The rising number of coronavirus infections are sparking concern over a potential slowdown in global demand growth for oil in the second half of 2020, as countries consider reimposing strict measures to contain a potential second wave of the pandemic.
Oil demand growth has slumped this year due to strict mobility measures in place across the world but measures taken by Opec and its allies to restrict supply shored up prices. Brent was down 0.57 per cent at $45.20 per barrel at 7.39am UAE time, while WTI was down 0.40 per cent at $42.72 per barrel.
The International Energy Agency last week cut demand growth projections for the first time in many months by 140,000 barrels per day, while Opec pared its forecast by 100,000 bpd.
“Demand recovery, especially for the second half of this year will be slower than the first half of this year,” said Zhuwei Wang, lead analyst, Middle East commodity analytics at S&P Global Platts.
He cited the potential for a second outbreak of the virus as a looming concern for oil markets. The coronavirus has infected more than 22 million people as of Tuesday, according to Worldometer, which tracks the pandemic. Around 778,102 have succumbed to the disease so far. Countries that contribute to significantly driving demand growth for oil, such as the US, Brazil, India, Russia and South Africa, have the highest number of infections globally.
Platts Analytics estimates that oil demand will decline by 8.2 million bpd year-on-year in 2020, but will increase again by 6.7m bpd in 2021.
“In 2021 even if we are seeing some kind of demand recovery, the absolute will still be 1.5m bpd lower than 2019,” said Mr Wang.
In comparison, the IEA has forecast an 8.1m bpd slide in demand for 2020, while Opec expects oil demand to grow by 7m bpd in 2021.
Oil demand growth is expected to remain tepid long-term once the pandemic’s impact on education and the future workforce is also considered.
“In the mid-term maybe ... 400 million [fewer] people will enter into the middle class in the next 10 to 20 years and that actually will be translated into a huge amount of demand losses,” Mr Wang said.
"Covid-19 will lead to a lot of young people dropping out of school, [resulting in a] labour force with potential lower wages, leading to lower disposable income and that will all translate into lower demand growth,” he added.
In June, the World Bank estimated a 5.2 per cent contraction in global gross domestic product for 2020 as the pandemic triggers the deepest recession since the Great Depression.
Consultancy Wood Mackenzie also maintains a pessimistic view of oil demand recovery in the near term, citing the continued impact of Covid-19.
“Our H1 2020 outlook anticipates an oil price rebound as demand starts rising post-coronavirus. However, a second large-scale lockdown [across major economies] would deepen the recession, and possibly delay any rebound in GDP until 2022. This would have a significant impact on the oil and gas sectors,” said Dulles Wang, director, Americas gas research at Wood Mackenzie.
The consultancy sees Brent rising to $86 per barrel by 2030 in its base scenario. However, in the event of a second wave, resulting in widespread movement restrictions, the international benchmark is forecast to fall to $70 per barrel over the same period.
Meanwhile, on the supply side, Opec+ producers are continuing to cut back production, albeit in a tapered manner. The group, which is currently slashing 7.7m bpd, is convening its joint ministerial monitoring committee on Wednesday.
The group will "reiterate the strong compliance level” but maintain focus on elevating the level of conformity in an environment where oil demand remains fragile, said Giovanni Staunovo, commodity analyst at UBS.
Opec+ which has Saudi Arabia and Russia at the helm, will receive plans from Iraq, Angola, Kazakhstan and Nigeria on implementing compensatory cuts to make up for their lack of compliance in the second quarter.
UBS expects the markets to be undersupplied for the rest of the year, with Brent reaching $55 per barrel in the first half of 2021. Supply from the US shale basins, however, is unlikely to recover until West Texas Intermediate climbs above the $50 per barrel mark, Mr Staunovo said.
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3C%2Fstrong%3E%3A%20ASI%20(formerly%20DigestAI)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Quddus%20Pativada%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Artificial%20intelligence%2C%20education%20technology%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%243%20million-plus%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20GSV%20Ventures%2C%20Character%2C%20Mark%20Cuban%3C%2Fp%3E%0A
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
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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Australia
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Saudi Arabia
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South Korea
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Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Turkish Ladies
Various artists, Sony Music Turkey
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
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Killing of Qassem Suleimani
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
MATCH INFO
Uefa Champions League, semi-final result:
Liverpool 4-0 Barcelona
Liverpool win 4-3 on aggregate
Champions Legaue final: June 1, Madrid
MATCH INFO
Uefa Champions League, semi-final result:
Liverpool 4-0 Barcelona
Liverpool win 4-3 on aggregate
Champions Legaue final: June 1, Madrid
Scoreline
Al Wasl 1 (Caio Canedo 90 1')
Al Ain 2 (Ismail Ahmed 3', Marcus Berg 50')
Red cards: Ismail Ahmed (Al Ain) 77'
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Employment lawyer Meriel Schindler of Withers Worldwide shares her tips on achieving equal pay
Do your homework
Make sure that you are being offered a fair salary. There is lots of industry data available, and you can always talk to people who have come out of the organisation. Where I see people coming a cropper is where they haven’t done their homework.
Don’t be afraid to negotiate
It’s quite standard to negotiate if you think an offer is on the low side. The job is unlikely to be withdrawn if you ask for money, and if that did happen I’d question whether you want to work for an employer who is so hypersensitive.
Know your worth
Women tend to be a bit more reticent to talk about their achievements. In my experience they need to have more confidence in their own abilities – men will big up what they’ve done to get a pay rise, and to compete women need to turn up the volume.
Work together
If you suspect men in your organisation are being paid more, look your boss in the eye and say, “I want you to assure me that I’m paid equivalent to my peers”. If you’re not getting a straight answer, talk to your peer group and consider taking direct action to fix inequality.
Sholto Byrnes on Myanmar politics
MATCH INFO
Day 2 at the Gabba
Australia 312-1
Warner 151 not out, Burns 97, Labuschagne 55 not out
Pakistan 240
Shafiq 76, Starc 4-52
BUNDESLIGA FIXTURES
Friday (UAE kick-off times)
Borussia Dortmund v Paderborn (11.30pm)
Saturday
Bayer Leverkusen v SC Freiburg (6.30pm)
Werder Bremen v Schalke (6.30pm)
Union Berlin v Borussia Monchengladbach (6.30pm)
Eintracht Frankfurt v Wolfsburg (6.30pm)
Fortuna Dusseldof v Bayern Munich (6.30pm)
RB Leipzig v Cologne (9.30pm)
Sunday
Augsburg v Hertha Berlin (6.30pm)
Hoffenheim v Mainz (9pm)
Green ambitions
- Trees: 1,500 to be planted, replacing 300 felled ones, with veteran oaks protected
- Lake: Brown's centrepiece to be cleaned of silt that makes it as shallow as 2.5cm
- Biodiversity: Bat cave to be added and habitats designed for kingfishers and little grebes
- Flood risk: Longer grass, deeper lake, restored ponds and absorbent paths all meant to siphon off water
