CEMAC zone: recession could reach 6% according to BEAC

All the indicators are certainly not red. But most of the economic indicators in the six countries of the Economic and Monetary Community of Central Africa (CEMAC) are already found the Monetary Policy Committee (CPM) of the Bank of Central African States (BEAC) at the end of the second annual session on June 24, 2020 in Yaoundé.

Analyzing the situation in Central Africa, it emerges that in the short and medium terms, the CEMAC zone is affected by the health crisis and the fall in the prices of the main export products. "

"In the first half of 2020, the revival of productive activities was slowed down in the sub-region by the disruption of supply circuits for imported products as well as by the restrictive measures adopted by the various governments to contain the effects of the pandemic. Although it is premature for the moment to fully grasp the impact of COVID-19 on national economies, it is already anticipated during this first semester a drop in production as well as a det…

Oil: Riyadh triggers price war, prices plummet

Crude prices plummet by more than 25% while OPEC has failed to reach an agreement to reduce production. A barrel of oil at 20 dollars? Still unthinkable a few weeks ago, this hypothesis is now mentioned by analysts at Goldman Sachs. On Monday, crude prices already collapsed by more than 25%, the barrel of WTI falling even below the symbolic bar of 30 dollars.

Riyadh triggers price war, prices plummet

This fall is fueled by the price war unleashed by Saudi Arabia, which unilaterally decided to lower its delivery prices. Riyadh reacts to the failure of the Organization of the Petroleum Exporting Countries (OPEC) and Russia, unable to find it last week.

Faced with economic uncertainty caused by the epidemic of the new coronavirus, the ministers of the oil cartel had tried to conclude an agreement with the other oil-producing countries to reduce production and maintain crude oil prices. But Russia, the world's second largest oil producer and not a member of OPEC, opposed further cuts of 1.5 million barrels a day.

In response, Saudi Arabia has embarked on a massive clearance sale by making the biggest reduction in its oil prices in 20 years, Bloomberg News reported on Sunday. Jeffrey Halley, an analyst at Oanda, said "Saudi Arabia seems to be planning to punish Russia".

Thus, the price for oil destined for Asia decreased by 4-6 dollars per barrel while that for the United States was reduced by 7 dollars per barrel. Aramco sold its barrel of Arabian Light at an unprecedented price: $ 10.25 below a barrel of Brent from the North Sea, according to Bloomberg.

"A 30% drop in crude prices is unprecedented and sends a huge shock wave through the financial markets," said Margaret Yang, analyst for CMC Markets. Equity markets immediately plunged into Asia and the Gulf. They should also fall in Europe and the United States.
The oil market will likely stay on the carpet for the next few months, with Saudi Arabia's rebates combined with the halt to global economic growth by the coronavirus, which has driven down demand for black gold, added this analyst.

"Something like this could have more repercussions in the world than a trade war between China and the United States because oil is linked to many sectors in the world economy," said Rohitesh Dhawan, director of energy, climate and natural resources at the consulting company Eurasia Group in London.

Margaret Yang of CMC Markets expressed the hope that the collapse could bring Russia back to the negotiating table with OPEC to reach an agreement.