After dipping briefly into thirty-dollardom yesterday, WTI is now using the $40 level as a trampoline. It is managing to muster a bounce today amid a dollar sell-off and a shift in focus towards tomorrow’s inventory report and a potential set of draws. Hark, here are five things to consider in oil markets today.
1) The Kuwaiti government is set to unwind costly fossil fuel subsidies next month by increasing local gasoline prices by as much as 83 percent. Kuwait is following in the footsteps of other Gulf Cooperation Council members (GCC) such as the United Arab Emirates in taking advantage of the oil price drop in the last two years to cut fossil fuel subsidies – it is the last of the six-country bloc to cut them. Nonetheless, it will still have the lowest rates in the GCC, and among the lowest globally. According to the IEA, fossil fuel subsidies amounted to $550 billion in 2013.
Kuwait has the world’s fifth largest sovereign wealth fund, with $592 billion in assets. In a similar vein to Saudi Arabia, its budget deficit is expected to be