WEEKLY ENERGY RECAP: Prices remain in narrow band

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Updated 28 June 2020

WEEKLY ENERGY RECAP: Prices remain in narrow band

  • Oil demand is improving, but the uneven pace of the rebound has created challenges

Brent crude declined to $41.02 per barrel last week as WTI also retreated to $38.49 per barrel. Both grades were down by about a dollar.

On a monthly basis, Brent has been moving in a narrow range between $38 and $42 per barrel since the end of May.

This is a healthy sign both for the oil market and the wider global economy, especially given the upheaval caused by the pandemic and the recent pickup in cases across some major economies.

The slight drop in oil prices might be explained by the record spike in COVID-19 cases and the increase in global oil inventories.

The huge glut remained in oil and refined petroleum product inventories onshore and offshore in idled tankers, despite some news about such floating storage volumes starting to shrink.

It is worth remembering that the record output cuts undertaken by OPEC+ were not intended to provide a short-term boost for prices but rather a medium-term improvement for market balance.

Although oil demand is improving in most countries, this recovery is getting more selective in terms of demand for refined petroleum products. Gasoline consumption is rising as economies emerge from lockdown, but the uneven pace of the rebound has created challenges for refineries seeking to anticipate demand.

There has, for example, been a shift from diesel to gasoline as people are slow to return to public transport. This change in refining behavior will affect the refining margins for other products such as jet kerosene fuel.

Jet fuel consumption is still down by almost half compared with the pre-pandemic era. Now refiners need to cope with a much stronger rebound in gasoline demand compared with diesel and jet fuel. This requires a reconfiguration of refining programs to be able to shift the yield toward more light distillates and less middle distillates.

• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq

First Abu Dhabi Bank and Egypt Post launch services drive

Updated 30 September 2020

First Abu Dhabi Bank and Egypt Post launch services drive

  • The First Abu Dhabi Bank is the largest bank in the United Arab Emirates

CAIRO: First Abu Dhabi Bank in Egypt has signed a memorandum of understanding with Egypt Post to boost financial inclusion in society and improve customer services.

The strategy is in line with the country’s plan to improve and develop communication channels with citizens and improve access to basic services.

The agreement was signed by Mohamed Abbas Fayed, CEO of First Abu Dhabi Bank, and Sherif Farouk, Chairman of the National Postal Authority, Egypt Post.

A statement issued by First Abu Dhabi Bank said the memorandum of understanding will improve access to post offices, through which foreign remittances, salaries and pensions can be received and disbursed by Egyptians at home and abroad.

The partnership will also help the bank provide notification and collection services to customers, payments through its mobile smart wallet, services for collecting and paying customer dues, exchange and collection services for small and medium enterprises, credit services and contractual postal services.

The statement added that the agreement will build a culture of financial inclusion and awareness, while also reducing the cost of banking operations.

Farouk said that the memorandum will allow the authority to handle remittances of overseas Egyptians through its 4,000 Egypt Post branches across the country.

Fayed said the partnership is part of the bank’s strategy to boost access to customer services, whether individuals or companies.

He added that money transfers from outside Egypt are one of the most important sources of foreign currency for the country. Easing money transfers for Egyptians working abroad with First Abu Dhabi Bank via the National Postal Authority will increase the amount of remittance exchange outlets and transfers.

The First Abu Dhabi Bank is the largest bank in the United Arab Emirates and one of the biggest financial institutions in the world. Its network of branches are in 19 countries around the world, including Egypt.