Oil prices pared back gains on Friday to close the week lower, despite supply disruption concerns in Libya and positive economic data from the US, the world’s largest economy.
West Texas Intermediate, the gauge that tracks US crude, fell 3.1 per cent to $73.55 per barrel at the market close on Friday.
Brent, the benchmark for two thirds of the world's oil, dropped 1.43 per cent to $78.8 a barrel on Friday, notching its first back-to-back monthly loss this year.
Both benchmarks on Friday were initially headed for a weekly gain as supply concerns continue to outweigh demand fundamentals on sluggish economic growth in China, the world's second-largest economy and a top importer of oil.
However, markets were weighed down as traders considered a Reuters report that Opec+ is expected to proceed with a planned output hike from October amid the Libyan outages and pledged cuts by some members to compensate for overproduction counter the impact of sluggish demand, according to the Reuters report, citing six sources from the producer group.
“Libyan crude production continues to be disrupted by an ongoing political stalemate between the rival governments in the country’s east and west over control of the central bank,” Singapore-based oil consultancy Vanda Insights said in a research note on Friday.
Libya remains split between the UN-recognised government in Tripoli, led by Prime Minister Abdul Hamid Dbeibah, and a rival administration in the east, supported by military commander Field Marshal Khalifa Haftar. Most of Libya's oilfields fall under his control.
On Monday, Libya’s eastern government announced the shutdown of all oilfields, suspending production and exports. This follows a decision by a rival administration in Tripoli to remove central bank governor Sadiq Al Kabir, whose role was to distribute the country's oil revenue between the two governments.
Mr Al Kabir and other senior bank staff are reported to have been forced to leave the country due to security threats, according to the Financial Times on Friday.
More than half of Libya's oil production, or about 700,000 barrels per day, was offline on Thursday and exports were halted at several ports following a standoff between rival political factions, according to Reuters.
Libyan production losses could reach between 900,000 and 1 million barrels per day and last for several weeks, it reported citing Rapidan Energy Group.
The country’s oil production reached 1.17 million bpd in July, data from Opec’s monthly oil market report shows.
Escalation in tensions between Israel and Lebanon’s militant group Hezbollah as well as positive economic data from the US that could boost demand in the country are also supporting oil prices.
US economy boost for demand
The US economy grew faster than initially thought in the second quarter amid strong consumer spending, the latest data from the Commerce Department's Bureau of Economic Analysis show.
The country recorded gross domestic product growth of 3 per cent annually in the last quarter, up from an initial estimate of 2.8 per cent rate reported last month.
“The positive economic growth surprised analysts and alleviated worries about a significant downturn,” Priyanka Sachdeva, senior market analyst at Phillip Nova, said. “With the US being the top consumer of oil, a stronger US economy suggests that there will likely be consistent demand for crude oil.”
Meanwhile, Iraq assured Opec of its full conformity with oil production guidelines to stabilise markets following the visit of Opec’s secretary general to the country this week.
“Iraq presented clear and determined steps to compensate for overproduced volumes and gave assurances that it would achieve full conformity going forward,” an Opec statement said on Thursday, citing its secretary general Haitham Al Ghais.
Iraq is the second biggest oil producer within Opec group after Saudi Arabia, with an output of 4.25 million bpd in July.
Kazakhstan, which is part of Opec+ group that is playing a key role in stabilising oil markets also assured its “commitment to fulfilling its obligations” and adhering to output guidelines.
Iraq and Kazakhstan compensation plans
Earlier this month, the two countries updated their compensation plans for their overproduced volumes for the first 7 months of 2024 which totalled about 1.4 million bpd for Iraq and 699,000 barrels per day for Kazakhstan, according to Opec.
Iraq would cut 90,000 bpd this month and 95,000 bpd next month and the same volume in October. It would also reduce production by 100,000 and 110,000 for the months of November and December. It will also continue to cut output every month till September next year.
Kazakhstan also outlined its compensation plan starting from August this year to September next year for overproducing.
Opec+ group, which includes Saudi Arabia and Russia, in June agreed to extend output cuts of 3.66 million bpd, which were initially planned to end this year, until the end of 2025.
At the same time, the additional 2.2 million bpd voluntary production cuts of eight Opec+ member states were extended by three months until the end of September.
The view from The National
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
High profile Al Shabab attacks
- 2010: A restaurant attack in Kampala Uganda kills 74 people watching a Fifa World Cup final football match.
- 2013: The Westgate shopping mall attack, 62 civilians, five Kenyan soldiers and four gunmen are killed.
- 2014: A series of bombings and shootings across Kenya sees scores of civilians killed.
- 2015: Four gunmen attack Garissa University College in northeastern Kenya and take over 700 students hostage, killing those who identified as Christian; 148 die and 79 more are injured.
- 2016: An attack on a Kenyan military base in El Adde Somalia kills 180 soldiers.
- 2017: A suicide truck bombing outside the Safari Hotel in Mogadishu kills 587 people and destroys several city blocks, making it the deadliest attack by the group and the worst in Somalia’s history.
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.”
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Killing of Qassem Suleimani
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The details
Heard It in a Past Life
Maggie Rogers
(Capital Records)
3/5
If you go
- The nearest international airport to the start of the Chuysky Trakt is in Novosibirsk. Emirates (www.emirates.com) offer codeshare flights with S7 Airlines (www.s7.ru) via Moscow for US$5,300 (Dh19,467) return including taxes. Cheaper flights are available on Flydubai and Air Astana or Aeroflot combination, flying via Astana in Kazakhstan or Moscow. Economy class tickets are available for US$650 (Dh2,400).
- The Double Tree by Hilton in Novosibirsk ( 7 383 2230100,) has double rooms from US$60 (Dh220). You can rent cabins at camp grounds or rooms in guesthouses in the towns for around US$25 (Dh90).
- The transport Minibuses run along the Chuysky Trakt but if you want to stop for sightseeing, hire a taxi from Gorno-Altaisk for about US$100 (Dh360) a day. Take a Russian phrasebook or download a translation app. Tour companies such as Altair-Tour ( 7 383 2125115 ) offer hiking and adventure packages.
The specs
Engine: 2.9-litre, V6 twin-turbo
Transmission: seven-speed PDK dual clutch automatic
Power: 375bhp
Torque: 520Nm
Price: Dh332,800
On sale: now
Coffee: black death or elixir of life?
It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?
Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.
The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.
The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.
Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver.
The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.
But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.
Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.
It also raises blood pressure, which is largely problematic for people with existing conditions.
So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.
Rory Reynolds
