The price of Brent will likely average $64 a barrel this year as compliance by Opec and its allies on production cuts is expected to lower oil inventories to below their five-year averages, according to Bank of America Merrill Lynch.
"We expect Brent crude oil prices to average $9 or 17 per cent above last year in 2018, but we then expect prices to pullback in 2019 to $60 a barrel as US supply responds and Opec starts to unwind the supply deal," the bank said in a paper on global energy.
The forecast by BofAML is conservative in comparison with recent estimates suggested by Goldman Sachs, which forecast Brent will rise to $75 a barrel in three months and average $82.5 and $75 in the next six and twelve months.
Much of the uptick in oil prices comes from sustained production cuts of around 1.8 million barrels per day that Opec and allies have administered since the beginning of last year and are expected to continue until the end of 2018.
BofAML expects Opec and non-Opec countries to gradually unwind their deal "with only modest increases in supply" as oil markets remain concerned about a resurgent US shale that is likely to offset any price gains this year.
Opec and producers outside the group led by Russia are expected to draft a charter to formalise their alliance into a "supergroup" that would effectively have around 45 per cent of the world's total oil supply under control, UAE Energy Minister and current Opec President, Suhail Al Mazrouei told The National this month.
BofAML dismissed any concerns over a "market share war" in the future among members of this pact, as these sovereign producers are likely to band together against the looming US shale threat.
Sustained prices of around $68 a barrel would require output curbs of around a million bpd to be sustained over the next five years by the alliance.
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Read more:
Fortune smiles on oil majors as crude prices recover
The case for Russian membership of Opec
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While natural declines from members such as Venezuela have greatly helped Opec maintain its compliance momentum, other members such as Iraq - the second largest producer in the group - are expected to boost production this year.
The Iraqi oil ministry, as part of its efforts to rehabilitate the country post-ISIL, is aiming for five million bpd production this year, provided the country is able to attract international oil companies and procure finance.
Kuwait has revised its production targets and is now looking to invest $500 billion to raise its production capacity to 4.75 million bpd by 2040, with $114bn spent over the next five years alone.
Opec production is expected to rise by 2.3 million bpd over the next five years, noted the bank, with expansion in Saudi Arabia and the UAE adding approximately 440,000 bpd to new capacity over the same time period.
Over the medium term the bank expects oil prices to average $50 to $70 a barrel through 2023. Concurrently, global oil consumption is expected to expand by 1.6 million bpd over the period, but demand is expected to taper after hitting a peak in 2020.
The price of Brent traded at $65 a barrel at 10.30am UAE time.
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Three ways to get a gratitude glow
By committing to at least one of these daily, you can bring more gratitude into your life, says Ong.
- During your morning skincare routine, name five things you are thankful for about yourself.
- As you finish your skincare routine, look yourself in the eye and speak an affirmation, such as: “I am grateful for every part of me, including my ability to take care of my skin.”
- In the evening, take some deep breaths, notice how your skin feels, and listen for what your skin is grateful for.
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
Killing of Qassem Suleimani
COMPANY%20PROFILE
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Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
A timeline of the Historical Dictionary of the Arabic Language
- 2018: Formal work begins
- November 2021: First 17 volumes launched
- November 2022: Additional 19 volumes released
- October 2023: Another 31 volumes released
- November 2024: All 127 volumes completed
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Company%20Profile
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Abu Dhabi Sustainability Week
Company%20Profile
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TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
UAE currency: the story behind the money in your pockets
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Profile of RentSher
Started: October 2015 in India, November 2016 in UAE
Founders: Harsh Dhand; Vaibhav and Purvashi Doshi
Based: Bangalore, India and Dubai, UAE
Sector: Online rental marketplace
Size: 40 employees
Investment: $2 million
