Opec lowered its supply and demand forecasts in its monthly market report as a result of the Ukraine war as well as lockdowns in China and fears of lower consumption. Oil prices moved back above $100 a barrel, increasing the likelihood that the bloc and its alliance of producers in Opec+ will stick with their monthly production targets.
Brent, the global benchmark for two thirds of the world's oil, was trading 0.54 per cent higher at $105.20 per barrel at 1.13pm UAE time on Wednesday, while West Texas Intermediate, the gauge that tracks US crude, was up 0.42 per cent at $101.85 per barrel.
Opec, which represents some of the top oil producers, said global demand will rise by 3.67 million barrels per day in 2022, down 480,000 bpd from its previous forecast. Total consumption is expected to surpass the 100 million bpd mark in the third quarter, as predicted previously by the oil group.
“In 2022, oil demand growth was revised to the downside … accounting for declines in global GDP [gross domestic product] on account of the geopolitical developments and the resurgence of the Omicron variant on global oil demand in China,” Opec said.
The group lowered their growth forecast for the global economy to 3.9 per cent this year from last month’s assessment of 4.2 per cent in the wake of the Russia-Ukraine conflict, as well as a surge in the coronavirus infections in China, the world’s second-largest economy, and rising inflation.
The International Monetary Fund is also set to lower its global growth estimate for 2022 when it releases an update to its World Economic Outlook this month. The Washington-based fund has already lowered its global growth projection for 2022 to 4.4 per cent.
“While it is forecast that both Russia and Ukraine will be facing recessions in 2022, the rest of the global economy will be thoroughly impacted as well,” Opec said.
“The strong rise in commodity prices in combination with ongoing supply-chain bottlenecks and Covid-19-related logistical logjams in China and elsewhere are all fuelling global inflation, which was already at a high level.”
In March, oil prices soared above $139 a barrel, the highest since 2008, worsening inflationary pressures.
Prices have since eased as the US and other International Energy Agency (IEA) member countries announced plans to release 120 million barrels of oil from their emergency reserves to boost supply in global markets. This is on top of the 120 million barrels that the US plans to release from its Strategic Petroleum Reserve, which will bring the total additional supply to the market to 240 million barrels worldwide.
Opec lowered both its supply and demand forecasts “as a consequence of the war in Ukraine,” Emirates NBD said in a note on Wednesday. “With near even impacts on both sides of oil market balances, that helps to reinforce the Opec+ position of only gradually returning barrels to the market.”
Opec and its allies, including Russia, are unwinding record output cuts put in place in 2020. The group will add another 432,000 bpd of crude to the market in May, staying the course of incremental increases in global oil supply, it said last month.
“The black gold seems to be in the price recovery stage again as traders feel more optimistic about oil demand,” said Naeem Aslam, chief market analyst at Avatrade. “The critical price level for Brent oil prices is $100, and as long as the price continues to trade above this support zone, we are likely to see a continuation of the upward trend.”
Oil traders will also be watching US crude inventory data closely, as the release of the US strategic oil reserves pushed oil prices lower.
“If we see the inventory data showing a significant drawdown, we could see bulls pushing oil prices higher and vice versa,” Mr Aslam said.
Non-Opec supply in 2022 is forecast to fall by 300,000 bpd to 2.7 million bpd due to a decline in supplies from Russia following sanctions, according to Opec.
Russia is the world's second-largest energy exporter, accounting for about 10 per cent of the world’s energy output, including 17 per cent of its natural gas and 12 per cent of its oil. The US and UK have already banned Russian oil imports.
Total Opec crude oil production averaged 28.56 million bpd in March, up 57,000 bpd from the previous month. Crude oil output increased mainly in Saudi Arabia, Kuwait and the UAE, while production declined in Libya, Nigeria and Congo, Opec data based on secondary sources revealed.
The 23-member Opec+ group will hold its next meeting on May 5 to review market dynamics and decide about future production.
On Wednesday, the IEA also revised down its outlook for 2022 global demand for oil because of the lockdowns in China.
The Paris-based agency forecasts consumption dropping by 260,000 barrels, it said in its monthly report, with demand now expected to average 99.4 million bpd in 2022, which is up by 1.9 million bpd from 2021.
“Severe new lockdown measures amid surging Covid cases in China have led to a downward revision in our expectations for global oil demand in 2Q 22 and for the year as a whole,” the IEA said.
Key takeaways from Opec monthly report:
♦ Crude oil spot prices rose for the third consecutive month in March. The benchmark gained more than $20 per barrel on a monthly average and WTI gained almost $17 a barrel, on escalating geopolitical tensions in Eastern Europe and concerns this might result in large oil supply shortages, amid trade dislocations
♦ World economic growth in 2022 is revised down to 3.9 per cent from 4.2 per cent in the previous month’s assessment. This takes into account the impact of the Russia-Ukraine conflict, as well as the effects from the pandemic, with the risks skewed to the downside
♦ World oil demand growth in 2021 is revised slightly down by 0.04 million bpd, standing now at 5.7 million bpd
♦ Non-Opec supply in 2022 is revised down by 0.3 million bpd to 2.7 million bpd, mainly due to a downward revision for Russia.
INDIA'S%20TOP%20INFLUENCERS
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UAE currency: the story behind the money in your pockets
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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COMPANY PROFILE
Name: Cofe
Year started: 2018
Based: UAE
Employees: 80-100
Amount raised: $13m
Investors: KISP ventures, Cedar Mundi, Towell Holding International, Takamul Capital, Dividend Gate Capital, Nizar AlNusif Sons Holding, Arab Investment Company and Al Imtiaz Investment Group
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.
A semen analysis of the father showed abnormal sperm so the couple required IVF.
Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.
A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.
On day three of the process, 14 embryos were biopsied for gender selection.
The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.
Day five of the treatment saw two male embryos transferred to the patient.
The woman recorded a positive pregnancy test two weeks later.
Know your Camel lingo
The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home
Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless
Asayel camels - sleek, short-haired hound-like racers
Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s
Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival
At a glance
Fixtures All matches start at 9.30am, at ICC Academy, Dubai. Admission is free
Thursday UAE v Ireland; Saturday UAE v Ireland; Jan 21 UAE v Scotland; Jan 23 UAE v Scotland
UAE squad Rohan Mustafa (c), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Jumanji: The Next Level
Director: Jake Kasdan
Stars: Dwayne Johnson, Kevin Hart, Karen Gillan, Jack Black, Nick Jonas
Two out of five stars
More from Rashmee Roshan Lall
Spec%20sheet
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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
How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
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Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Tell-tale signs of burnout
- loss of confidence and appetite
- irritability and emotional outbursts
- sadness
- persistent physical ailments such as headaches, frequent infections and fatigue
- substance abuse, such as smoking or drinking more
- impaired judgement
- excessive and continuous worrying
- irregular sleep patterns
Tips to help overcome burnout
Acknowledge how you are feeling by listening to your warning signs. Set boundaries and learn to say ‘no’
Do activities that you want to do as well as things you have to do
Undertake at least 30 minutes of exercise per day. It releases an abundance of feel-good hormones
Find your form of relaxation and make time for it each day e.g. soothing music, reading or mindful meditation
Sleep and wake at the same time every day, even if your sleep pattern was disrupted. Without enough sleep condition such as stress, anxiety and depression can thrive.
