The primary rich-oil nation are now facing weakened economic outlooks in the succeeding year as tumbling oil prices gave rise to a threat to dropping the same much further. Investors this week are beginning to shed their stocks and currencies more closely to tie commodity prices albeit the growing evidence that the cheap crude is bound to stay for the next year.

Brent crude, an international gauge and benchmark was down 2 % at $59.83 per barrel last week which was its lowest level since 2009. West Texas Intermediate, the U.S. price gauge was being traded at around $55.93 per barrel which was down from a peak of over $105 six months ago.

The most striking example of oil-fuelled currency decline is Russia. The ruble has maintained a steady decrease against the U.S. dollar in recent months due to the sanctions its received on the country’s oil dependent economy. But the currency was able to hit a record low last week which dropped to 78.8 per dollar before finally settling below 64 after the central bank increased its interest rates overnight in an effort to boost the ruble.

Selling pressure on the rubble substantially increased as investors anticipated the rake hike will not be sufficient to offset the impacts of falling oil prices.

Norway’s krone likewise suffered the same circumstance of hitting one fourth below $60-a-barrel Brent crude. Oil and gas production accounted for approximately one fourth of Norway’s gross domestic product which makes its currency prone to declines in terms of oil prices. The krone was able to slide to a 12-year low dropping to 7.87 against the dollar early last week before gaining once again to the 7.44 level.

The currencies of Thailand, Colombia, Brazil, Poland, Nigeria and Turkey have slipped albeit the apprehensions of falling oil prices along with the fearful Russian economy.
Analysts were very concerned about the knock-on effects for South Asian moguls. The sources of funds that invest India are predominantly sovereign wealth funds, pension funds and insurance funds.
The Indian rupee has dropped 1.5 % this month against the dollar, in part due to the collapsing crude prices. The currency hit 63.70 last week which was its weakest level since November of last year.

Crude oil prices are not likely to quickly recover by early next year. Oil-producing countries such as the U.S. are not hinting any signs of curbing output in spite of the global supply and weaker than expected growth in China and Europe.

When oil prices fall, the U.S. and Canadian producers are bound to reduce their drilling activities since it would be much harder to make profit. This year, drillers are still doing what they do best which is to drill. The rig count is the first stage of supply response and that has not happened yet.

North American producers are likely to hang on since they need to finish out their 2014 drill programmes . According to the members of the Organisation of Petroleum Exporting Countries (OPEC) led by Saudi Arabia, they are refusing to shunt for fear of losing market share.

Accordingly, analysts predict that the U.S. and Canadian firms will be forced to dramatically reduced their capital expenditures in the coming new year, despite the current level productions by OPEC along with global oil prices will likely to remain low.

Last week, the United Arab Emirates’ energy minister revealed that OPEC will stand by an earlier decision on not to cutback crude output even if prices drop to as low as $40 per barrel.