The average annual price of Brent crude oil in 2021 was $71 a barrel – the highest in three years. This represented a dramatic recovery after the $40 average in 2020, when an historic collapse in demand during the coronavirus pandemic resulted in an existential threat to oil-producing countries.
Crude oil prices soared in 2021 as increasing Covid-19 vaccination rates, loosening pandemic-related restrictions and a growing economy resulted in global oil demand rising faster than supply. The spot price of Brent crude oil, a global benchmark, started the year at $50 per barrel and increased to a high of $86 per barrel in late October before declining in the final weeks of the year.
However unique recent circumstances have been, last year still marked the seventh year in a row when the average price of Brent crude has changed by big double-digit percentages. Indeed, in only four years in the past 20 have we seen a single-digit change to the average annual price – the only consistent reality in oil markets over the past two decades has been big-swing volatility.
The good news is that 2022 – all things being equal with no black swans – will most likely be one of those leap years when we witness only a single-digit change in prices. The bad news for oil producers is it is more likely to be down than up.
There are many reasons to expect that oil prices will hold onto their 2021 gains because, as every month that goes by, more fundamental supply and demand floorboards are nailed in under this very successful managed market recovery.
These include inventories that are down to below five-year averages and falling; global demand is returning towards the 2019 level of 100 million barrels a day; the 2020 collapse in new supply capital expenditure to about $350 billion; and US shale oil continuing to warm up on the sidelines as reluctant bankers study balance sheets. Yes, US Federal Reserve fiscal tightening is another reason, but we all know how hard it is to hold onto New Year’s resolutions.
Ultimately, there are two main pillars to build your $65 average worst-case scenario in 2022.
Firstly, Opec+ countries have expended a massive amount of political capital and economic muscle to lift the oil price back up into the zone of balanced budgets and they are going to keep both feet on the proverbial gas to ensure that their hard-fought gains stick around for a while to allow their economies and societies to stabilise.
Secondly, there are only five states of the 23-member group that have been awarded increased production quotas from May 2022. Indeed, by the time we get to the middle of the year, the number of countries that can actually pump more oil at short notice will be reduced to probably just two or three Gulf states.
Every month that the oil-producing group increases its official production ceiling by 400,000 barrels per day, is another month closer to the world running short on available idle capacity.
Bon Voyage 2022!
Sean Evers is managing partner at Gulf Intelligence
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
ESSENTIALS
The flights
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.
The specs
Engine: Turbocharged four-cylinder 2.7-litre
Power: 325hp
Torque: 500Nm
Transmission: 10-speed automatic
Price: From Dh189,700
On sale: now
City's slump
L - Juventus, 2-0
D - C Palace, 2-2
W - N Forest, 3-0
L - Liverpool, 2-0
D - Feyenoord, 3-3
L - Tottenham, 4-0
L - Brighton, 2-1
L - Sporting, 4-1
L - Bournemouth, 2-1
L - Tottenham, 2-1
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
The biog
Born: near Sialkot, Pakistan, 1981
Profession: Driver
Family: wife, son (11), daughter (8)
Favourite drink: chai karak
Favourite place in Dubai: The neighbourhood of Khawaneej. “When I see the old houses over there, near the date palms, I can be reminded of my old times. If I don’t go down I cannot recall my old times.”
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
Biog:
Age: 34
Favourite superhero: Batman
Favourite sport: anything extreme
Favourite person: Muhammad Ali
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
RESULTS
6.30pm: Maiden Dh 165,000 1,600m
Winner: Superior, Connor Beasley (jockey), Ahmad bin Harmash (trainer)
7.05pm: Handicap Dh 185,000 2,000m
Winner: Tried And True, Pat Dobbs, Doug Watson
7.40pm: Maiden Dh 165,000 1,600m
Winner: Roy Orbison, Fernando Jara, Ali Rashid Al Raihe
8.15pm
Handicap Dh 190,000 1,400m
Winner: Taamol, Dane O’Neill, Ali Rashid Al Raihe
8.50pm
Handicap Dh 175,000 1,600m
Winner: Welford, Richard Mullen, Satish Seemar
9.25pm: Handicap Dh 175,000 1,200m
Winner: Lavaspin, Richard Mullen, Satish Seemar
10pm: Handicap Dh 165,000 1,600m
Winner: Untold Secret, Xavier Ziani, Sandeep Jadhav
JAPAN SQUAD
Goalkeepers: Masaaki Higashiguchi, Shuichi Gonda, Daniel Schmidt
Defenders: Yuto Nagatomo, Tomoaki Makino, Maya Yoshida, Sho Sasaki, Hiroki Sakai, Sei Muroya, Genta Miura, Takehiro Tomiyasu
Midfielders: Toshihiro Aoyama, Genki Haraguchi, Gaku Shibasaki, Wataru Endo, Junya Ito, Shoya Nakajima, Takumi Minamino, Hidemasa Morita, Ritsu Doan
Forwards: Yuya Osako, Takuma Asano, Koya Kitagawa
Seemar’s top six for the Dubai World Cup Carnival:
1. Reynaldothewizard
2. North America
3. Raven’s Corner
4. Hawkesbury
5. New Maharajah
6. Secret Ambition
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