Unplanned outages on the oil-producing US Gulf Coast as a result of Hurricane Ida are set to wipe out the additional supply that is being added to the market by the Opec+ group of producers, the International Energy Agency (IEA) says.
The tropical storm shut in an estimated 1.7 million barrels per day of output along the US Gulf coast with potential supply losses set to reach 30 million barrels, the Paris-based agency said.
Global supply fell 540,000 bpd in August, compared with the previous month, to reach 96.1 million bpd, with the volumes set to hold steady through September.
"An uptrend in supply should resume in October as Opec+ continues to unwind cuts, outages are resolved and as other producers increase," the IEA said.
Opec+, which refers to the group of producers led by Saudi Arabia and Russia, have been drawing down their supply restriction pact and plan to bring 2 million bpd by the end of the year.
The group is set to meet on October 1 to action a further 400,000 bpd of supply for October.
Oil prices continued to trade higher on Tuesday. Brent, the international benchmark for crude, was up 0.64 per cent at $73.98 per barrel at 2.03pm UAE time. West Texas Intermediate, which tracks US crude grades, was up 0.62 per cent at $70.89 per barrel.
"Oil prices are rising as supply-side constraints tighten. Oil producers have yet to recover from Hurricane Ida's devastation, and they are now bracing for another tropical storm, Nicholas, which is expected to be as powerful as Hurricane Ida," said Naeem Aslam, chief market analyst at AvaTrade.
"Almost 44 per cent of the area's oil supply has been cut off," he added.
The IEA also revised its demand expectations for the third quarter of this year by 200,000 bpd after consumption fell for three straight months in a row.
The energy agency expects oil demand to grow by 5.2 million bpd in 2021 and 3.2 million bpd in 2022.
"Already signs are emerging of Covid cases abating with demand now expected to rebound by a sharp 1.6 million bpd in October, and continuing to grow until end-year," the agency said.
Global oil demand is expected to be higher than pre-pandemic levels in the second half of 2022, according to the IEA. However, overall consumption next year is set to remain just under 2019 levels at 99.4 million bpd.
The IEA's assessment is more bearish than Opec, which estimated that demand in 2022 could exceed pre-pandemic levels in its latest monthly market report.
Opec expects oil demand for 2022 to reach 100.8 million bpd as the crude exporting group sees strong economic recovery on the back of widespread inoculation efforts.
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.
For 2021, Opec revised down its demand growth estimates for the fourth quarter 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.
"Opec expects demand to improve by 6 million bpd in 2021 and 4.2 million bpd in 2022, which means this market will stay in deficit this year but that should change in the first quarter," said Edward Moya, senior market analyst at Oanda.
UAE currency: the story behind the money in your pockets
Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
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.”
