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Oil-Price Surge Fuels Global Investing Binge
Producers' deep pockets evident in Abu Dhabi's Citigroup outlay
By Jim O'Neill
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Posted Nov 28, 07 2:18 PM CST
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(Newser)
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Petrodollars have fueled an investing binge in companies ranging from chipmaker AMD to private-equity giant Carlyle Group to Citigroup. And, with nearly $5 billion in oil revenue gushing weekly into Persian Gulf nations, the spree won’t likely slow, the New York Times reports. “The oil-producing countries simply cannot absorb the amount of wealth they are generating,” one observer said.
Profits for oil-producing OPEC nations surged from $243 billion in 2000 to $688 billion in 2007, not including the past two months of record sales. Petrodollars flooded into the US, but increasingly the weak dollar and political concerns are pushing more overseas. It’s a shift “of historic dimensions,” experts say, and it’s helped the world economy by keeping interest rates low.