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11-Year-Low: Awful Oil Milestone for Gulf Sovereign Funds

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Backed by public pension fund capital, private equity money, hedge funds and Wall Street, recent fossil fuel production in the United States has transformed the global energy model, returning some economic power to the West. The story has changed with the force of the American shale revolution. After coming back from a signature climate deal in Paris, United States President Barack Obama reluctantly inked a bill to lift the U.S. export ban on selling oil. The U.S. Senate passed the bill with a vote of 65-33. Democrats were able to get in another 5 years of solar and wind tax credits in the bill. The export ban had its origins when the United States experienced oil shortages, especially during the Carter administration. The U.S. Energy Information Administration (EIA) mentions that the country’s current oil inventories stand at 490.7 million barrels. U.S. oil reserves are at an 85-year high, with refineries running at 92% capacity – the week ending December 11, 2015. To compound the aggressive oversupply issue, OPEC in December reiterated they have no plans to decrease production. In addition, Russian oil production reached a post-Soviet record. Will oil reach US$ 20 a barrel? The price of Brent crude oil fell to an 11-year low, getting stumpy at US$ 36.05 per barrel on December 21st. U.S. West Texas Intermediate futures rolled down to 33 cent to US$ $34.40 a barrel – lowest level since 2009.

Many of these Middle Eastern sovereign funds have been reluctant to tap into sovereign wealth reserves, opting to cut fiscal spending or raise government debt.

The Gulf Reaction

As of December 2015, 56.28% of sovereign wealth assets are derived from oil & gas related funds. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Follow the Money – Episode 45

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This longer-than-normal episode covers a wide range of issues including such as sovereign wealth funds, bitcoin, cryptocurrencies, Indian real estate, ESG, investment exclusions, central banking and more.

EPISODE 45

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The views in this media are expressed by Michael Maduell and other participants and are not reflective of the Sovereign Wealth Fund Institute (SWFI).

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CalPERS Board Elects Priya Mathur as Board President

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The board of the California Public Employees’ Retirement System (CalPERS) elected Priya Mathur as board president. The current president Rob Feckner was named vice president of the board. Feckner previously served as board president and vice president.

Priya Mathur is serving her fourth term on the CalPERS Board of Administration. Mathur is a principal financial analyst for Bay Area Rapid Transit District (BART). Mathur represents public employees on the CalPERS Board, which she joined in 2002. She currently serves on four committees: Governance, Investment, Pension & Health Benefits, and Risk & Audit. She chairs the Pension & Health Benefits Committee and is vice chair of the Governance Committee.

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Oman SGRF Contemplates $1 Billion Infrastructure Fund

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Oman’s State General Reserve Fund (SGRF) is in discussions on forming a US$ 1 billion infrastructure fund. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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