Brent likely to average $70 next year, says American bank

The WTI grade is expected to average around $59, helped both by demand growth and a production cut from OPEC and some of its allies. (Reuters)
Updated 05 December 2018
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Brent likely to average $70 next year, says American bank

  • Bank of America Merrill Lynch expects the WTI grade to average around $59, helped both by demand growth and a production cut from OPEC and some of its allies
  • BAML said that rising inventories had started to become a problem for OPEC and its allies and so was expecting a meaningful reduction in OPEC output

LONDON: Brent crude is expected to average $70 per barrel in 2019 according to an energy sector outlook from Bank of America Merrill Lynch (BAML).
It expects the WTI grade to average around $59, helped both by demand growth and a production cut from OPEC and some of its allies.
OPEC is due to meet today in Vienna, followed by talks with allies such as Russia on Friday.
“The global oil market has sold off sharply in recent weeks mostly on the back of a major shift in US and Iran supply expectations for 2019,” said Francisco Blanch, head of global commodities and derivatives research.
“While US production has easily beaten expectations in September and October, it is also important to note that Russia, Saudi Arabia, and Libya oil production has surprised to the upside in recent months.”
BAML said that rising inventories had started to become a problem for OPEC and its allies and so was expecting a “meaningful reduction” in OPEC output.
Russian Energy Minister Alexander Novak said that he had held a “good” meeting with his Saudi counterpart Khalid Al-Falih on Wednesday and that more discussions were planned.
Oman’s oil minister said that he believed OPEC and its allies would reach a deal this week to cut oil production, Reuters reported.


Passenger numbers rise at Dubai International Airport

Updated 33 min 22 sec ago
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Passenger numbers rise at Dubai International Airport

  • Operator welcomes monthly jump after travel decline in past year
  • Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018

LONDON: The number of passengers passing through Dubai International Airport rose by 2.1 percent in October compared with the same month last year, the operator Dubai Airports said on Monday.

The increase follows a drop in passenger traffic in September and a wider slowdown in the number of travelers passing through the emirate’s airport over the past year.

“Dubai International has been on record stating that passenger growth would be somewhat lower than in previous years, so this current performance is in line with my expectations,” said aviation analyst Saj Ahmad from Strategic Aero Research.

“That said, the airport has still grown over 2017 and will likely eclipse its 2018 target of handling over 90 million passengers and remain the world’s busiest international airport,” he said.

Dubai Airports CEO Paul Griffiths told a conference in Dubai last month that he expected just over 90 million passengers to use the airport this year, according to Reuters.

A total of 7 million passengers used the airport in October, compared with 6.9 million in the same month last year.

In September, passenger traffic fell by 0.2 percent compared with the previous year. The decline was blamed on the Eid Al-Adha holiday — with an associated spike in travel — falling in September last year.

Total passenger traffic in 2017 rose by just 5.5 percent year-on-year to reach 88.24 million people. This is a slower rate of growth than the 7.2 percent increase in 2015-16 and the 10.7 percent jump recorded between 2014-2015.

Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018.

Under the strategy, the number of airport stands has been increased and terminal buildings expanded.

As demand grows, further work on the airport’s infrastructure will be needed, said Ahmad.

“Demand is not infinite — the airport is operating at nearly 98 percent capacity, so it stands to reason that only so much growth can be absorbed,” he said.

DXB handled 237,499 tons of cargo in October, a 2.5 percent increase on the previous month. Overall cargo volumes have fallen year-to-date by 0.9 percent to 2.1 million tons.