Above, the Bukha A Oman oil field in Oman. Pawan Singh / The National
Above, the Bukha A Oman oil field in Oman. Pawan Singh / The National

Market analysis: Oman crude oil caught in perfect storm



Oman crude oil trading on the Dubai Mercantile Exchange continues to reflect the bearish mood that persists on global markets.

Yesterday, the new front-month October DME contract’s marker price stood at US$50.61 per barrel, the lowest since January.

Even last month prices moved sharply as the potential lifting of Iranian sanctions and buoyant Opec production heightened fears of an oversupply for the remainder of the year.

In addition, the Greek credit crisis, turmoil in the Chinese stock market, plus persistently high United States production and the strong US dollar all combined to form the perfect storm to force prices lower.

The monthly average price of the DME for July, which is used by Oman and Dubai to set their official selling price was $56.33 per barrel, down $5.51 or 9 per cent from the June average of $61.84. September-loading Oman crude closed at $52.55, a 12 per cent drop from the contract settlement price in June, the biggest monthly fall since January.

The summer losing streak has resulted in Oman crude prices falling nearly $15 per barrel from the May peak of more than $66, as strong supply and tepid demand growth tilt the market back to the downside.

Oil prices came under strong downwards pressure as Iran struck the deal with world powers that allows for an increase in crude exports.

The immediate threat to supply/demand fundamentals comes from the release of Iran’s estimated 30 million to 40 million barrels of storage – although observers noted much of this is heavy condensate which is only attractive to a limited pool of buyers.

Most analysts agree that any significant production increases will not come until at least 2016 because of the required infrastructure investment needed in Iran’s upstream system, but a number of European majors are said to have held preliminary talks on Iranian projects.

A Reuters poll from leading banks and brokerages forecast that Iran would be able to raise crude oil output by between 250,000 and 500,000 barrels per day by the end of this year and by up to 750,000 bpd by the middle of next year.

But this has not deterred Opec members from collectively increasing output to multi-year highs, noted the latest Reuters survey. The producer group increased output to a little more than 32 million bpd in July, a level not reached since 2008, when Oman crude prices peaked above $140 per barrel. The figure included a record of 3.06 million bpd from southern Iraq last month.

Opec is banking on the demand side picking up, but lower prices this year have yet to yield any significant rise in buying, as demand growth continues at a modest pace. July's turmoil in the Chinese equities market has yet to factor in oil demand, but any further slowdown in China's industrial sector will certainly dampen its appetite for oil.

However, Middle East crude performed well in relation to its European counterpart, with the Brent/Oman spread averaging about $1 per barrel last month, compared with more than $2 in June. The narrower Brent/Oman spread is likely to continue this month, according to market watchers, as Chinese companies buy key Middle East grades such as Dubai, Oman and Abu Dhabi’s Upper Zakum.

Paul Young is the head of energy products at DME.

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KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

TWISTERS

Director: Lee Isaac Chung

Starring: Glenn Powell, Daisy Edgar-Jones, Anthony Ramos

Rating: 2.5/5

Intercontinental Cup

Namibia v UAE Saturday Sep 16-Tuesday Sep 19

Table 1 Ireland, 89 points; 2 Afghanistan, 81; 3 Netherlands, 52; 4 Papua New Guinea, 40; 5 Hong Kong, 39; 6 Scotland, 37; 7 UAE, 27; 8 Namibia, 27

Mica

Director: Ismael Ferroukhi

Stars: Zakaria Inan, Sabrina Ouazani

3 stars

Florence and the Machine – High as Hope
Three stars

Libya's Gold

UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.

The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.

Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.

A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.

RESULT

Liverpool 4 Southampton 0
Jota (2', 32')
Thiago (37')
Van Dijk (52')

Man of the match: Diogo Jota (Liverpool)

EU's 20-point migration plan

1. Send EU border guards to Balkans

2. €40 million for training and surveillance

3. Review EU border protection

4. Reward countries that fund Balkans 

5. Help Balkans improve asylum system

6. Improve migrant reception facilities 

7. Close gaps in EU registration system

8. Run pilots of faster asylum system

9. Improve relocation of migrants within EU

10. Bolster migration unit in Greece

11. Tackle smuggling at Serbia/Hungary border

12. Implement €30 million anti-smuggling plan

13. Sanctions on transport linked to smuggling

14. Expand pilot deportation scheme in Bosnia 

15. Training for Balkans to deport migrants

16. Joint task forces with Balkans and countries of origin

17. Close loopholes in Balkan visa policy 

18. Monitor migration laws passed in Balkans 

19. Use visa-free travel as leverage over Balkans 

20. Joint EU messages to Balkans and countries of origin

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

MAIN CARD

Bantamweight 56.4kg
Abrorbek Madiminbekov v Mehdi El Jamari

Super heavyweight 94+kg
Adnan Mohammad v Mohammed Ajaraam

Lightweight 60kg
Zakaria Eljamari v Faridoon Alik Zai

Light heavyweight 81.4kg
Mahmood Amin v Taha Marrouni

Light welterweight 64.5kg
Siyovush Gulmamadov v Nouredine Samir

Light heavyweight 81.4kg
Ilyass Habibali v Haroun Baka

'Falling for Christmas'

Director: Janeen Damian

Stars: Lindsay Lohan, Chord Overstreet, Jack Wagner, Aliana Lohan

Rating: 1/5

The Specs

Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now

Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

Meydan racecard:

6.30pm: Handicap | US$135,000 (Dirt) | 1,400 metres

7.05pm: Handicap | $135,000 (Turf) | 1,200m

7.40pm: Dubai Millennium Stakes | Group 3 | $200,000 (T) | 2,000m

8.15pm: UAE Oaks | Group 3 | $250,000 (D) | 1,900m

8.50pm: Zabeel Mile | Group 2 | $250,000 (T) | 1,600m

9.20pm: Handicap | $135,000 (T) | 1,600m

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

First-round leaderbaord

-5 C Conners (Can)

-3 B Koepka (US), K Bradley (US), V Hovland (Nor), A Wise (US), S Horsfield (Eng), C Davis (Aus);

-2 C Morikawa (US), M Laird (Sco), C Tringale (US)

Selected others: -1 P Casey (Eng), R Fowler (US), T Hatton (Eng)

Level B DeChambeau (US), J Rose (Eng) 

+1 L Westwood (Eng), J Spieth (US)

+3 R McIlroy (NI)

+4 D Johnson (US)

THE DETAILS

Solo: A Star Wars Story

Dir: Ron Howard

Starring: Alden Ehrenreich, Emilia Clarke, Woody Harrelson

3/5

Essentials

The flights

Etihad (etihad.ae) and flydubai (flydubai.com) fly direct to Baku three times a week from Dh1,250 return, including taxes. 
 

The stay

A seven-night “Fundamental Detox” programme at the Chenot Palace (chenotpalace.com/en) costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.

Kill

Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

THE 12 BREAKAWAY CLUBS

England

Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur

Italy
AC Milan, Inter Milan, Juventus

Spain
Atletico Madrid, Barcelona, Real Madrid

TUESDAY'S ORDER OF PLAY

Centre Court

Starting at 2pm:

Elina Svitolina (UKR) [3] v Jennifer Brady (USA)

Anastasia Pavlyuchenkova (RUS) v Belinda Bencic (SUI [4]

Not before 7pm:

Sofia Kenin (USA) [5] v Elena Rybakina (KAZ)

Maria Sakkari (GRE) v Aryna Sabalenka (BLR) [7]

 

Court One

Starting at midday:

Karolina Muchova (CZE) v Katerina Siniakova (CZE)

Kristina Mladenovic (FRA) v Aliaksandra Sasnovich (BLR)

Veronika Kudermetova (RUS) v Dayana Yastermska (UKR)

Petra Martic (CRO) [8] v Su-Wei Hsieh (TPE)

Sorana Cirstea (ROU) v Anett Kontaveit (EST)

The specs

Engine: 2.0-litre turbocharged 4-cyl
Transmission: 8-speed auto
Power: 300bhp (GT) 330bhp (Modena)
Torque: 450Nm
Price: Dh299,000 (GT), Dh369,000 (Modena)
On sale: now

While you're here

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