Trading in Murban crude futures contracts began on Monday as the UAE's capital sets its sights on becoming a "world-class" commodities hub.
Murban, a light, sweet type of crude that is popular in Asian markets, joined Brent and West Texas Intermediate as a global benchmark after the start of trading at a commodities exchange in Abu Dhabi.
"We will establish Abu Dhabi as a world class commodities trading hub," said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.
"That is simply the case because starting today Murban futures will be freely traded from Singapore, and from Abu Dhabi to New York. In fact, whenever there is a trading screen, Murban will be on that screen."
Murban is Abu Dhabi's flagship crude grade, which flows at about 1.7 million barrels per day and accounts for half of the UAE's overall output.
One million bpd of Murban crude is available for export. The UAE, which accounts for 4.2 per cent of global crude output, has the capacity to produce 2 million bpd of Murban.
Adnoc, which produces much of the oil on behalf of the UAE, plans to raise its overall capacity to 5 million bpd by 2030. About half of that capacity will be for the production of Murban grade crude.
Murban, which began production from just one oil field in 1958, came from" humble beginnings", Dr Al Jaber said.
"Now it flows from 2,000 wells and 12 fields."
We will establish Abu Dhabi as a world class commodities trading hub
About 6,324 lots of Murban crude futures were traded by 5pm UAE time.
Murban's June contract moved in line with Brent, the international benchmark, and was down by 0.19 per cent at $63.38 per barrel by 5.56pm UAE time.
The new contract represents "a great value proposition" across the entire crude trading value chain, Dr Al Jaber said.
"[It is] a win-win for everyone involved. Customers will be able to better manage market risks, while more value will be created for producers," he added.
Contracts are traded through the ICE Futures Abu Dhabi Exchange, supported by oil companies such as Thailand’s PTT, Japan’s Eneos and Inpex, BP, Total, South Korea’s GS Caltex, PetroChina, Anglo-Dutch company Shell and Vitol.
The exchange is operated by Intercontinental Exchange, also known as ICE.
ICE is also responsible for the Brent benchmark and is the parent company of the New York Stock Exchange.
Jeffrey Sprecher, chairman of ICE, and Dr Al Jaber rang the opening bell in New York in an online ceremony on Monday to mark the occasion.
"We believe on its very first day Murban will become a globally recognised benchmark," Mr Sprecher said in a video message earlier on Monday at a launch event in Abu Dhabi.
Murban fills a void in oil trading and pricing in the Middle East, which is the biggest supplier of crude to global energy markets.
The crude grade's international role is supported by Adnoc's recent removal of destination clauses in its trade.
Adnoc's other crude grades – Upper Zakum, Das and Umm Lulu – will be priced at a differential to Murban.
The contract for future delivery can be traded 22 hours a day, five days a week.
The launch of a new crude futures contract and the setting up of a new exchange will "boost liquidity and add vibrancy" to capital markets in Abu Dhabi, according to Ahmed Al Sayegh, Minister of State and executive chairman of Abu Dhabi Global Market, where the ICE Futures Abu Dhabi exchange is based.
The launch of a futures contract for Murban will also "increase arbitrage trading opportunities, regionally and globally", Mr Al Sayegh said.
The new benchmark will allow for more options to manage risk and clear trades, he added.
"For international investors, this delivers greater and more efficient access to our region ... it means doing more business closer to home," Mr Al Sayegh said.
The trading of a new benchmark based on a single, high-quality Middle East crude will offer more "transparency" to global oil markets, particularly to customers in Asia, chief executives of international energy companies said on Monday.
"There is a lack today, in the eastern hemisphere, of a strong benchmark which is essential for developing the markets. It is for good for customers [and] good for producers," said Patrick Pouyanne, chairman and chief executive at France's Total, who attended the launch of the exchange in Abu Dhabi.
He was joined online by Bernard Looney, chief executive of BP, Takayuki Ueda, president and chief executive of Japan's Inpex, as well as Russel Hardy, chief executive of trading company Vitol, the world's largest oil-trading company.
The new Abu Dhabi exchange and the Murban benchmark will help an oil-producing region such as the Middle East "manage the risks and also to meet the growing energy demand", said Mr Looney.
Murban will now be accessible to a "larger number of customers and contribute to further economic and social development in many parts of the world including in Asia", said Mr Ueda.
Adnoc's removal of destination clauses on the trading of the crude grade was an "important thing" to help establish Murban futures trading, said Mr Hardy.
A new futures contract for Murban will "reduce the uncertainty and improve the pricing for everybody as we move forward", he said.
A free float for Murban will also help Adnoc secure the best value for its crude, said Khaled Salmeen, executive director of downstream industry, marketing and trading.
The introduction of Murban crude futures is the “latest step” in the company’s ongoing transformation to becoming a “more market- and customer-centric organisation”, he said.
Adnoc, since 2016, has adopted a more partnership-centric approach to its upstream activities, inviting oil and gas companies from its customer base in Asia to become operators of its concessions.
"By making Murban a freely traded crude, similar to Brent or WTI, customers have better price transparency, flexibility to hedge and manage risks and increased access to Murban crude,” said Mr Salmeen.
Adnoc also published the first Murban Export Availability report on its onshore subsidiary's website last month. The report will allow market participants to have an insight into available volumes for 12 months
UAE currency: the story behind the money in your pockets
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
Polarised public
31% in UK say BBC is biased to left-wing views
19% in UK say BBC is biased to right-wing views
19% in UK say BBC is not biased at all
Source: YouGov
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3ESingle%20front-axle%20electric%20motor%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E218hp%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E330Nm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20automatic%3Cbr%3E%3Cstrong%3EMax%20touring%20range%3A%20%3C%2Fstrong%3E402km%20(claimed)%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh215%2C000%20(estimate)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ESeptember%3C%2Fp%3E%0A
The Bloomberg Billionaire Index in full
1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion
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.”
Results:
5pm: Conditions (PA) Dh80,000 1,400m | Winner: AF Tahoonah, Richard Mullen (jockey), Ernst Oertel (trainer)
5.30pm: Handicap (TB) Dh90,000 1,400m | Winner: Ajwad, Gerald Avranche, Rashed Bouresly
6pm: Maiden (PA) Dh80,000 1,600m | Winner: RB Lam Tara, Fabrice Veron, Eric Lemartinel
6.30pm: Handicap (PA) Dh80,000 1,600m | Winner: Duc De Faust, Szczepan Mazur, Younis Al Kalbani
7pm: Wathba Stallions Cup (PA) Dh70,000 2,200m | Winner: Shareef KB, Fabrice Veron, Ernst Oertel
7.30pm: Handicap (PA) Dh90,000 1,500m | Winner: Bainoona, Pat Cosgrave, Eric Lemartinel
Abu Dhabi GP starting grid
1 Lewis Hamilton (Mercedes)
2 Valtteri Bottas (Mercedes)
3 Sebastian Vettel (Ferrari)
4 Kimi Raikkonen (Ferrari)
5 Daniel Ricciardo (Red Bull)
6 Max Verstappen (Red Bull)
7 Romain Grosjean (Haas)
8 Charles Leclerc (Sauber)
9 Esteban Ocon (Force India)
10 Nico Hulkenberg (Renault)
11 Carlos Sainz (Renault)
12 Marcus Ericsson (Sauber)
13 Kevin Magnussen (Haas)
14 Sergio Perez (Force India)
15 Fernando Alonso (McLaren)
16 Brendon Hartley (Toro Rosso)
17 Pierre Gasly (Toro Rosso)
18 Stoffe Vandoorne (McLaren)
19 Sergey Sirotkin (Williams)
20 Lance Stroll (Williams)
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
DUBAI WORLD CUP RACE CARD
6.30pm Meydan Classic Trial US$100,000 (Turf) 1,400m
7.05pm Handicap $135,000 (T) 1,400m
7.40pm UAE 2000 Guineas Group Three $250,000 (Dirt) 1,600m
8.15pm Dubai Sprint Listed Handicap $175,000 (T) 1,200m
8.50pm Al Maktoum Challenge Round-2 Group Two $450,000 (D) 1,900m
9.25pm Handicap $135,000 (T) 1,800m
10pm Handicap $135,000 (T) 1,400m
The National selections
6.30pm Well Of Wisdom
7.05pm Summrghand
7.40pm Laser Show
8.15pm Angel Alexander
8.50pm Benbatl
9.25pm Art Du Val
10pm: Beyond Reason
UAE currency: the story behind the money in your pockets
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
hall of shame
SUNDERLAND 2002-03
No one has ended a Premier League season quite like Sunderland. They lost each of their final 15 games, taking no points after January. They ended up with 19 in total, sacking managers Peter Reid and Howard Wilkinson and losing 3-1 to Charlton when they scored three own goals in eight minutes.
SUNDERLAND 2005-06
Until Derby came along, Sunderland’s total of 15 points was the Premier League’s record low. They made it until May and their final home game before winning at the Stadium of Light while they lost a joint record 29 of their 38 league games.
HUDDERSFIELD 2018-19
Joined Derby as the only team to be relegated in March. No striker scored until January, while only two players got more assists than goalkeeper Jonas Lossl. The mid-season appointment Jan Siewert was to end his time as Huddersfield manager with a 5.3 per cent win rate.
ASTON VILLA 2015-16
Perhaps the most inexplicably bad season, considering they signed Idrissa Gueye and Adama Traore and still only got 17 points. Villa won their first league game, but none of the next 19. They ended an abominable campaign by taking one point from the last 39 available.
FULHAM 2018-19
Terrible in different ways. Fulham’s total of 26 points is not among the lowest ever but they contrived to get relegated after spending over £100 million (Dh457m) in the transfer market. Much of it went on defenders but they only kept two clean sheets in their first 33 games.
LA LIGA: Sporting Gijon, 13 points in 1997-98.
BUNDESLIGA: Tasmania Berlin, 10 points in 1965-66
The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
Mohammed bin Zayed Majlis
Specs
Engine: 3.0L twin-turbo V6
Gearbox: 10-speed automatic
Power: 405hp at 5,500rpm
Torque: 562Nm at 3,000rpm
Fuel economy, combined: 11.2L/100km
Price: From Dh292,845 (Reserve); from Dh320,145 (Presidential)
On sale: Now
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
