Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • May 2015
05

Oil: More than meets the eye

Open-access content Thursday 30th April 2015 — updated 4.50pm, Tuesday 14th April 2020
2
Oil bubbles - iStock

I enjoyed reading Dr Sentance's perspective on low inflation and interest rates (The Actuary, March). While the fall in oil price can provide a boost to importing countries, I wonder if there is more to this than meets the eye.


It is clear from the reported surplus at current production levels that there is an imbalance in the demand and supply equation for oil. So while the price might not 'correct' all the way to the $100 a barrel level of the recent past, at some point it would seem that it will head upwards. So how temporary is the $50 to $60 price and what is its 'stable level'?

In addition, since oil is priced in US dollars, and with the dollar's significant appreciation compared to some currencies - the euro being an example of a globally dominant one - I wonder whether the net impact of the lower oil price, while still meaningful, diminishes the windfall to the extent of the local currency depreciation? 

Tied to this is the question of whether the US will raise its interest rates, as some observers are calling for, and how that would carry into the currency markets.

During the financial crisis a number of currency zones prematurely raised their interest rates, only to have to back away from it. Interest rates in some jurisdictions are in the previously unheard of negative territory. 

It appears that the interest rate decision has become more challenging, especially in the absence of widespread steady net wage gains in the labour market.

Shiraz Jetha 18 March

This article appeared in our May 2015 issue of The Actuary.
Click here to view this issue
Filed in:
05

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, 71-75 Shelton Street, London WC2H 9JQ. Tel: 020 7880 6200