The end of a long and difficult pandemic year for oil marked a changeover of the government in the United States, which is now led by President Joe Biden.
What lies ahead could mean a major change for the oil markets.
Ex-president Donald Trump reshaped the country's shale oil policy with an eye to dominate global energy markets and in just four years, the country’s exports became a force to be reckoned with.
Between 2016 and 2020, US shale grew aggressively and established a balance of market power with Opec. The group of oil-producing countries constrained production several times amid negative sentiment, supply chain disruptions during the US-China trade dispute and their subsequent impact on oil demand.
Both Opec and US shale tumbled into the pandemic precipice last year.
Low point for Opec export revenues in 2020
In 2020, Opec’s oil export revenues fell to their lowest point in 18 years, according to an estimate by the US Energy Information Administration. The coronavirus pandemic and low demand for oil pushed export revenues down to $323 billion for the year, compared with $595bn in 2019, the EIA said.
Opec’s export revenues for 2021 may rise to $397bn provided production cuts ease and global oil demand recovers, according to the EIA. In its January short-term outlook, the EIA forecast Brent crude price to average $53 per barrel in 2021 and 2022, up from $42 a barrel in 2020.
The US domestic oil industry also suffered considerably during the first and second waves of Covid-19. Energy giant Halliburton lost $2.9bn in 2020 and the country’s largest energy company – Exxon Mobil – said all four quarters of 2020 were loss-making.
EIA expectations for 2021
After a devastating 2020 for the international oil markets, what does 2021 hold for the rivals?
Global liquid fuel consumption is expected to rise by 5.6 million barrels per day in 2021 and 3.3 million bpd in 2022, according to the EIA.
Opec expects crude oil to remain a vital part of the energy mix, while acknowledging that climate change and the move to cleaner energy is a top priority
In 2020, US domestic crude oil production is expected to have fallen to 11.3 million bpd from a record high of 12.2 million bpd in 2019. Another slide to 11.1 million bpd from 11.3 million bpd is expected in 2021 before production rises to 11.5 million bpd in 2022.
Opec is forecast to produce more than double US crude oil production at 27.2 million bpd in 2021, up from an estimated 25.6 million bpd in 2020, the EIA said.
This analysis puts Opec firmly ahead of the US shale industry, at least in terms of output.
US energy policy under Biden
Much of the industry’s assumptions are based on US shale continuing the path to export growth, but what if the new administration is less supportive?
Public policy already shows signs of shifting as energy companies may face increased climate risk disclosure rules and an end to new drilling permits for federal land, along with the elimination of tax subsidies for the oil and gas industry.
Nonetheless, now that oil export revenues contribute to GDP, it is unlikely that there will be a full reversal to the US’s previous position of being a net crude oil importer, especially now that the US economy has to recover as quickly as possible from the pandemic. Vaccination programmes are in motion, but will take many months to reach the goal of immunising at least 70 per cent of the population.
Green energy
In the coming years, Opec and US shale face rising competition from green energy companies. Indeed, many of the major fossil fuel companies are shifting their production to green energy sources as climate change policies affect funding and demand. Opec expects crude oil to remain a vital part of the energy mix, while acknowledging that climate change and the move to cleaner energy is a top priority.
To conclude, Opec and US shale still have the brakes on because of anaemic demand for crude oil. Barring an unforeseen development in the US policy on exports, the rivalry is set to continue as oil-producing countries strive to recover from the pandemic. The next two years could see major changes in the balance of market power.
Hussein Sayed is the chief market strategist at FXTM
Gender pay parity on track in the UAE
The UAE has a good record on gender pay parity, according to Mercer's Total Remuneration Study.
"In some of the lower levels of jobs women tend to be paid more than men, primarily because men are employed in blue collar jobs and women tend to be employed in white collar jobs which pay better," said Ted Raffoul, career products leader, Mena at Mercer. "I am yet to see a company in the UAE – particularly when you are looking at a blue chip multinationals or some of the bigger local companies – that actively discriminates when it comes to gender on pay."
Mr Raffoul said most gender issues are actually due to the cultural class, as the population is dominated by Asian and Arab cultures where men are generally expected to work and earn whereas women are meant to start a family.
"For that reason, we see a different gender gap. There are less women in senior roles because women tend to focus less on this but that’s not due to any companies having a policy penalising women for any reasons – it’s a cultural thing," he said.
As a result, Mr Raffoul said many companies in the UAE are coming up with benefit package programmes to help working mothers and the career development of women in general.
The Matrix Resurrections
Director: Lana Wachowski
Stars: Keanu Reeves, Carrie-Anne Moss, Jessica Henwick
Rating:****
TUESDAY'S ORDER OF PLAY
Centre Court
Starting at 2pm:
Elina Svitolina (UKR) [3] v Jennifer Brady (USA)
Anastasia Pavlyuchenkova (RUS) v Belinda Bencic (SUI [4]
Not before 7pm:
Sofia Kenin (USA) [5] v Elena Rybakina (KAZ)
Maria Sakkari (GRE) v Aryna Sabalenka (BLR) [7]
Court One
Starting at midday:
Karolina Muchova (CZE) v Katerina Siniakova (CZE)
Kristina Mladenovic (FRA) v Aliaksandra Sasnovich (BLR)
Veronika Kudermetova (RUS) v Dayana Yastermska (UKR)
Petra Martic (CRO) [8] v Su-Wei Hsieh (TPE)
Sorana Cirstea (ROU) v Anett Kontaveit (EST)
Race card for Super Saturday
4pm: Al Bastakiya Listed US$250,000 (Dh918,125) (Dirt) 1,900m.
4.35pm: Mahab Al Shimaal Group 3 $200,000 (D) 1,200m.
5.10pm: Nad Al Sheba Conditions $200,000 (Turf) 1,200m.
5.45pm: Burj Nahaar Group 3 $200,000 (D) 1,600m.
6.20pm: Jebel Hatta Group 1 $300,000 (T) 1,800m.
6.55pm: Al Maktoum Challenge Round 3 Group 1 $400,000 (D) 2,000m.
7.30pm: Dubai City of Gold Group 2 $250,000 (T) 2,410m.
The years Ramadan fell in May
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
UAE currency: the story behind the money in your pockets
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Quick facts on cancer
- Cancer is the second-leading cause of death worldwide, after cardiovascular diseases
- About one in five men and one in six women will develop cancer in their lifetime
- By 2040, global cancer cases are on track to reach 30 million
- 70 per cent of cancer deaths occur in low and middle-income countries
- This rate is expected to increase to 75 per cent by 2030
- At least one third of common cancers are preventable
- Genetic mutations play a role in 5 per cent to 10 per cent of cancers
- Up to 3.7 million lives could be saved annually by implementing the right health
strategies
- The total annual economic cost of cancer is $1.16 trillion
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
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Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
