Oman crude oil trading on the Dubai Mercantile Exchange continued to consolidate in the low US$60 per barrel range last month, as prices held up relatively well despite surging Opec production, the possible easing of international sanctions on Iran and the latest financial turmoil in Europe.
The monthly average crude price of the DME for June, which Oman and Dubai use to set their official selling price, was $61.84 per barrel, down from $63.62 in May. September-loading Oman crude closed at $60.13, a small drop from the $61.62 contract settlement price in May, but overall prices traded in a relatively narrow trading range of between $60 and $64.
Prices averaged $57.06 per barrel in the first six months of this year, compared with $105.05 in the first half of last year. But in the past two months Oman has largely found an equilibrium at between $60 and $65 per barrel, the most stable trading range since the oil price collapse started last July.
Although the early Opec meeting last month predictably maintained the official output quota at 30 million barrels per day (bpd), early reports suggest that Opec production in June exceeded 31.5 million bpd, which Reuters noted was a three-year high for the group.
“Although the market has been remarkably tolerant of it, rising Opec production has been a key element in the global supply and demand surplus, and early indications suggest that very much remained the case in June,” said Tim Evans, an energy futures specialist at Citibank.
The Reuters report noted the biggest increase last month came from Iraq, where exports from southern Iraq jumped to 3 million bpd, while Saudi Arabia continues to pump oil at about 10.5 million bpd.
The already high production levels in the Middle East have led to fears that a lifting of sanctions on Iran would add to a potential supply glut, although analysts have pointed out that it would take several months for Iran to step up export levels.
The continuing turmoil in Greece also added another layer of uncertainty, as a knock-on effect could dent the already fragile European economy and hamper oil demand.
Meanwhile, China comfortably remained the top buyer of Oman crude, according to the latest export figures released by Oman's oil ministry. Almost 20 million barrels from the May loading programme is scheduled to discharge in China, out of the total export programme of 24.5 million barrels.
Demand for physical Oman crude on the DME remains strong, with more than 19 million barrels of crude scheduled for delivery next month, the third-highest on record, having exceeded 20 million barrels twice this year.
The new front-month September DME contract was trading just above $60 this month, but Oman was performing relatively well against its North Sea benchmark counterpart with the Brent versus Oman spread narrowing to about $1.50 per barrel, compared with more than $2 per barrel last month.
Paul Young is the head of energy products at DME.
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Spain drain
CONVICTED
Lionel Messi Found guilty in 2016 of of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying €4.1m in taxes on income earned from image rights. Sentenced to 21 months in jail and fined more than €2m. But prison sentence has since been replaced by another fine of €252,000.
Javier Mascherano Accepted one-year suspended sentence in January 2016 for tax fraud after found guilty of failing to pay €1.5m in taxes for 2011 and 2012. Unlike Messi he avoided trial by admitting to tax evasion.
Angel di Maria Argentina and Paris Saint-Germain star Angel di Maria was fined and given a 16-month prison sentence for tax fraud during his time at Real Madrid. But he is unlikely to go to prison as is normal in Spain for first offences for non-violent crimes carrying sentence of less than two years.
SUSPECTED
Cristiano Ronaldo Real Madrid's star striker, accused of evading €14.7m in taxes, appears in court on Monday. Portuguese star faces four charges of fraud through offshore companies.
Jose Mourinho Manchester United manager accused of evading €3.3m in tax in 2011 and 2012, during time in charge at Real Madrid. But Gestifute, which represents him, says he has already settled matter with Spanish tax authorities.
Samuel Eto'o In November 2016, Spanish prosecutors sought jail sentence of 10 years and fines totalling €18m for Cameroonian, accused of failing to pay €3.9m in taxes during time at Barcelona from 2004 to 2009.
Radamel Falcao Colombian striker Falcao suspected of failing to correctly declare €7.4m of income earned from image rights between 2012 and 2013 while at Atletico Madrid. He has since paid €8.2m to Spanish tax authorities, a sum that includes interest on the original amount.
Jorge Mendes Portuguese super-agent put under official investigation last month by Spanish court investigating alleged tax evasion by Falcao, a client of his. He defended himself, telling closed-door hearing he "never" advised players in tax matters.
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Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Rafael Nadal's record at the MWTC
2009 Finalist
2010 Champion
Jan 2011 Champion
Dec 2011 Semi-finalist
Dec 2012 Did not play
Dec 2013 Semi-finalist
2015 Semi-finalist
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Dec 2016 Champion
2017 Did not play
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
