Crude benchmarks have narrowed their spread and rallied to seven and three-year highs after Opec+ abandoned a meeting amid differences between key producers.
Brent, the international benchmark under which two thirds of the world's oil is traded, rose 0.7 per cent to $77.77 a barrel at 11.40am UAE time, the highest since October 2018. West Texas Intermediate, the main North American gauge, was up more than 2.32 per cent at $76.90 a barrel, the highest level since November 2014.
The failure by Opec+ to reach an agreement on future production increases leaves the market undersupplied, with the planned return of 2 million barrels per day hanging in the balance.
WTI has gained about 58 per cent this year while Brent is up by about 50 per cent. Both benchmarks rallied in the first half of the year on the back of rapid vaccination campaigns in developed countries and the reopening of the US, Chinese and European economies.
The easing of Covid-19 movement restrictions has also given oil prices a boost as demand for energy continues to rise.
"Crude oil prices reached their highest levels since the second half of 2018 following the failure of Opec+ to reach a production agreement," said UBS strategist Giovanni Staunovo.
"With the oil market already in deficit and supply growth lagging oil demand growth, the crude market will likely tighten further this summer."
UBS raised its estimates for both Brent and WTI by $2 a barrel to $80 and $77, respectively, by September.
Opec+ postponed a much-delayed meeting scheduled for Monday night in order to consider the UAE's position on the baseline used to calculate its production quota.
The UAE, Opec's third-biggest producer, has urged the exporters' group to "decouple" output restrictions from plans to extend its existing agreement beyond April 2022.
According to estimates, the discrepancy between the baseline used to calculate the UAE's quota under Opec+ and its current production capacity is 18 per cent – the highest among the producers within the group.
"No announcement has been made for a next meeting, leaving the market hanging as to what happens to oil production from August onwards," said Daniel Richards, Mena economist at Dubai-based Emirates NBD.
"At present, the default option would appear to be that output remains at the same level from the end of July, leaving markets considerably more undersupplied than had been expecting."
Norbert Rücker, head economics and next generation research at Swiss bank Julius Baer said "the current basis for the quotas does not take into account the UAE’s recent capacity expansion and constrains the country more than any other petro-nation."
Deadlocks in Opec and the supergroup "are a common element", he added. "Cohesion was always fragile, and this particular rift had appeared before. Eventually, a compromise should prevail as shattering the deal leaves too much at stake."
THE APPRENTICE
Director: Ali Abbasi
Starring: Sebastian Stan, Maria Bakalova, Jeremy Strong
Rating: 3/5
If you go…
Emirates launched a new daily service to Mexico City this week, flying via Barcelona from Dh3,995.
Emirati citizens are among 67 nationalities who do not require a visa to Mexico. Entry is granted on arrival for stays of up to 180 days.
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
The biog
Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.
His advice to anyone starting out in business is to have no fear as life is about taking on challenges.
“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.
"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”
Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.
He relaxes by spending time with his family at home, and enjoying his wife’s India cooking.
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
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