WEEKLY ENERGY RECAP: Oil prices extend weekly gains amid signs of improving global demand

WEEKLY ENERGY RECAP: Oil prices extend weekly gains amid signs of improving global demand
A general view of Abadan oil refinery in southwest Iran, is pictured from Iraqi side of Shatt al-Arab in Al-Faw south of Basra, Iraq September 21, 2019. (REUTERS)
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Updated 15 February 2021

WEEKLY ENERGY RECAP: Oil prices extend weekly gains amid signs of improving global demand

WEEKLY ENERGY RECAP: Oil prices extend weekly gains amid signs of improving global demand
  • The IEA forecasts global oil demand to rise by 5.4 million barrels per day (bpd) to 96.4 million bpd in 2021

Despite mixed signals from the International Energy Agency (IEA) oil monthly report, prices extended weekly gains and rose to the highest level in more than 13 months on signs that the global market is tightening and demand is improving.
On the week’s closing, Brent crude price breached the $60 mark and closed the week higher at $62.43 a barrel. The West Texas Intermediate (WTI) crude price also extended its rally and closed the week higher at $59.47 a barrel.
Although the IEA warned of a fragile outlook for oil demand recovery during the first half of 2021 and lowered its demand outlook in light of coronavirus challenges, it expects a rapid drawdown of global inventories in the second half.
This was a bit confusing to the market as the IEA reported that the latest data for OECD oil stocks (December 2020) fell for the fifth consecutive month, recording a huge monthly decline of 44.6 million barrels to 138.3 million barrels above the five-year average. OECD inventories have been steadily declining since the third quarter last year.
Though the IEA gave bearish oil demand recovery signals for the first half of the year that weighed heavily on the near-term recovery in global oil demand, prices remained steady with an upward momentum with upcoming market tightness.
The IEA forecasts global oil demand to rise by 5.4 million barrels per day (bpd) to 96.4 million bpd in 2021, recovering by about 60 percent of the demand lost in 2020 amid the pandemic that has been incentivized by positive economic outlook for the second half of 2021, along from OPEC+ output cuts that showed great outcomes in the drawdown of surplus oil inventories.
The US Energy Information Administration (EIA) expects the Brent crude price to average $56 per barrel in the first quarter of 2021 and $52 per barrel over the remainder of the year. EIA expects lower oil prices later in 2021 as a result of rising supply.
The EIA estimates US crude oil production to average 11 million bpd in 2021, down from 11.3 million bpd in 2020 and 12.2 million bpd in 2019, and will rise to 11.5 million bpd in 2022.
Both international benchmarks Brent and WTI futures curve are in backwardation, which helps the drawdowns from global inventories. The IEA reported that Brent 12-month backwardation breached $4/bbl (barrel of oil), returning prices to pre-pandemic levels as the futures markets drove prices higher, reflecting a favorable overall economic outlook for the 2021 second half.
The latest figures from the Commodity Futures Trading Commission shows that crude futures “long positions” on the New York Mercantile Exchange at 695,209 contracts, increased by +18,950 contracts from the previous week (1,000 barrels for each contract).

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


Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses
Updated 30 sec ago

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses
  • The deal will help the UAE lender to reduce any risks that may be associated with credit facilities

DUBAI: UAE export credit company, Etihad Credit Insurance (ECI), has signed an agreement with Emirates NBD to improve liquidity of UAE exporters by easing their access to credit facilities.
The deal will help the UAE lender to reduce any risks that may be associated with credit facilities, so businesses can pursue export and expansion opportunities, according to a joint statement.
More than 80 per cent of world trade relies on trade finance, ECI’s chief Massimo Falcioni said, and the agreement will allow Emirates NBD to offer innovative financial solutions to their clients.
Governments in the Gulf have been investing in strengthening local businesses as a strategy to recover from the COVID-19 pandemic, and to gradually veer away from oil-dependence.

 

 


Italian fashion brand Diesel launches online shopping platform in KSA, UAE

Italian fashion brand Diesel launches online shopping platform in KSA, UAE
Updated 42 min 15 sec ago

Italian fashion brand Diesel launches online shopping platform in KSA, UAE

Italian fashion brand Diesel launches online shopping platform in KSA, UAE
  • The website will feature new collections of the fashion line, as well as exclusive deals for online shoppers

DUBAI: Italian fashion retailer Diesel has launched its own e-commerce platform for customers in Saudi Arabia and the UAE, the company said on Sunday.
The website will feature new collections of the fashion line, as well as exclusive deals for online shoppers. It will also offer free shipping for customers in both countries.
Diesel has been in the market for four decades and is known for its denim and casual fashion offerings.
The COVID-19 pandemic has created huge demand for online shopping in the Gulf, with many retailers accelerating their digital efforts to take advantage of it


Kuwaiti coffee delivery app raises $10m in new funding

Kuwaiti coffee delivery app raises $10m in new funding
Updated 40 min 19 sec ago

Kuwaiti coffee delivery app raises $10m in new funding

Kuwaiti coffee delivery app raises $10m in new funding
  • The funding was provided by Kuwaiti listed investment house Al Imtiaz Investment Group
  • COFE was conceived in 2017 by Kuwait-based founder Ali Al-Ebrahim, developed in Silicon Valley and launched in 2018

DUBAI: Kuwaiti coffee delivery app COFE has raised $10 million in new funding, which it aims to use to scale up its operations in Kuwait, Saudi Arabia, the UAE and the UK and to expand into Egypt and Turkey.
The funding was provided by Kuwaiti listed investment house Al Imtiaz Investment Group. COFE was conceived in 2017 by Kuwait-based founder Ali Al-Ebrahim, developed in Silicon Valley and launched in 2018.
“From its early days, COFE has shown tremendous potential as a unique offering that caters to discerning coffee connoisseurs and their consumption habits, while helping to grow and transform revenue streams for vendors. Our partners have recognized this and are confident in our ability to serve existing customers and vendors, while expanding into new markets,” Al-Ebrahim said in a press statement.
Zev Siegl, a co-founder of international coffee chain Starbucks, is also an adviser to COFE. “I am happy to collaborate with the COFE App team and proud of the success and development they’ve achieved,” Siegl told the Mubasher website in April 2019. “During my stay in Kuwait, I visited more than 20 coffee shops and I was impressed by the high level of service, innovation and the high demand on coffee shops which ensure that the COFE app market will keep on growing and will reach the international market very soon.”


Israel and Greece sign record defense deal

Israel and Greece sign record defense deal
Updated 18 April 2021

Israel and Greece sign record defense deal

Israel and Greece sign record defense deal
  • The agreement includes a $1.65 billion contract for the establishment and operation of a training center for the Hellenic Air Force

JERUSALEM: Israel and Greece have signed their biggest ever defense procurement deal, which Israel said on Sunday would strengthen political and economic ties between the countries.
The agreement includes a $1.65 billion contract for the establishment and operation of a training center for the Hellenic Air Force by Israeli defense contractor Elbit Systems over a 22-year period, Israel’s defense ministry said.
The training center will be modeled on Israel’s own flight academy and will be equipped with 10 M-346 training aircraft produced by Italian company Leonardo, the ministry said.
Elbit will supply kits to upgrade and operate Greece’s T-6 aircraft and also provide training, simulators and logistical support.
“I am certain that (this program) will upgrade the capabilities and strengthen the economies of Israel and Greece and thus the partnership between our two countries will deepen on the defense, economic and political levels,” said Israeli defense minister Benny Gantz.
The announcement follows a meeting in Cyprus on Friday between the UAE, Greek, Cypriot and Israeli foreign ministers, who agreed to deepen cooperation between their countries.


Dubai Islamic Bank sees no impact from NMC law suit

Dubai Islamic Bank sees no impact from NMC law suit
Updated 18 April 2021

Dubai Islamic Bank sees no impact from NMC law suit

Dubai Islamic Bank sees no impact from NMC law suit
  • Last week it emerged that NMC was suing a Dubai bank in the Abu Dhabi courts in a dispute that could complicate the company’s multi-billion-dollar debt restructuring

DUBAI: Dubai Islamic Bank (DIB) said on Sunday it does not expect any “negative impact” from a case against it brought by the administrators of hospital operator NMC Group.
It made the disclosure in a letter to the Dubai Financial Market posted on the website of the bourse.
Last week it emerged that NMC was suing a Dubai bank in the Abu Dhabi courts in a dispute that could complicate the company’s multi-billion-dollar debt restructuring and potentially delay payouts to creditors, Reuters reported.
It was the latest twist in the tale of the UAE ‘s biggest hospital group which last year disclosed more than $4 billion in hidden debt. Its UAE operations were placed into administration and creditor claims are understood to now exceed $6.4 billion.
“It is a matter of public record that an application has been filed by the administrators of the NMC Group in the Abu Dhabi Global Markets Court, in which Dubai Islamic Bank and 12 insurance companies and third party service providers are respondents,” DIB CEO Hassan Al-Serkal said in the statement to the Dubai financial Market, where it’s shares are listed. “DIB does not anticipate any material negative impact arising from this application. As this is an ongoing legal matter, we can comment further at this time.”