Emirates NBD Research
 

Find anything about our articles and more.
Enter a query in the search input above, and results will be displayed as you type.

Try typing "Dubai Economics", "Dubai GDP", "GCC Macro"

Emirates NBD
Search
Subscribe
   
  • Home
  • Economics

    Emirates NBD Research provides detailed coverage of 16 GCC and MENA economies, analysing them from a top down macro and strategic perspective as well as by a bottom up sector by sector approach.

    • SUBTOPICS
    • GCC Macro
    • MENA Macro
    • Global Macro
    • Sector Economics
    • Monthly Insights

     

    Latest Article Monthly Insights: January 2021
    Latest Article RBI will remain on hold in February
    Latest Article Regional growth to be driven by improving global backdrop

     

  • Markets

    Emirates NBD Research publishes reports on global forex, rates and commodities, as well as regional fixed income and equity markets.

    • SUBTOPICS
    • Foreign Exchange
    • Fixed Income
    • Commodities
    • Equities
    • Monthly Insights

     

    Latest Article Monthly Insights: January 2021
    Latest Article Gold prices stumble to start 2021
    Latest Article Economic Calendar - 11 January 2021

     

  • Daily
  • PMIs

    Emirates NBD sponsors Purchasing Managers’ Indices for the UAE, Saudi Arabia, Egypt and Dubai. The indices are compiled by IHS Markit, the leading global provider of financial market data.

    • SUBTOPICS
    • UAE PMI
    • Saudi Arabia PMI
    • Egypt PMI
    • Dubai PMI
    • Methodology

     

    Latest Article Dubai PMI moves back into expansion territory in December
    Latest Article Regional PMIs- Saudi PMI rises to year high in December
    Latest Article Regional PMI round-up: A mixed bag in November

     

  • About Us
  • EmiratesNBD.com
  • Subscribe
COMMODITIES > MARKETS

IEA outlook in focus for oil this week

Edward Bell - Senior Director, Market Economics
Published Date: 05 July 2020

Facebook
Linkedin
Twitter
Email
Print

 

Oil prices managed to recoup their strength last week with both Brent and WTI futures rising despite persistent anxieties over the path of Covid-19 cases in the US. Brent settled up 4.3% at USD 42.80/b while WTI managed to close above USD 40/b, advancing 5.6% on a holiday shortened week.

Markets this week will focus on the latest outlooks from the IEA and EIA where demand again will be in focus. The IEA has revised up its demand projections for 2020 in recent reports, albeit still expecting significant year/year declines. On the supply side, OPEC+ has effectively played its strongest card early with the production cut agreement reached in April and over the coming months it will begin to taper the scale of cuts. Meanwhile production in the US and other market-oriented producers continues to reel from low prices and weak solvency conditions in many companies. That leaves demand squarely in focus to determine the oil outlook in the rest of the year. With the global number of Covid-19 cases at over 11m—and the US nearing to 3m—we still have strong doubts about how healthy demand will perform over the next six months and be able to chew through the enormous build-up in inventories.

Oil curves remain in contango with the tentative flips to backwardation at the front-end of the Brent curve appearing anomalous. Time spreads at the front end closed in a contango of USD 0.11/b for both the Brent and WTI markets while longer-dated (1-12 month) Brent spreads actually widened. Time spreads in the Dubai physical market also slipped last week with 1-3 month spreads closing in a backwardation of USD 0.21/b compared with almost USD 0.6/b a week earlier. As production from the GCC region begins to increase over the next few months—in line with the OPEC+ agreement—and demand remains prone to downside risks the potential for the Dubai curve to sink back into contango remains high, particularly as the backwardation is still very tentative.

Even as economies show signs of recovery—PMIs across developed and emerging markets all pointed to stronger levels of activity in June—demand conditions still appear soft. Refining margins have moved off their absolute troughs but still remain substantially depressed y/y. A notional 321 crack for Singapore refinery running Dubai crude closed the week at USD 3.75/b, a substantial improvement from flat one month ago but still almost 70% down on year ago levels.

Refining margins face long recovery

Source: Bloomberg, Emirates NBD Research.

Click here to Download Full article

Written By:
Edward Bell, Senior Director, Market Economics

RELATED ARTICLES

Gold prices stumble to start 2021
11.01.2021

OPEC diplomacy key to stable oil markets
05.01.2021

OPEC and allies reach agreement for 2021
06.12.2020

Joe Biden wins presidential election
08.11.2020

Energy markets focus on US presidential election
25.10.2020

See all

LATEST ARTICLES

Regional growth to be driven by improving global backdrop
13.01.2021

RBI will remain on hold in February
17.01.2021

Caveats remain to new year optimism
12.01.2021

See all
 

 Subscribe to our newsletter


Never miss out what is going on in UAE Economics

KEEP READING MORE

Monthly Insights: January 2021

A round-up of our key research insights and forecasts this month.

ECONOMICS, MARKETS - 17.01.2021

Regional growth to be driven by improving global backdrop

We expect GCC growth to average 2.3 percent in 2021 following an estimated 5 percent contraction in 2020.

ECONOMICS, GCC MACRO - 13.01.2021

MENA Quarterly Q4 2020

Our quarterly report on MENA economies

ECONOMICS, MENA MACRO - 13.10.2020

 

OPEC and allies reach agreement for 2021

The oil market should be able to absorb modest production increases

MARKETS, COMMODITIES - 06.12.2020

Green bond market has room to expand in MENA

Renewables projects across the region could attract new pool of investors.

MARKETS, FIXED INCOME - 21.10.2020

Regional PMI round-up: A mixed bag in November

UAE PMI unchanged at 49.5 in November.

ECONOMICS, PMIS - 08.12.2020

Caveats remain to new year optimism

2021 has started the year on a positive footing as risk assets have gained momentum on the back of positive developments. Nevertheless, there remain caveats regarding the upside drivers.

ECONOMICS, GLOBAL MACRO - 12.01.2021

  • Economics
  • Markets
  • PMIs
  • About Us
  • Subscribe to our publications
  • Economics
  • GCC Macro
  • MENA Macro
  • Global Macro
  • Sector Economics
  • Markets
  • Foreign Exchange
  • Fixed Income
  • Commodities
  • Equities
  • PMIs
  • UAE PMI
  • Saudi Arabia PMI
  • Egypt PMI
  • Dubai Economy Tracker
  • Methodology
  • About Us
  • Subscribe to our publications

 


Terms and Conditions
Copyright © 2021 Emirates NBD Bank PJSC. All Rights Reserved