Peak tight oil supply, mainly from North America, will constitute 15 per cent of all global output by the late 2020s, Opec said in its annual World Oil Outlook report.
The exporters’ group has revised its projection for the medium-term upward for the growth of US shale, which is expected to rise by 8.6 million barrels per day between 2017 and 2023.
Healthier demand outlook and higher oil prices supported shale’s buoyancy.
Oil prices have performed at an average of $72 per barrel this year, ending a three-year price slump that resulted in a massive decline in global investment in the hydrocarbons sector. Opec estimates that $11 trillion worth of investment is required in the upstream sector between 2018 and 2040.
Such investment however, “will require a supportive price environment, as well as the necessary regulatory and fiscal framework”, the report said.
_______
Read more:
Opec and allies say significant capacity exists but not needed
Iran unlikely to find support within Opec+ as it opposes group policy
Trade wars and falling Iran exports to impact supply and demand, says Opec
________
The organisation said that returning upstream investment activity will be on par with spending observed in the late 2000s, when high $100 oil price levels triggered a boom in the US tight oil supply.
The exporters’ group, which is expected to expand to include new sovereign members, also remained bullish on the prospect of global crude exports from the Middle East to the Asia Pacific, which it pegged around 5.5m bpd.
Opec also expects the petrochemicals sector, which is receiving significant investment in oil-producing countries of the Middle East, to mark the biggest increase in demand for oil.
“Demand forecast [in the petchems industry is expected] to increase by 4.5m bpd from 2017 to 2040,” the report said.
In terms of geographical demand, India is projected to see the largest additional oil demand, which will grow up to 5.8m bpd by 2040, according to Opec.
More from Neighbourhood Watch:
More from Neighbourhood Watch:
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
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Key changes
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.
