Oil erased earlier gains to trade near US$44 a barrel in New York as Goldman Sachs warned Opec that it is not doing enough to clear a surplus.
Futures slid 0.5 per cent after advancing 1.2 per cent earlier. Oil may slip below $40 unless there are sustained inventory declines and a drop in the rig count, according to Goldman Sachs. US crude stockpiles probably fell by 2.85 million barrels last week, a Bloomberg survey showed before an Energy Information Administration report Wednesday.
Oil is in a bear market amid concern that rising global supply will offset curbs by Opec and its partners including Russia. US crude inventories remain more than 100 million barrels above the five-year average. The nation’s shale output can expand further with prices in the mid-$40s, according to JPMorgan Chase.
“The market is still searching for a new equilibrium, and in particular for a lower band for the oil-price range,” said Jan Edelmann, an analyst at HSH Nordbank in Hamburg. Investor sentiment is “close to its lows”, which may cause a “renewed downswing in prices to sub-$40”.
West Texas Intermediate for August delivery was at $44.18 a barrel on the New York Mercantile Exchange, down 22 cents, at 12:37am UAE time. Total volume traded was about 31 per cent above the 100-day average. The contract climbed 17 cents to $44.40 on Monday, advancing after a weekly loss.
Brent for September settlement was down 26 cents at $46.62 a barrel on the London-based ICE Futures Europe exchange, after rising 17 cents to $46.88 on Monday. The global benchmark crude traded at a premium of $2.24 to September WTI.
Evidence of further Opec actions could also help prices rally, Damien Courvalin, an analyst at Goldman, said in a note dated July 10. There is another opportunity for the group to increase output cuts, but this should be done in a “shock and awe” manner, with little public announcement, he said.
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
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Founder: Kamal Nazha
Based: Dubai
Founded: 2020
Number of employees: 5
Sector: Technology
Funding: $450,000
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Our family matters legal consultant
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Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Pari
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Dubai Bling season three
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Formula Middle East Calendar (Formula Regional and Formula 4)
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On Women's Day
Dr Nawal Al-Hosany: Why more women should be on the frontlines of climate action
Shelina Janmohamed: Why shouldn't a spouse be compensated fairly for housework?
Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
The National Editorial: Is there much to celebrate on International Women's Day 2021?
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Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
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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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MATCH INFO
Uefa Champions League last-16, second leg:
Real Madrid 1 (Asensio 70'), Ajax 4 (Ziyech 7', Neres 18', Tadic 62', Schone 72')
Ajax win 5-3 on aggregate