Oil prices weaken as Libya restarts output from its biggest field

Oil prices remained flat during the opening session on Monday as markets braced for the return of Libyan crude.

The North African country’s biggest oilfield, El Sharara, resumed production after a force majeure of about 10 months that halted exports amid political clashes in the country.

The possible return of Libyan barrels comes at a time when Opec+, the producer alliance led by Saudi Arabia and Russia, has been gradually increasing output.

Oil prices set for biggest weekly gain since June

Opec expects global oil demand to rebound by 2025

The group, which undertook a historic correction in output earlier this year, is currently cutting back 7.7 million barrels per day.

Libya, which has so far been exempt from the pact, and Iran and Venezuela could possibly derail efforts by the group to drain the excess supply from the market.

Brent, the international oil benchmark, fell by 3.08 per cent to trade at $41.53 per barrel at 8.55pm UAE time.

West Texas Intermediate, the key gauge for US crude, was down 3.33 per cent at $39.25 per barrel.

“Benchmark crude futures pared some of their late-week gains by Friday settlement, with early trading on Monday [registering] further weakening so far,” JBC Energy said in a note yesterday.

“Strikes in Norway have come to a conclusion, after having threatened significant cuts to the country’s oil and gas supply, while Libya’s NOC [National Oil Corporation] lifted the force majeure from the Sharara oilfield on Sunday.”

The strike in Norway, which affected about a quarter of the country’s oil output, was resolved after an agreement with workers was reached.

Production from the Nordic state is also set to mount significant downward pressure on prices.

Markets are also factoring in the return of Iranian crude as the chances of US Democratic candidate Joe Biden winning the presidential election, which is a few weeks away, increase.

A win by Mr Biden is expected to improve prospects for the lifting of sanctions against Iran, according to some analysts.

Mr Biden was vice president in the Obama administration which spearheaded the Iran nuclear deal, known as the Joint Comprehensive Plan of Action.

Jasper Lawler, head of research at the London Capital Group, said there is a chance that Mr Biden would revive the Iran nuclear deal.

“That would lift sanctions on the country and allow Iran to export its oil to many more countries, which would no longer face the wrath of the US,” he said.

“A sudden dearth of Iranian supply is bearish for oil prices under Biden, especially in the context of tepid demand during the pandemic.”

Oil demand remains weak, hurt by movement restrictions enforced across the world during the first half of the year.

Meanwhile, a second wave of Covid-19 cases threatens to hit recovering demand as the number of infections and deaths in major energy consuming countries such as the US and India rises.

There were more than 37.9 million infections around the world and more than 1.08 million deaths as of Monday, according to Worldometer.

The number of infections in the US was more than eight million, with India not far off at 7.1 million.

In its latest world oil outlook, Opec forecast that global demand for crude will hit 103.7 million bpd by 2025, exceeding levels reached before the virus began to spread.

Ed Bell, senior director of market economics at Emirates NBD, remained optimistic about an oil market recovery as early as next year.

“We see a recovery that is happening in demand, certainly from the absolute troughs that we saw across the second quarter of 2020 across many economies and the supply adjustments that we have seen taken by Opec+,” he told an S&P Platts conference.

The Dubai bank projects that Brent will trade at $50 a barrel next year.

However, Mr Bell expects the benchmark to hover between $40 and $50 for “quite some time”.

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In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.

- Abdullah Ishnaneh, Partner, BSA Law

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Libya's Gold

UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.

The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.

Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.

A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.

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Always make sure food is completely cool before freezing.
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Ensure the food is well wrapped in foil or cling film. Even better, store in fully sealable, labelled containers or zip-lock freezer bags.
The easiest and safest way to defrost items such as the stews and sauces mentioned is to do so in the fridge for several hours or overnight.

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Sole survivors

Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
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Citizenship-by-investment programmes

United Kingdom

The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).

All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.

The Caribbean

Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.

Portugal

The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.

“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.

Greece

The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.

Spain

The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.

Cyprus

Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.

Malta

The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.

The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.

Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.

Egypt

A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.

Source: Citizenship Invest and Aqua Properties