A combination of Opec+ production cuts and strong demand from China, the world’s largest crude importer, is expected to push oil prices higher from next month.
But despite several bullish factors, Brent, the benchmark for two thirds of the world’s oil, is trading at roughly $76 a barrel, having lost nearly 11 per cent of its value since the beginning of the year
So why have prices not headed higher?
A combination of non-fundamental factors, lagging demand and stronger-than-expected supply are at play, according to Rystad Energy.
The Norway-based consultancy, which expects oil demand to grow by 1.7 million barrels per day this year, has estimated a deficit of 2.4 million bpd for the remainder of 2023.
“Much will depend on China’s economic performance in the second half of this year and the effectiveness of the country’s recently announced stimulus measures, and on the ability of the US and Europe to avoid an economic slowdown amid interest rates hikes,” said Jorge Leon, senior vice president at Rystad Energy.
Last week, oil prices posted a weekly gain as a surge in Chinese refining activity reassured traders that domestic fuel consumption was growing in the country.
China’s central bank also cut a key short-term lending rate for the first time in 10 months after disappointing economic data.
The People’s Bank of China lowered its seven-day reverse repo rate by 10 basis points to 1.9 per cent, from 2 per cent, as part of efforts to support economic growth.
The country’s crude imports reached 12.3 million bpd in March before falling to 11.4 million bpd in last month, Rystad Energy said.
“These strong import numbers suggest oil demand remains solid; however, the caveat is that, at the same time, crude storage has been increasing in the last few months, which implies that demand is potentially lagging,” Mr Leon said.
On the supply side, there was a gap between Russia’s actual and promised production cuts in May, Rystad Energy said.
Moscow’s output declined by only 400,000 bpd last month, compared with its pledge to cut by 500,000 bpd, the consultancy 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 its oil market report last month.
“The mismatch between Russia's production decline and increased seaborne crude exports is significant and puzzling,” Mr Leon said.
“The intriguing aspect is that if this ongoing disparity persists, with high exports and alleged production cuts, it could potentially lead to a significant shift in the supply dynamics and provoke a notable response from the rest of the Opec+ group,” he said.
On June 4, top crude exporter Saudi Arabia announced a unilateral output cut of 1 million bpd for July and said it could be extended.
The Opec+ alliance of 23 oil-producing countries has said it would stick to its existing output cuts until the end of 2024.
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 last year and voluntary cuts of 1.66 million bpd announced in April.
“The recent underperformance of energy commodities compared to other asset classes is primarily influenced by the macroeconomic environment and asset allocation decisions,” Mr Leon said.
“High interest rates and inflation have driven a shift towards safer assets, such as cash and bonds, due to recessionary fears and financial uncertainty.”
Last week, the US central bank paused its interest rate increases to assess the impact of its inflation-fighting measures on the economy, but signalled that it would raise rates again later this year.
Higher interest rates could slow the global economy and dampen crude demand. The Federal Reserve has raised interest rates by a combined 500 basis points since March 2022.
With declining inflation, the appeal of using commodities and particularly crude oil as an inflation hedge has diminished, Mr Leon said.
“As a result, speculative positioning on the oil basket has plummeted, reflecting a low level of confidence in tight physical markets in the coming months.”
UAE%20v%20West%20Indies
%3Cp%3EFirst%20ODI%20-%20Sunday%2C%20June%204%20%0D%3Cbr%3ESecond%20ODI%20-%20Tuesday%2C%20June%206%20%0D%3Cbr%3EThird%20ODI%20-%20Friday%2C%20June%209%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3EMatches%20at%20Sharjah%20Cricket%20Stadium.%20All%20games%20start%20at%204.30pm%0D%3Cbr%3E%0D%3Cbr%3E%3Cstrong%3EUAE%20squad%3C%2Fstrong%3E%0D%3Cbr%3EMuhammad%20Waseem%20(captain)%2C%20Aayan%20Khan%2C%20Adithya%20Shetty%2C%20Ali%20Naseer%2C%20Ansh%20Tandon%2C%20Aryansh%20Sharma%2C%20Asif%20Khan%2C%20Basil%20Hameed%2C%20Ethan%20D%E2%80%99Souza%2C%20Fahad%20Nawaz%2C%20Jonathan%20Figy%2C%20Junaid%20Siddique%2C%20Karthik%20Meiyappan%2C%20Lovepreet%20Singh%2C%20Matiullah%2C%20Mohammed%20Faraazuddin%2C%20Muhammad%20Jawadullah%2C%20Rameez%20Shahzad%2C%20Rohan%20Mustafa%2C%20Sanchit%20Sharma%2C%20Vriitya%20Aravind%2C%20Zahoor%20Khan%0D%3C%2Fp%3E%0A
More coverage from the Future Forum
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
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
Other key dates
-
Finals draw: December 2
-
Finals (including semi-finals and third-placed game): June 5–9, 2019
-
Euro 2020 play-off draw: November 22, 2019
-
Euro 2020 play-offs: March 26–31, 2020
Top tips
Create and maintain a strong bond between yourself and your child, through sensitivity, responsiveness, touch, talk and play. “The bond you have with your kids is the blueprint for the relationships they will have later on in life,” says Dr Sarah Rasmi, a psychologist.
Set a good example. Practise what you preach, so if you want to raise kind children, they need to see you being kind and hear you explaining to them what kindness is. So, “narrate your behaviour”.
Praise the positive rather than focusing on the negative. Catch them when they’re being good and acknowledge it.
Show empathy towards your child’s needs as well as your own. Take care of yourself so that you can be calm, loving and respectful, rather than angry and frustrated.
Be open to communication, goal-setting and problem-solving, says Dr Thoraiya Kanafani. “It is important to recognise that there is a fine line between positive parenting and becoming parents who overanalyse their children and provide more emotional context than what is in the child’s emotional development to understand.”
Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
COMPANY%20PROFILE%20
%3Cp%3EName%3A%20DarDoc%3Cbr%3EBased%3A%20Abu%20Dhabi%3Cbr%3EFounders%3A%20Samer%20Masri%2C%20Keswin%20Suresh%3Cbr%3ESector%3A%20HealthTech%3Cbr%3ETotal%20funding%3A%20%24800%2C000%3Cbr%3EInvestors%3A%20Flat6Labs%2C%20angel%20investors%20%2B%20Incubated%20by%20Hub71%2C%20Abu%20Dhabi's%20Department%20of%20Health%3Cbr%3ENumber%20of%20employees%3A%2010%3C%2Fp%3E%0A
Keane on …
Liverpool’s Uefa Champions League bid: “They’re great. With the attacking force they have, for me, they’re certainly one of the favourites. You look at the teams left in it - they’re capable of scoring against anybody at any given time. Defensively they’ve been good, so I don’t see any reason why they couldn’t go on and win it.”
Mohamed Salah’s debut campaign at Anfield: “Unbelievable. He’s been phenomenal. You can name the front three, but for him on a personal level, he’s been unreal. He’s been great to watch and hopefully he can continue now until the end of the season - which I’m sure he will, because he’s been in fine form. He’s been incredible this season.”
Zlatan Ibrahimovic’s instant impact at former club LA Galaxy: “Brilliant. It’s been a great start for him and for the club. They were crying out for another big name there. They were lacking that, for the prestige of LA Galaxy. And now they have one of the finest stars. I hope they can go win something this year.”
What%20is%20cystic%20fibrosis%3F
%3Cul%3E%0A%3Cli%3ECystic%20fibrosis%20is%20a%20genetic%20disorder%20that%20affects%20the%20lungs%2C%20pancreas%20and%20other%20organs.%3C%2Fli%3E%0A%3Cli%3EIt%20causes%20the%20production%20of%20thick%2C%20sticky%20mucus%20that%20can%20clog%20the%20airways%20and%20lead%20to%20severe%20respiratory%20and%20digestive%20problems.%3C%2Fli%3E%0A%3Cli%3EPatients%20with%20the%20condition%20are%20prone%20to%20lung%20infections%20and%20often%20suffer%20from%20chronic%20coughing%2C%20wheezing%20and%20shortness%20of%20breath.%3C%2Fli%3E%0A%3Cli%3ELife%20expectancy%20for%20sufferers%20of%20cystic%20fibrosis%20is%20now%20around%2050%20years.%3C%2Fli%3E%0A%3C%2Ful%3E%0A
The biog
Mission to Seafarers is one of the largest port-based welfare operators in the world.
It provided services to around 200 ports across 50 countries.
They also provide port chaplains to help them deliver professional welfare services.
MATCH INFO
Watford 2 (Sarr 50', Deeney 54' pen)
Manchester United 0
'Downton Abbey: A New Era'
Director: Simon Curtis
Cast: Hugh Bonneville, Elizabeth McGovern, Maggie Smith, Michelle Dockery, Laura Carmichael, Jim Carter and Phyllis Logan
Rating: 4/5
How it works
Each player begins with one of the great empires of history, from Julius Caesar's Rome to Ramses of Egypt, spread over Europe and the Middle East.
Round by round, the player expands their empire. The more land they have, the more money they can take from their coffers for each go.
As unruled land and soldiers are acquired, players must feed them. When a player comes up against land held by another army, they can choose to battle for supremacy.
A dice-based battle system is used and players can get the edge on their enemy with by deploying a renowned hero on the battlefield.
Players that lose battles and land will find their coffers dwindle and troops go hungry. The end goal? Global domination of course.
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
ICC T20 Rankings
1. India - 270 ranking points
2. England - 265 points
3. Pakistan - 261 points
4. South Africa - 253 points
5. Australia - 251 points
6. New Zealand - 250 points
7. West Indies - 240 points
8. Bangladesh - 233 points
9. Sri Lanka - 230 points
10. Afghanistan - 226 points
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EXare%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EJanuary%2018%2C%202021%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EPadmini%20Gupta%2C%20Milind%20Singh%2C%20Mandeep%20Singh%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunds%20Raised%3A%20%3C%2Fstrong%3E%2410%20million%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%20%3C%2Fstrong%3E28%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Eundisclosed%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EMS%26amp%3BAD%20Ventures%2C%20Middle%20East%20Venture%20Partners%2C%20Astra%20Amco%2C%20the%20Dubai%20International%20Financial%20Centre%2C%20Fintech%20Fund%2C%20500%20Startups%2C%20Khwarizmi%20Ventures%2C%20and%20Phoenician%20Funds%3C%2Fp%3E%0A
The bio:
Favourite film:
Declan: It was The Commitments but now it’s Bohemian Rhapsody.
Heidi: The Long Kiss Goodnight.
Favourite holiday destination:
Declan: Las Vegas but I also love getting home to Ireland and seeing everyone back home.
Heidi: Australia but my dream destination would be to go to Cuba.
Favourite pastime:
Declan: I love brunching and socializing. Just basically having the craic.
Heidi: Paddleboarding and swimming.
Personal motto:
Declan: Take chances.
Heidi: Live, love, laugh and have no regrets.
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20SupplyVan%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3Cbr%3E%3Cstrong%3ELaunch%20year%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%2029%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20MRO%20and%20e-commerce%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20Seed%3C%2Fp%3E%0A
New schools in Dubai
'The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting up a Generation for Failure'
Greg Lukianoff and Jonathan Haidt, Penguin Randomhouse
More from Neighbourhood Watch
Info
What: 11th edition of the Mubadala World Tennis Championship
When: December 27-29, 2018
Confirmed: men: Novak Djokovic, Rafael Nadal, Kevin Anderson, Dominic Thiem, Hyeon Chung, Karen Khachanov; women: Venus Williams
Tickets: www.ticketmaster.ae, Virgin megastores or call 800 86 823
Results
6pm: Dubai Trophy – Conditions (TB) $100,000 (Turf) 1,200m
Winner: Silent Speech, William Buick (jockey), Charlie Appleby
(trainer)
6.35pm: Jumeirah Derby Trial – Conditions (TB) $60,000 (T)
1,800m
Winner: Island Falcon, Frankie Dettori, Saeed bin Suroor
7.10pm: UAE 2000 Guineas Trial – Conditions (TB) $60,000 (Dirt)
1,400m
Winner: Rawy, Mickael Barzalona, Salem bin Ghadayer
7.45pm: Al Rashidiya – Group 2 (TB) $180,000 (T) 1,800m
Winner: Desert Fire, Hector Crouch, Saeed bin Suroor
8.20pm: Al Fahidi Fort – Group 2 (TB) $180,000 (T) 1,400m
Winner: Naval Crown, William Buick, Charlie Appleby
8.55pm: Dubawi Stakes – Group 3 (TB) $150,000 (D) 1,200m
Winner: Al Tariq, Pat Dobbs, Doug Watsons
9.30pm: Aliyah – Rated Conditions (TB) $80,000 (D) 2,000m
Winner: Dubai Icon, Patrick Cosgrave, Saeed bin Suroor
Spare
Profile
Company name: Spare
Started: March 2018
Co-founders: Dalal Alrayes and Saurabh Shah
Based: UAE
Sector: FinTech
Investment: Own savings. Going for first round of fund-raising in March 2019
WWE TLC results
Asuka won the SmackDown Women's title in a TLC triple threat with Becky Lynch and Charlotte Flair
Dean Ambrose won the Intercontinental title against Seth Rollins
Daniel Bryan retained the WWE World Heavyweight Championship against AJ Styles
Ronda Rousey retained the Raw Women's Championship against Nia Jax
Rey Mysterio beat Randy Orton in a chairs match
Finn Balor defeated Drew McIntyre
Natalya beat Ruby Riott in a tables match
Braun Strowman beat Baron Corbin in a TLC match
Sheamus and Cesaro retained the SmackDown Tag Titles against The Usos and New Day
R-Truth and Carmella won the Mixed Match Challenge by beating Jinder Mahal and Alicia Fox
Bio
Born in Dibba, Sharjah in 1972.
He is the eldest among 11 brothers and sisters.
He was educated in Sharjah schools and is a graduate of UAE University in Al Ain.
He has written poetry for 30 years and has had work published in local newspapers.
He likes all kinds of adventure movies that relate to his work.
His dream is a safe and preserved environment for all humankind.
His favourite book is The Quran, and 'Maze of Innovation and Creativity', written by his brother.
