Opec expects oil demand for 2022 to exceed pre-pandemic levels, reaching 100.8 million barrels per day as the crude exporting group sees strong economic recovery on the back of widespread inoculation efforts.
“Ongoing improvements in vaccination rates and a potential increase in public confidence in managing Covid-19 is anticipated to be more widespread in 2022, further supporting the recovery of oil demand,” particularly transport fuels, Opec said in its latest monthly market report.
The group also revised upwards its estimated demand growth for 2022, up by 900,000 bpd to 4.2 million bpd amid expectations of higher levels of economic activity and fewer movement restrictions.
“As vaccination rates rise, the Covid-19 pandemic is expected to be better managed, and economic activities and mobility will firmly return to pre-Covid-19 levels,” the Vienna-based group said.
For 2021, Opec revised its demand growth estimates for the fourth quarter - lower by 120,000 bpd - over concerns about the Delta variant's impact on energy demand. The Delta variant of coronavirus, which originated in India, is a particularly virulent strain that has been responsible for a surge in infections across the world.
The group left overall demand growth in 2021 unchanged at 6 million bpd. Global consumption this year is expected to hit 96.7 million bpd.
“An upwards revision due to positive mobility indicators for OECD [Organisation for Economic Co-operation and Development] countries in 3Q21 was offset by a downwards revision to 4Q21, given the risk to oil demand fundamentals stemming from the increase in Covid-19 cases, primarily related to the Delta variant,” the report said.
Global cases of Covid-19 are now above 225 million, with more than 4.6 million deaths registered as of Monday, pandemic-tracking site Worldometer reported.
Demand centres for crude such as the US, India and Brazil continue to lead in terms of total numbers of infections.
Opec, alongside non-members led by Russia, is set to convene for a ministerial meeting on October 1 to discuss its supply pact.
Opec+, as the supergroup is known, will bring 2 million bpd back to the markets by the end of the year. The group is set to decide whether to bring an additional 400,000 bpd of supply in October.
Oil prices rose during the opening session on Monday. Brent, the international benchmark for crude, rose 0.69 per cent to trade at $73.42 per barrel at 4.06pm UAE time. West Texas Intermediate, which tracks US crude grades, was up 0.79 per cent at $70.27 per barrel.
Separately, Bank of America estimated that oil prices could hit $100 per barrel by the middle of next year if the Northern Hemisphere winter turns out to be colder than usual.
“Global oil demand could surge by 1 million to 2 million bpd. Under this scenario, the oil market deficit this winter could easily exceed 2 million bpd and our $100 per barrel oil target for the middle of next year could quickly be rolled forward six months,” the bank said in a report on Monday.
The US bank sees Brent remaining “rangebound” in the second half of the year. The crude benchmark could hit $75 per barrel by year-end if the markets are not swayed by upside risks.
“A new Covid-19 wave, taper tantrum, a China debt crisis and the return of Iranian crude barrels could push oil lower,” the report cautioned.
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.”
The bio
Date of Birth: April 25, 1993
Place of Birth: Dubai, UAE
Marital Status: Single
School: Al Sufouh in Jumeirah, Dubai
University: Emirates Airline National Cadet Programme and Hamdan University
Job Title: Pilot, First Officer
Number of hours flying in a Boeing 777: 1,200
Number of flights: Approximately 300
Hobbies: Exercising
Nicest destination: Milan, New Zealand, Seattle for shopping
Least nice destination: Kabul, but someone has to do it. It’s not scary but at least you can tick the box that you’ve been
Favourite place to visit: Dubai, there’s no place like home
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
TRAINING FOR TOKYO
A typical week's training for Sebastian, who is competing at the ITU Abu Dhabi World Triathlon on March 8-9:
- Four swim sessions (14km)
- Three bike sessions (200km)
- Four run sessions (45km)
- Two strength and conditioning session (two hours)
- One session therapy session at DISC Dubai
- Two-three hours of stretching and self-maintenance of the body
ITU Abu Dhabi World Triathlon
For more information go to www.abudhabi.triathlon.org.
LAST 16
SEEDS
Liverpool, Manchester City, Barcelona, Paris St-Germain, Bayern Munich, RB Leipzig, Valencia, Juventus
PLUS
Real Madrid, Tottenham, Atalanta, Atletico Madrid, Napoli, Borussia Dortmund, Lyon, Chelsea
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
More coverage from the Future Forum
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Avatar: Fire and Ash
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