Oil prices posted a weekly gain amid geopolitical tensions in the Middle East and an improving outlook for the US economy.
Brent, the benchmark for two thirds of the world’s oil, rose 0.63 per cent to end at $79.66 per barrel while West Texas Intermediate, the gauge that tracks US crude, settled up 0.85 per cent to $756.84 a barrel.
Crude futures have been volatile during the week due to a production cut at Libya’s largest oilfield and as traders brace for potential Iranian retaliation against Israel.
Earlier in the week, oil prices fell sharply following weaker-than-expected job figures in the US, which sparked concerns about a potential recession in the world's largest economy.
Analysts have said worries about the US economy are mostly exaggerated and that oil demand remains robust.
The number of new unemployment benefit applications in the US dropped more than expected last week, easing concerns about a deteriorating labour market and allaying fears of a hard recession.
Initial claims for state unemployment benefits decreased by 17,000 to a seasonally adjusted 233,000 for the week ending August 3, the largest decline in nearly a year, the Labour Department said on Thursday.
Meanwhile, fuel demand in the US has remained strong.
US crude inventories fell by 3.7 million barrels in the week that ended on August 2, according to the US Energy Information Administration.
Analysts polled by Reuters were expecting a drop of 700,000 barrels.
Total petroleum stocks increased by 1.3 million barrels last week, while distillate fuel inventories rose by 900,000 barrels, the EIA data showed.
Goldman Sachs expects Brent prices to maintain a $75 per barrel floor despite near-term macroeconomic concerns.
In a research note this week, the investment bank said limited recession worries, strong oil demand in the West and India, and low speculative positioning are likely to support oil prices in the short term.
On the supply side, prices received support from reduced production at Libya’s Sharara oilfield.
On Tuesday, Libya's National Oil Corporation said it would gradually reduce production at the oilfield, citing protests in the region.
Sharara, responsible for a quarter of Libya’s output, had been producing 270,000 bpd before the partial shutdown.
In the Middle East, the likelihood of a full-scale regional conflict increased last week following the assassinations of Hamas leader Ismail Haniyeh in Tehran and senior Hezbollah military commander Fouad Shukr in Beirut.
Israel has agreed to resume Gaza ceasefire talks on August 15 after calls from US, Qatari and Egyptian mediators, Prime Minister Benjamin Netanyahu's office said on Thursday.
"Following the proposal of the United States and mediators, Israel will, on August 15, send a delegation of negotiators to the agreed place to conclude the details of implementing a deal," it said.
AS IT STANDS IN POOL A
1. Japan - Played 3, Won 3, Points 14
2. Ireland - Played 3, Won 2, Lost 1, Points 11
3. Scotland - Played 2, Won 1, Lost 1, Points 5
Remaining fixtures
Scotland v Russia – Wednesday, 11.15am
Ireland v Samoa – Saturday, 2.45pm
Japan v Scotland – Sunday, 2.45pm
The Year Earth Changed
Directed by:Tom Beard
Narrated by: Sir David Attenborough
Stars: 4
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
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.”
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
