Oil prices edged higher on Thursday on supply concerns, as the European Union continued to push for a ban on Russian energy imports amid Moscow’s conflict with Ukraine, as well as rising demand as China, the world’s largest importer of oil, began easing Covid-19 movement restrictions.
Brent, the global benchmark for two thirds of the world's oil, was trading 0.68 per cent higher at $114.81 a barrel at 3.52pm UAE time on Thursday. West Texas Intermediate, the gauge that tracks US crude, was up 0.81 per cent at $111.22 a barrel.
“Oil prices are being driven higher by a combination of demand optimism and supply tightness,” Stephen Brennock, an oil analyst at the London-based PVM Oil Associates told The National.
“The near-term demand outlook should get a boost from the start of the US summer driving season and the upcoming lifting of Covid curbs in Shanghai. Meanwhile, underpinning the supportive supply backdrop are expectations that the EU is on the verge of enacting a ban on Russian oil imports.”
The EU, the world’s largest trading bloc, plans to ban Russian oil over the next six months and refined fuels by the end of the year. But Hungary, an EU member, is opposing any ban, saying it would amount to dropping a “nuclear bomb” on its economy.
Meanwhile, China, the world’s second-largest economy, started easing Covid-19 restrictions as infection numbers in the country are falling. Shanghai, the country’s commercial centre, plans to reopen shopping centres and shops from June 1, while the city's port has resumed operations.
“Both Brent crude and WTI have held on to all their recent gains, suggesting the weaker side is the upside in prices," Jeffrey Halley, senior market analyst of Asia Pacific at Oanda, said.
“While China slowdown fears are receding in the minds of traders, fears persist around the increasing tightness of the US diesel market ... I expect prices to remain firm for the rest of the week, with the global data calendar fairly light.”
Average petroleum spot prices have fluctuated between $98 and $130 per barrel since the Ukraine conflict began and are expected to settle at about $107 this year, the International Monetary Fund predicts. Emirates NBD expects Brent to average $120 per barrel in 2022.
“The widely regarded National Oceanic and Atmospheric Administration declared this week that it anticipates an 'above-normal' hurricane season in the second half of 2022," Ehsan Khoman, director of emerging markets research for Europe, the Middle East and Africa at Japan's MUFG Bank, said in a research note.
"This adds another bullish risk to the physical decoupling from Russia, rising demand, depleted inventories, thinning spare capacity and tight product markets."
The supply side has also been affected by dropping investments in the oil and gas sector, as governments focus on cutting emissions to limit global warming, leading to lower spare capacity.
The total investment in the upstream part of the oil and gas sector fell 23 per cent below pre-coronavirus levels to $341 billion in 2021, the International Energy Forum and IHS Markit said in a report last year.
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Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
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Torque 624Nm @ 4,100rpm
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Pharaoh's curse
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He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
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Fuel economy, combined 5.3L / 100km
