GulfBase Live Support
QNB has revised up its forecasts for average annual oil prices to $72/b for 2018 from $69/b and to $69/b in 2019 from $66/b. Both demand and supply factors, however, suggest a tilt towards lower prices in 2019 as global demand cools and infrastructure constraints on US shale supply fade.
On the demand front, QNB analysts said, global growth is set to soften. The euro-zone, Japan and China have all shown signs of slower growth in recent months, while the US Federal Reserve looks set to continue its steady drip-feed of interest-rate rises until US GDP growth, currently booming at a 4 percent annualised pace, pulls back to a more sustainable 2 percent annualised clip.
The mounting risk of a global trade war, with an escalating conflict between US and China in particular looking increasingly likely, adds to downside risks. Investment intentions in particular are likely to suffer from the increased uncertainty.
In turn, risks to the IEA’s forecast for a second successive year of oil demand growth of 1.4m b/d looks tilted to the downside. On the supply side, US shale output should re-accelerate with the increase in pipeline capacity from the Permian Basin in 2019Q3. US crude exports, which were 1.6m b/d in 2017 and are currently being capped around the 2m b/d by infrastructure constraints could reach 3 m b/d by end-2019. Opec’s output deal is also set to expire at the end of 2018 and, while some extension of production curbs is likely, the clear risk is that Opec supply increases in 2019.
In 2017, Brent crude prices averaged $55/b, up from $44/b in 2016. And the oil price’s recovery has continued in 2018. A number of factors have pushed oil prices up more than expected this year. First, with global GDP growth on course for its strongest year since 2011, oil demand growth has been robust. The International Energy Agency (IEA) estimates global demand to increase by 1.5 million barrels per day (m b/d) in 2018.
On the supply side, three factors have been key so far in 2018. The first factor is continued steep falls in Venezuelan output, down a further 320m b/d in the first six months of the year, as the country’s economic crisis deepens. Second, the re-introduction of US sanctions on Iran, threatens to tighten supply further from November 2018 by removing up to 900m b/d of global supply. The spot oil price moved up on the news, reflecting the risk of a further large supply shock later in the year. However, the extent to which key importers such as China and India will comply with the sanctions and so fully cut off Iranian imports is unclear.
Third, infrastructure bottlenecks in the key US shale oil producing of the Permian Basin region in west Texas threatens to restrain US supply growth. Pipeline capacity from the Permian is already close to full by most accounts with new capacity not expected to properly arrive until third quarter of 2019. A jump in ‘drilled but uncompleted wells’ in the Permian (a key gauge of delayed output for shale producers) points to slowing supply growth in the short term as producers delay output until takeaway capacity is boosted.
With Qatari economy proving resilient to the more than one-year-long blockade, the country now regards the blockade as a ‘new normal’ for the region and is confident that the strong economic performa
QNB Group, the largest financial institution in the Middle East and Africa (MEA), recorded a net profit of QR10.8bn ($3.0bn) for the nine months ended September 2018, up by 6 percent compared to same
Qatar National Bank’s US dollar liquidity is “excellent” and the bank has no funding need at the moment, the bank’s chief executive told Reuters.
“We’re not in need of funding right now bu
State-owned Abu Dhabi National Oil Company began production and loading of crude from its offshore Umm Lulu and Sarb fields with commercial shipment to start next month, according to a company spokes
Commercial Bank of Dubai (CBD) on Wednesday reported a net profit of Dh843 million for the first nine months of 2018, up 26.8 per cent compared to the same period last year.
For the third q
National Bank of Bahrain (NBB) said it delivered strong financial results and continued growth for the first nine months of 2018 marked by an 11.3 per cent rise in net profit, which reached 55 millio
Doha Bank recorded a net profit of QR737m for the third quarter of 2018 as against QR1.04bn for the same period last year after taking significant loan loss provision in relation to the bank’s overse
United Development Company (UDC), a leading Qatari shareholding company and master developer of The Pearl-Qatar, reported a net profit of QR416m on revenues of QR1.29bn for the nine months ended Sept