Oil prices fell on Monday after Goldman Sachs reduced its oil price forecasts, citing stronger-than-expected supply and weak economic growth in top crude importer China.
The investment bank expects Brent crude, the benchmark for two thirds of the world’s oil, to trade at an average of $86 a barrel in December, down from its previous estimate of $95.
It also lowered the Brent forecast for May 2024 to $93, from $100.
Brent was trading 2.43 per cent lower at $72.97 a barrel at 1.42 pm UAE time while WTI, the gauge that tracks US crude, was down 2.47 per cent at $68.25 a barrel.
Opec+ cuts will reduce pressure on long-term oil prices by increasing spare capacity, which is projected to rise by 2.5 million barrels per day annually in the third quarter of this year, Goldman Sachs said in a research note on Sunday.
The requirement for a smaller future supply growth enables the market to fund more competitive projects at a slightly lower oil cost curve, Goldman Sachs said.
“Oil prices are down $10 per barrel over the past two months despite last week's announcement that Saudi Arabia will deliver an extra extendable production cut as significant supply beats from Iran and Russia have driven speculative positioning to near record-lows,” the bank said.
On June 4, top crude exporter Saudi Arabia announced an output cut of a million bpd for July and said it could be extended depending on market conditions.
Goldman Sachs said the full reduction may last for three months before being halved to 500,000 bpd from October 2023.
At that point, an oil market deficit of more than 2 million bpd could have pushed oil prices to the “low-to-mid $80s”, the bank said.
Meanwhile, the Opec+ group of 23 oil-producing countries will stick to current production cuts until the end of 2024 as concerns about the global economy weigh on the outlook for crude demand.
The group has total production curbs of 3.66 million bpd, or about 3.7 per cent of global demand, in place, including a 2 million bpd reduction agreed on last year and voluntary cuts of 1.66 million bpd announced in April.
Goldman Sachs said its forecast cut was also driven by higher-than-expected supply from producers facing western sanctions, including Russia, Iran and Venezuela.
Moscow’s oil exports have nearly “full recovered” despite western price caps and the decision by many companies to stop buying crude barrels from the country, the bank said.
Russian oil exports hit 8.3 million bpd in April, the highest since Moscow’s invasion of Ukraine last year, the International Energy Agency said in a report last month.
“The fight against inflation may have been associated with changes in sanctions enforcement, and previously constrained productive capacity has been unlocked,” the bank said.
Goldman Sachs also lowered its oil demand forecasts for Europe, Japan, South Korea and China, citing weak petrochemical demand.
The IEA has predicted that global crude demand will hit record levels this year on the back of an economic recovery in China.
However, economic growth in the Asian country has been largely uneven since it lifted Covid-19 restrictions earlier this year.
Investors are also keeping an eye on the US Federal Reserve's interest rate decision scheduled for tomorrow.
The recent debt ceiling deal in the US and positive economic data have lifted hopes that the Fed will pause its rate increase programme next week.
"If there is no major surprise on the inflation data front, the Fed should keep the interest rates unchanged at this week’s policy meeting," said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
"But that doesn’t mean that the Fed is done hiking. Whatever pause we might see this week will come with a hawkish accompanying statement, and a threat that the Fed could resume its rate hikes next meeting."
Higher interest rates could slow the global economy and dampen crude demand.
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2002 Giselle Khoury (Colombia)
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2008 Carina El-Keddissi (Brazil)
2009 Sara Mansour (Brazil)
2010 Daniella Rahme (Australia)
2011 Maria Farah (Canada)
2012 Cynthia Moukarzel (Kuwait)
2013 Layla Yarak (Australia)
2014 Lia Saad (UAE)
2015 Cynthia Farah (Australia)
2016 Yosmely Massaad (Venezuela)
2017 Dima Safi (Ivory Coast)
2018 Rachel Younan (Australia)
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Russia and Ukraine have been locked in a bitter conflict since 2014, when Ukraine’s Kremlin-friendly president was ousted, Moscow annexed Crimea and then backed a separatist insurgency in the east.
Fighting between the Russia-backed rebels and Ukrainian forces has killed more than 14,000 people. In 2015, France and Germany helped broker a peace deal, known as the Minsk agreements, that ended large-scale hostilities but failed to bring a political settlement of the conflict.
The Kremlin has repeatedly accused Kiev of sabotaging the deal, and Ukrainian officials in recent weeks said that implementing it in full would hurt Ukraine.
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Notable cricketers and political careers
- India: Kirti Azad, Navjot Sidhu and Gautam Gambhir (rumoured)
- Pakistan: Imran Khan and Shahid Afridi (rumoured)
- Sri Lanka: Arjuna Ranatunga, Sanath Jayasuriya, Tillakaratne Dilshan (rumoured)
- Bangladesh (Mashrafe Mortaza)
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
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Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
UAE currency: the story behind the money in your pockets
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
