Opec has lowered its demand forecast for a second straight month due to softer global economic growth caused by the war in Ukraine, Covid-19 lockdowns in China and concerns about lower consumption.
Demand is forecast at 3.4 million barrels per day this year, 300,000 bpd less than the oil-producing bloc's previous forecast in April, Opec said on Thursday.
Total consumption is expected to surpass 100 million bpd in the third quarter, as previously predicted by the group.
“Demand in 2022 is expected to be impacted by ongoing geopolitical developments in Eastern Europe, as well as Covid-19 pandemic restrictions,” Opec said.
Geopolitical and economic uncertainty is mounting around the world after Russia’s military offensive in Ukraine, with inflation also rising due to higher commodity prices and supply chain disruptions.
Last month, the International Monetary Fund lowered its 2022 growth forecast to 3.6 per cent, from its previous estimate of 4.4 per cent in January.
In its latest report, Opec also lowered its growth forecast for the global economy to 3.5 per cent this year, from last month’s assessment of 3.9 per cent.
“Geopolitical tensions in Eastern Europe and their impact on the global economy, particularly in Europe, continue,” Opec said. “Global inflation has risen further and hence, financial tightening continues. Furthermore, supply chain bottlenecks constitute an ongoing concern.”
Inflation in the US, the world's largest economy, remains at a 40-year high after hitting 8.3 per cent last month, while prices in Europe increased by 7.5 per cent in April.
Rising prices have prompted central banks to raise interest rates, with some analysts warning of economies sliding into recessions.
China, the world’s second-largest economy and top oil importer, continues to restrict movement in Shanghai and other big cities to stem the spread of the pandemic.
Shanghai, the country’s largest city, has been in lockdown for more than a month as authorities follow a “zero-Covid” strategy.
Oil, which rose to above $139 a barrel in March after Russia’s military offensive, has been trading lower in the past few weeks amid demand concerns. Oil prices are up by about 60 per cent from last year.
Brent, the global benchmark for two thirds of the world's oil, was trading 1.51 per cent lower at $105.89 a barrel at 3.42pm UAE time on Thursday while West Texas Intermediate, the gauge that tracks US crude, was down 1.42 per cent to $104.21 a barrel.
Oil demand in Organisation for Economic Co-operation and Development (OECD) countries grew by 3.3 million bpd in the first-quarter, said Opec. Demand in non-OECD countries grew by 1.9 million bpd.
Spending on oil and gas exploration and production in non-Opec countries increased by $16 billion in 2021 to $350bn, and is expected to rise by about 14 per cent in 2022, Opec said.
Spending is expected to go up in Brazil, the US, Canada, and Norway due to higher oil prices. However, the overall level remains below pre-pandemic levels and significantly below the high of $749bn in 2014.
Five personal finance podcasts from The National
To help you get started, tune into these Pocketful of Dirham episodes
·
Balance is essential to happiness, health and wealth
·
What is a portfolio stress test?
·
What are NFTs and why are auction houses interested?
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How gamers are getting rich by earning cryptocurrencies
·
Should you buy or rent a home in the UAE?
Who are the Soroptimists?
The first Soroptimists club was founded in Oakland, California in 1921. The name comes from the Latin word soror which means sister, combined with optima, meaning the best.
The organisation said its name is best interpreted as ‘the best for women’.
Since then the group has grown exponentially around the world and is officially affiliated with the United Nations. The organisation also counts Queen Mathilde of Belgium among its ranks.
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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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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MATCH INFO
Group B
Bayern Munich v Tottenham, midnight (Thursday)
The biogs
Name: Zinah Madi
Occupation: Co-founder of Dots and links
Nationality: Syrian
Family: Married, Mother of Tala, 18, Sharif, 14, Kareem, 2
Favourite Quote: “There is only one way to succeed in anything, and that is to give it everything.”
Name: Razan Nabulsi
Occupation: Co-founder of Dots and Links
Nationality: Jordanian
Family: Married, Mother of Yahya, 3.5
Favourite Quote: A Chinese proverb that says: “Be not afraid of moving slowly, be afraid only of standing still.”
The biog
Name: Samar Frost
Born: Abu Dhabi
Hobbies: Singing, music and socialising with friends
Favourite singer: Adele
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
UAE currency: the story behind the money in your pockets
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
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
FIXTURES
December 28
Stan Wawrinka v Pablo Carreno Busta, 5pm
Milos Raonic v Dominic Thiem, no earlier then 7pm
December 29 - semi-finals
Rafael Nadal v Stan Wawrinka / Pablo Carreno Busta, 5pm
Novak Djokovic v Milos Raonic / Dominic Thiem, no earlier then 7pm
December 30
3rd/4th place play-off, 5pm
Final, 7pm
Scream%20VI
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
