Oil prices extended their gains on Wednesday, hovering close to a 10-month high amid expectations of a larger supply deficit in the market than was previously estimated.
Brent, the benchmark for two thirds of the world’s oil, was trading 0.42 per cent higher at $92.45 a barrel at 4.22pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 0.42 per cent at $89.21 a barrel.
On Tuesday, Brent settled 1.57 per cent higher at $92.06 a barrel, the highest level since November 2022. WTI closed up 1.78 per cent at $88.84 a barrel.
In its monthly oil market report on Tuesday, Opec said it expected a supply shortfall of 3.3 million barrels per day over the next three months as Saudi Arabia extends its output cuts.
The group also stuck to its oil demand outlook for this year and next and said China’s recent stimulus measures would help to revive growth in the world's second-largest economy.
“The Opec monthly report showed the oil market is going to be a lot tighter than initially thought,” said Edward Moya, senior market analyst at Oanda.
“Heading into the Opec+ decision at the end of last month, expectations were for the global market to have a supply deficit of just over 1 million bpd. After the [announcement of the supply cuts] it was generally viewed that the supply deficit would be around twice that amount.”
Meanwhile, the US Energy Information Administration said global oil inventories were projected to fall by nearly 500,000 bpd in the second half of this year, resulting in higher prices for the rest of 2023.
In its Short-Term Energy Outlook released on Tuesday, the EIA forecast Brent crude prices of $93 a barrel in the fourth quarter of this year, up from a previous estimate of less than $88 a barrel.
The International Energy Agency will release its monthly oil market report later today.
Oil prices have been gaining since Opec+ members Saudi Arabia and Russia said they would extend supply cuts of a combined 1.3 million bpd to the end of the year.
As part of their voluntary cuts, the kingdom is extending its 1 million bpd output reduction until December, while Russia is rolling over its export cut of 300,000 bpd until the end of the year.
On Tuesday, Opec said its production is projected to grow by about 50,000 bpd to 5.44 million bpd this year, before rising further to 5.51 million bpd in 2024.
Opec members’ crude oil output rose by 113,000 bpd in August, compared with July, to 27.45 million bpd, the group said, citing secondary sources.
Meanwhile, Libya, Opec’s seventh-largest crude oil producer, has closed four major oil ports after Storm Daniel caused devastating floods in the country.
The oil ports – Ras Lanuf, Zueitina, Brega and Es Sidra – were closed from Saturday evening for three days, Reuters reported on Monday, citing two oil engineers.
The closure of the ports will lead to some export disruptions, but those exports are “likely” to recover once the ports re-open, Giovanni Staunovo, strategist at UBS, told The National on Tuesday.
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Director: Kaouther Ben Hania
Rating: 4/5
RESULTS
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Tell-tale signs of burnout
- loss of confidence and appetite
- irritability and emotional outbursts
- sadness
- persistent physical ailments such as headaches, frequent infections and fatigue
- substance abuse, such as smoking or drinking more
- impaired judgement
- excessive and continuous worrying
- irregular sleep patterns
Tips to help overcome burnout
Acknowledge how you are feeling by listening to your warning signs. Set boundaries and learn to say ‘no’
Do activities that you want to do as well as things you have to do
Undertake at least 30 minutes of exercise per day. It releases an abundance of feel-good hormones
Find your form of relaxation and make time for it each day e.g. soothing music, reading or mindful meditation
Sleep and wake at the same time every day, even if your sleep pattern was disrupted. Without enough sleep condition such as stress, anxiety and depression can thrive.
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
THE SPECS
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Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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THE NEW BATCH'S FOCUS SECTORS
AiFlux – renewables, oil and gas
DevisionX – manufacturing
Event Gates – security and manufacturing
Farmdar – agriculture
Farmin – smart cities
Greener Crop – agriculture
Ipera.ai – space digitisation
Lune Technologies – fibre-optics
Monak – delivery
NutzenTech – environment
Nybl – machine learning
Occicor – shelf management
Olymon Solutions – smart automation
Pivony – user-generated data
PowerDev – energy big data
Sav – finance
Searover – renewables
Swftbox – delivery
Trade Capital Partners – FinTech
Valorafutbol – sports and entertainment
Workfam – employee engagement
