Economists, investment banks and other analysts have been debating early on in the coronavirus crisis a curious abstract phenomenon: the shape of economic recovery. Various theories propound a U, V, W, L shape, or more exotic shapes, a square root or the Nike swoosh. What does the geometry of recovery mean for the energy industry?
The concepts about the shape of a recovery date back to earlier recessions. Global economic activity has gone into its steepest and fastest plunge ever. Once the virus is largely contained, or when a cure or vaccine is found, will the economy quickly rebound to pre-viral levels – a V-shaped recovery? Will it go into a prolonged slump before reviving (a U)? Will there be a double-dip W-shaped recession – either because the outbreak rebounds as lockdown measures are eased and have to be re-imposed, or because debt and dislocation bring a subsequent financial crisis? A series of Ws, when waves of pandemic recur for years to come? Maybe no recovery, in an L-shape – a steep drop followed by prolonged stagnation? Or, a square root sign – a sharp dip, followed by some recovery before flatlining?
Most forecasters for now seem to go with the V-shape, and then show a few more pessimistic scenarios. This is indicative of a natural human tendency to assume a return to perceived normality as a base-case. Assets and infrastructure remain intact, the crisis has been short-lived so far, and governments have poured trillions of dollars into keeping businesses liquid, preserving jobs and keeping ordinary people from financial ruin.
Former US Federal Reserve chairman Ben Bernanke has said banks are stronger today than in the global financial crisis, and that this downturn will be much shorter than in the 1930s. Stock markets seem to agree: the S&P500 is back to the levels of May 2019. The severest economic crisis since the Great Depression is treated as costing us just a year.
But as my colleague at Columbia University’s global energy centre, and former ADIA Global Head of Research Christof Rühl observes, it’s concerning that everyone’s forecasts keep getting worse. The recoveries will not be the same shape and timing everywhere: as Spain and Italy seem over the worst, Russia and Brazil’s epidemics are accelerating. What shape would a Chinese V, an American W and a Russian L add up to?
China, first-stricken, has mostly contained the virus with a strict national effort, even though it flares up again in places. But although business is reviving, it now faces the impact on its main export markets: last year, North America took 20 per cent of its goods, Europe 20 per cent, and oil exporters, badly hit by the slump in prices, another 10 per cent.
The shape of the energy business’s recovery is triply uncertain. Energy use depends on economic activity, but the type of energy used varies greatly. Oil demand in aviation and commuting has suffered worst. Petrol use is now picking up again as lockdowns are eased in China, the US, the UK and the Gulf, and Chevron chief executive Mike Wirth said, “It would appear the market has found a bottom”. But the industry now faces a likely slowdown in trade which will hit diesel for lorries and fuel oil for ships.
Natural gas was in a slump even last year but has been hit less by the virus as people still need to heat their homes and power their laptops. Ultra-cheap gas has been able to keep squeezing out dirty coal.
Renewable energy has coped best of all, because of its near-zero operating costs and, often, priority access to the grid. Some projects have been delayed by practical issues, but post-viral stimulus spending is likely to focus heavily on green energy.
Secondly, ideas about recovery themselves affect the oil market. The Opec+ group is in the middle of cutting almost 10 million barrels per day to avoid swamping the market, and US and Canadian producers have also cut back sharply as their output has become unprofitable. But with a modest recovery in West Texas prices to almost $30 per barrel, some companies have already begun turning their wells back on. Higher prices will make it harder for Opec+ to agree on extending current cuts to the year’s end and will encourage some members to “cheat” on their targets.
Such behaviour, and the massive overhang of inventories, could limit oil prices for an extended period. Despite the dismal demand situation, lower-cost producers could eventually benefit if their competitors have been driven out of business. The path of recovery for oil-producing companies and even countries is not necessarily the same as that for the industry.
Thirdly, habits and work patterns are likely to be durably changed. About 86 per cent of people surveyed said they would delay air travel even after coronavirus is largely contained. Companies and employees are likely to warm to working at home, at least part-time, and eschew costly and time-consuming conferences in physical locations.
I have attended more online conferences and webinars in the past month than on-site events in a year, more cheaply and comfortably – even if they lack the elements of human interaction and serendipity. For a while, commuters will prefer private vehicles to public transport, increasing fuel use, but that will ebb as cost and congestion push people back to buses and metros.
Simple illustrations of the path of recovery are useful, if not taken too literally. In this messy world, flexibility, resilience, and an eye for opportunities are more useful than a rigid long-term strategy. U, V, W, L spell danger for many, but success for some.
Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis
Women’s World T20, Asia Qualifier
UAE results
Beat China by 16 runs
Lost to Thailand by 10 wickets
Beat Nepal by five runs
Beat Hong Kong by eight wickets
Beat Malaysia by 34 runs
Standings (P, W, l, NR, points)
1. Thailand 5 4 0 1 9
2. UAE 5 4 1 0 8
3. Nepal 5 2 1 2 6
4. Hong Kong 5 2 2 1 5
5. Malaysia 5 1 4 0 2
6. China 5 0 5 0 0
Final
Thailand v UAE, Monday, 7am
Name: Colm McLoughlin
Country: Galway, Ireland
Job: Executive vice chairman and chief executive of Dubai Duty Free
Favourite golf course: Dubai Creek Golf and Yacht Club
Favourite part of Dubai: Palm Jumeirah
Company%20profile
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COMPANY PROFILE
Company name: BorrowMe (BorrowMe.com)
Date started: August 2021
Founder: Nour Sabri
Based: Dubai, UAE
Sector: E-commerce / Marketplace
Size: Two employees
Funding stage: Seed investment
Initial investment: $200,000
Investors: Amr Manaa (director, PwC Middle East)
THE SPECS
Engine: 4.4-litre V8
Transmission: Automatic
Power: 530bhp
Torque: 750Nm
Price: Dh535,000
On sale: Now
The Great Derangement: Climate Change and the Unthinkable
Amitav Ghosh, University of Chicago Press
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Surianah's top five jazz artists
Billie Holliday: for the burn and also the way she told stories.
Thelonius Monk: for his earnestness.
Duke Ellington: for his edge and spirituality.
Louis Armstrong: his legacy is undeniable. He is considered as one of the most revolutionary and influential musicians.
Terence Blanchard: very political - a lot of jazz musicians are making protest music right now.
Brief scores:
Juventus 3
Dybala 6', Bonucci 17', Ronaldo 63'
Frosinone 0
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
Western Clubs Champions League:
- Friday, Sep 8 - Abu Dhabi Harlequins v Bahrain
- Friday, Sep 15 – Kandy v Abu Dhabi Harlequins
- Friday, Sep 22 – Kandy v Bahrain
UAE currency: the story behind the money in your pockets
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
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Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
KILLING OF QASSEM SULEIMANI
More from Neighbourhood Watch:
UAE currency: the story behind the money in your pockets
Company%20Profile
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Last 10 winners of African Footballer of the Year
2006: Didier Drogba (Chelsea and Ivory Coast)
2007: Frederic Kanoute (Sevilla and Mali)
2008: Emmanuel Adebayor (Arsenal and Togo)
2009: Didier Drogba (Chelsea and Ivory Coast)
2010: Samuel Eto’o (Inter Milan and Cameroon)
2011: Yaya Toure (Manchester City and Ivory Coast)
2012: Yaya Toure (Manchester City and Ivory Coast)
2013: Yaya Toure (Manchester City and Ivory Coast)
2014: Yaya Toure (Manchester City and Ivory Coast)
2015: Pierre-Emerick Aubameyang (Borussia Dortmund and Gabon)
2016: Riyad Mahrez (Leicester City and Algeria)
The Equaliser 2
Director Antoine Fuqua
Starring: Denzel Washington, Bill Pullman, Melissa Leo, Ashton Sanders
Three stars
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
more from Janine di Giovanni
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
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%3Cp%3EAuthor%3A%20S%20Frederick%20Starr%3Cbr%3EPublisher%3A%20Oxford%20University%20Press%3Cbr%3EPages%3A%20290%3Cbr%3EAvailable%3A%20January%2024%3C%2Fp%3E%0A
MATCH INFO
RB Leipzig 2 (Klostermann 24', Schick 68')
Hertha Berlin 2 (Grujic 9', Piatek 82' pen)
Man of the match Matheus Cunha (Hertha Berlin
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Killing of Qassem Suleimani
The Indoor Cricket World Cup
When: September 16-23
Where: Insportz, Dubai
Indoor cricket World Cup:
Insportz, Dubai, September 16-23
UAE fixtures:
Men
Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final
Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final
Company%C2%A0profile
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Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
