A no-deal among Opec+ producers to add more supply is expected to tighten the market significantly as global energy demand continues to increase, the International Energy Agency said in its latest monthly market report.
"The Opec+ stalemate means that until a compromise can be reached, production quotas will remain at July’s levels," the agency said in its latest report.
"In that case, oil markets will tighten significantly as demand rebounds from last year’s Covid-induced plunge."
Opec+, which is led by Saudi Arabia and Russia, introduced production cuts of about 10 million barrels per day last year after Covid-19 hit global crude demand.
With air and ground transport coming to a halt as countries closed their borders, oil prices and demand fell to historic lows.
However, demand is picking up in Europe and the US as movement restrictions are eased and economies reopen.
Opec+ has been relaxing its output curbs in line with an expected demand increase. The group had earlier planned to bring 2 million bpd back to the markets at its July meeting.
However, the meeting has been postponed indefinitely to review the UAE's concerns over an outdated baseline being used to calculate quotas, as well as its objections to extending the current pact beyond April 2022 using the current yardstick.
Global oil demand also increased by about 3.2 million bpd to 96.8 million bpd in June, after two consecutive months of decline, the Paris-based agency said.
The IEA expects oil demand to rise by 5.4 million bpd in 2021 and by 3 million bpd in 2022. However, it issued a warning on significant downsides caused by the rising number of Covid-19 cases, attributed primarily to the more virulent Delta-plus strain.
"Robust global economic growth, rising vaccination rates and easing social distancing measures will combine to underpin stronger global oil demand for the remainder of the year," the agency said.
Crude oil benchmarks, which retreated on Monday due to continued uncertainty over Opec+ action, gained as the market continued to tighten.
Brent, the main benchmark for oil, rose by 0.51 per cent to $75.54 a barrel at 2.44pm UAE time while West Texas Intermediate, which tracks US grades, was up 0.39 per cent at $74.39 a barrel.
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
UAE currency: the story behind the money in your pockets
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Super lightweight:
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Super lightweight:
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Middleweight:
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Lightweight:
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How to increase your savings
- Have a plan for your savings.
- Decide on your emergency fund target and once that's achieved, assign your savings to another financial goal such as saving for a house or investing for retirement.
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- Carol Glynn, founder of Conscious Finance Coaching
THE BIO
Ms Davison came to Dubai from Kerala after her marriage in 1996 when she was 21-years-old
Since 2001, Ms Davison has worked at many affordable schools such as Our Own English High School in Sharjah, and The Apple International School and Amled School in Dubai
Favourite Book: The Alchemist
Favourite quote: Failing to prepare is preparing to fail
Favourite place to Travel to: Vienna
Favourite cuisine: Italian food
Favourite Movie : Scent of a Woman
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
