Qatar's credit availability set to improve on higher liquidity, rising business confidence: Dun & Bradstreet
May 22 2022 11:31 PM
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Dun & Bradstreet expects the availability of credit in Qatar to improve as higher oil prices boost liquidity in the country’s banking system and business confidence recovers on a successful vaccine rollout.
In its latest ‘Country risk update,’ the researcher said the country’s outlook is “stable”.
The credit environment score is at ‘DB3b’ on an “improving” trend as the fiscal balance is forecast to be in surplus in 2022 on account of higher oil and gas prices.
Qatar's government debt/GDP ratio (81% in 2021) is high compared to its peers and the government has high contingent liabilities.
However, Dun & Bradstreet noted the government's strong asset position, including the $450bn sovereign wealth fund, provides a comfortable buffer against external financing pressures.
In terms of ‘supply environment’, Dun & Bradstreet said the supply environment score outlook has been set to 'stable' with a ‘DB3d’ rating.
In March, Qatar inaugurated the Barzan gas plant, which will help meet domestic power generation and water desalination requirements.
Moreover, the recently approved Flight Information Region has given the country its airspace for the first time, and secures an important trading channel for the import-dependent nation.
On global crude prices, Dun & Bradstreet said Brent crude spot price to average $107 per barrel in the second quarter (Q2) of the year, it said.
Global oil demand is at 3.4mn barrels per day in 2022, Dun & Bradstreet said.
Oil prices ended mixed on demand and supply concerns and rising crude inventories. Covid-related lockdowns in China continued to exert downward pressure on the oil market. Positively, the People’s Bank of China pledged to provide monetary policy support, prioritise stability and take steps to boost confidence after the lockdown.
The Energy Information Administration (EIA) estimated that the Brent crude spot price will average at $107/barrel in Q2, 2022, and $103/barrel in H2, 2022 due to potential future sanctions on Russia and uncertainty surrounding oil supply disruption. Meanwhile, Opec in its Monthly Oil Market Report (May 2022), decided to downgrade its forecast for global oil demand to 3.4mn barrels per day for 2022 from 3.7mn barrels per day in the previous month’s assessment due to geopolitical concerns and the Covid-19 pandemic restrictions.
The EIA reported that the US crude inventories increased by 8.5mn barrels from the previous week.
Gold: Gold price continued to settle lower due to a stronger dollar on expectations of an another hike in the interest rate by the US Fed, Dun & Bradstreet said.
 
 



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