OPEC compliance not burning issue just yet

VIENNA// OPEC's decision yesterday to leave production targets unchanged was widely expected after it was tipped by the group's ministers well ahead of the meeting. As such, it will have little market impact. In coming weeks, however, crude could come under pressure from a growing realisation that the past year's upwards creep in actual OPEC output is destined to continue, regardless of whether the market is ready to absorb the extra barrels.

Some analysts suggest that by failing to raise its production ceiling, OPEC has wasted an opportunity to signal confidence in the outlook for economic recovery, the only force likely to restore global oil demand to its pre-recession level and long-term upwards trend. Normally, a rise in OPEC quotas would be bearish for crude as it would signal increased supply, while a decision to stay flat would be neutral or bullish.

But after two back-to-back years of shrinking global oil demand, these are far from normal times. Recent oil market stability is "very fragile", while the state of the global economic recovery remains "unstable and uneven", Germanico Pinto, the president of OPEC, said yesterday. The key to whether OPEC's rollover on quotas will be positive or negative for crude lies in how seriously the group's influential Arab members are perceived to be tightening up on the group's overall compliance, which has recently slipped to about 50 per cent.

"Compliance has been a little disappointing," Mohammed al Hamli, the UAE Minister of Energy, said yesterday before the meeting. Other Arab ministers, however, have refrained from even such mild criticism. Saudi Arabia's oil minister, the most influential within OPEC, said this week he was pleased with compliance. Algeria's veteran oil minister, Chakib Khelil, indicated that member discipline was not a burning issue for OPEC.

The market was worried "about the recovery, about the geopolitical situation, about the weakening US dollar", he said. "So why should we be worried about compliance?" The ministers may not be bothered, but oil bulls should be. @Email:tcarlisle@thenational.ae

RESULT

Kolkata Knight Riders 169-7 (20 ovs)
Rajasthan Royals 144-4 (20 ovs)

Kolkata win by 25 runs

Next match

Sunrisers Hyderabad v Kolkata Knight Riders, Friday, 5.30pm

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COMPANY PROFILE

Name: Mamo

Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua

Based: Dubai, UAE

Number of employees: 28

Sector: Financial services

Investment: $9.5m

Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors.

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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Key facilities

Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
Premier League-standard football pitch
400m Olympic running track
NBA-spec basketball court with auditorium
600-seat auditorium
Spaces for historical and cultural exploration
An elevated football field that doubles as a helipad
Specialist robotics and science laboratories
AR and VR-enabled learning centres
Disruption Lab and Research Centre for developing entrepreneurial skills

ELIO

Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett

Directors: Madeline Sharafian, Domee Shi, Adrian Molina

Rating: 4/5

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Conflict, drought, famine

Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.

Band Aid

Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.