The middle of 2018 is meeting the end of 2014. That’s the last time the oil markets saw spot Brent Crude prices at the level of just under $80 (at the time of writing). The trend appears to be a return to pre-crash prices, at least from a bullish point of view. The question is, do the fundamentals of supply and demand support this perspective?
There are several drivers behind the current situation in the oil markets. Opec’s recent meeting in Vienna confirmed investors’ impressions that the supply taps would be turned back on. But - and it’s a big but - the bulls are not convinced that enough supply can reach the markets quickly enough to cover the shortfall from Iran and Venezuela.
The EU and UK may be diverging from US sanction policies on Iran, nonetheless the dampening effect of Donald Trump’s renewed economic pressures cannot be denied. Oil markets anticipate a shortage of two million barrels per day. Opec’s adjusted output deal is for Kuwait, Russia and Saudi Arabia to ramp up an extra 1 million bpd, leaving a potential shortfall of 1 million bpd for the short term. The bulls may be taking a bet that increased demand will outstrip supply over the next few months, driving the price up as a result. In other words, speculation may override the facts of demand and supply until the next definitive benchmark releases by the US' Energy Information Administration and Opec in July.
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Read more:
Oil prices fall as Saudi Arabia and Russia pump more
Trump blasts Opec and warns European companies against Iran ties
Sharjah joins UAE's oil and gas exploration drive
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At the geopolitical level, upcoming mid-term elections in the US are putting Mr Trump in the hot seat amid rising petrol prices. Ever since the 1970’s oil crisis, high fuel prices have been a significant trouble spot for the politicians in charge at the time. West Texas Intermediate prices may be relatively lower than Brent Crude, but consumers in the US will not take kindly to being out-of-pocket at the petrol station.
Mr Trump’s sanctions on Iran may have a boomerang effect on his popularity come November and he is aware of this judging from his tweets about Saudi Arabia agreeing to increase supplies. US shale may be steadily increasing its output, but US inventories show a big difference between the week ending June 22 and the equivalent period in 2017.
Stocks for the period in 2018 were at 425,352 (thousands barrels) compared to 509,203 in 2017. That’s not scraping the bottom of the barrel by any means; still, it’s a trend to take into consideration given that Opec has decided to challenge US shale on the supply front. Let’s remember that the US has increased its exports of crude oil and reduced its imports, meaning that in the case of a supply shortage over the next few months, Mr Trump’s policy of protectionist energy independence may be impacted by reduced US stocks and rising WTI prices.
It appears that the oil markets are in a phase of renewed imbalance rather than re-balance. Opec’s price range target of $55 to $65 for 2018 has been overshot on the back of Iran and Venezuela’s woes and US sanctions. It’s going to be an expensive campaign for Opec plus Russian producers to match US production and output levels at such a fast pace, so clearly investors have their work cut out for them to anticipate the next movements in Brent Crude spot prices.
In the case that benchmark prices keep rising and supplies/inventories falling, we could see Brent trading in a range of $70 to $80 per barrel in the third quarter. The alternative scenario is that supplies from US shale and Opec producers come through faster than expected, meaning Brent may trade in a range of $65 to $75 per barrel in the short term. Given the current complexity, either scenario is possible at this point, and I continue to expect volatility in the oil markets over the next few months.
Hussein Sayed is the chief market strategist at FXTM
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.8-litre%204-cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E190hp%20at%205%2C200rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20320Nm%20from%201%2C800-5%2C000rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESeven-speed%20dual-clutch%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%3C%2Fstrong%3E%206.7L%2F100km%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh111%2C195%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
The specs
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Power: 579hp
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
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LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The biog
Simon Nadim has completed 7,000 dives.
The hardest dive in the UAE is the German U-boat 110m down off the Fujairah coast.
As a child, he loved the documentaries of Jacques Cousteau
He also led a team that discovered the long-lost portion of the Ines oil tanker.
If you are interested in diving, he runs the XR Hub Dive Centre in Fujairah
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
The biog:
Languages: Arabic, Farsi, Hindi, basic Russian
Favourite food: Pizza
Best food on the road: rice
Favourite colour: silver
Favourite bike: Gold Wing, Honda
Favourite biking destination: Canada
UAE currency: the story behind the money in your pockets
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
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UAE currency: the story behind the money in your pockets
RESULTS
1.45pm: Maiden Dh75,000 1,400m
Winner: Dirilis Ertugrul, Fabrice Veron (jockey), Ismail Mohammed (trainer)
2.15pm: Handicap Dh90,000 1,400m
Winner: Kidd Malibu, Sandro Paiva, Musabah Al Muhairi
2.45pm: Maiden Dh75,000 1,000m
Winner: Raakezz, Tadhg O’Shea, Nicholas Bachalard
3.15pm: Handicap Dh105,000 1,200m
Winner: Au Couer, Sean Kirrane, Satish Seemar
3.45pm: Maiden Dh75,000 1,600m
Winner: Rayig, Pat Dobbs, Doug Watson
4.15pm: Handicap Dh105,000 1,600m
Winner: Chiefdom, Royston Ffrench, Salem bin Ghadayer
4.45pm: Handicap Dh80,000 1,800m
Winner: King’s Shadow, Richard Mullen, Satish Seemar
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
INFO
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.