","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/09\/who-are-the-biggest-winners-and-losers-from-surging-oil-prices\/","title":{"rendered":"Who are the biggest winners and losers from surging oil prices?"},"content":{"rendered":"<div id=\"inves-3768986198\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">September 17, 2019<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By Lukman Otunuga, Research Analyst, <\/strong><a href=\"http:\/\/countingpips.com\/contributors\/contributor-profile-forextime\/\"><strong>ForexTime<\/strong><\/a><\/p>\n<div class=\"article-body\">\n<div class=\"field-body\">\n<div class=\"field-items\">\n<div class=\"field-item even\">\n<ul>\n<li><em>Oil prices explode higher on Saudi supply disruption <\/em><\/li>\n<li><em>Biggest winners and losers from negative supply shocks <\/em><\/li>\n<li><em>Dollar enjoys risk-off flows <\/em><\/li>\n<\/ul>\n<p>The explosive appreciation in oil prices could not have come at a more testing period for the global economy currently embroiled in trade wars, geopolitical risks and fears over decelerating economic growth.<\/p>\n<p>Oil bulls are clearly back in the picture after drone attacks on Saudi Arabia\u2019s oil fields over the weekend wiped out 5.7 million barrels of the kingdom\u2019s production, equivalent to more than 5% of the world\u2019s daily supply. Although Saudi Arabia\u2019s spare capacity and US Strategic Petroleum Reserves could plug some of the lost output, where oil trades in the near term will be influenced by how long it takes for Saudi production to fully recover. It is this concern over negative supply shocks amid geopolitical tensions which should keep oil prices buoyed in the short term. However, where the commodity trades in the longer term will depend on many factors including global growth, geopolitics and US-China trade developments.<\/p>\n<p>The dynamics influencing oil prices are certainly swinging back to supply-side factors and this is being reflected in oil\u2019s bullish price action following the monumental disruption.<\/p>\n<p><strong>Who are the biggest winner and losers from higher oil prices?<\/strong><\/p>\n<p>While higher oil prices are a welcome development for oil-producing countries like the United States, Russia and Canada among many others, it has the potential to increase the running costs of businesses ultimately igniting inflationary pressures. Rising inflation will be a drag on consumer spending, which may end up pressuring economic growth further.<\/p>\n<p>Emerging market energy importers like Turkey, India and South Africa will feel the heat from appreciating oil prices as it may not only stoke inflationary pressures but complicate the central banks\u2019 efforts to ease monetary policy to boost growth. Rising oil also presents a risk to China, the world\u2019s second-largest economy, due to its strong appetite for imported energy.<\/p>\n<p>The biggest winner will be the United States due to its status as the world\u2019s largest oil producer, although everyone will lose if elevated oil prices tip the global economy into recession.<\/p>\n<p><strong>Dollar firms on safe-haven flows\u00a0<\/strong><\/p>\n<p>Heightened geopolitical tensions in the Middle East are encouraging investors to maintain a safe distance from riskier assets.<\/p>\n<p>In times of uncertainty and unease, the Dollar is still seen as a destination of safety and this continues to be reflected in the Dollar Index (DXY). Should risk aversion remain a major theme, the DXY will push higher ahead of the Federal Reserve meeting this week. While the path of least resistance for the DXY points north, where prices close this week will be heavily influenced by the FOMC meeting and Chair Powell\u2019s press conference.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><em><strong>Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n<hr \/>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-54242 alignleft\" src=\"https:\/\/www.countingpips.com\/articles-analysis\/wp-content\/uploads\/2014\/07\/Forex-Time-Logo.png\" alt=\"Forex-Time-Logo\" width=\"262\" height=\"90\" \/><strong>Article by <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.countingpips.com\/contributors\/contributor-profile-forextime\/\">ForexTime<\/a><\/span><\/strong><\/p>\n<p><strong>ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 <a href=\"http:\/\/www.forextime.com\" target=\"_blank\" rel=\"noopener noreferrer\">www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Lukman Otunuga, Research Analyst, ForexTime Oil prices explode higher on Saudi supply disruption Biggest winners and losers from negative supply shocks Dollar enjoys risk-off flows The explosive appreciation in oil prices could not have come at a more testing period for the global economy currently embroiled in trade wars, geopolitical risks and fears over [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-155571","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/155571","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=155571"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/155571\/revisions"}],"predecessor-version":[{"id":155581,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/155571\/revisions\/155581"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=155571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=155571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=155571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}