KUALA LUMPUR, Jan 23 — Citi Bank has described as realistic the government’s decision to revise the earlier crude oil price assumption of US$100 (RM360) per barrel used in Budget 2015 to US$55 per barrel following the current global economic landscape.

Its Chief Investment Strategist, Investment Strategy Group Wealth Management for Asia Pacific Haren Shah said the oil prices might go lower in the short term, taking into consideration the current market forces.

“But when you take a budget example, when you set a price (of crude oil), you are talking about the average price over a period of times. We do expect the price to stabilise within a range of US$45 to US$60 per barrel,” he told a media briefing on the 2015 Asian market outlook here, today.

Prime Minister Datuk Seri Najib Razak laid out pre-emptive measures to offset the volatile economic conditions on Tuesday to deal with the plunge in crude oil prices and the weakening of the ringgit.

Basically, Heran said Malaysia along with other Asian countries would eventually benefit from the low oil prices from the consumption perspective.

“With low petrol prices, consumers feel better as they have more money to spend.

“The impact on other countries, however, will only be known as time passes.

Some countries will benefit more because they are able to pass on the costs from the oil price reduction to the consumers,” he added.

In some countries, Haren said the lower oil price impact might take a longer period to realise due to structural reason.

“If you look at the US, for example, the oil prices were adjusted immediately at the (petrol) stations,” he said. 

However, he said in most of Asian countries, it took much longer before the petrol prices came down, while in emerging markets, maybe the impact could be seen for the rest of this year. 

“The big impact (on the lower oil prices) is expected to be seen by next year as it need times to be fitted into the economy,” he added. — Bernama