Dubai, 17 June 2010 – Solid demand growth in China, India and emerging Asian economies, including the Middle East, are the key factors that will shape world oil markets and prices in 2010, experts said today at the Oil ‘&’ Petrochemicals Market Briefing. The event was organised jointly by Dubai Multi Commodities Centre (DMCC), Platts and Thomson Reuters, and held at the Almas Tower in the Jumeirah Lakes Towers (JLT) free zone.
“Growing confidence in a global economic recovery had inspired hopes of rising oil demand in early 2010, but the Eurozone crisis and a strengthening dollar have encouraged continuing volatility in oil prices,” said Malcolm Wall Morris, CEO, DMCC. “We anticipate that long-term demand growth in China, India, emerging Asian economies and the Middle East region will be the key factors determining the shape of oil markets and prices through this year.” Mr. Wall Morris emphasised the various factors that have impacted oil prices, including currently high inventories of oil products, the excess shipping and refining capacity left over from the 2008-2009 demand dip, and China and India’s increasing prominence as oil products exporters.
During his speech, Mr. Wall Morris also highlighted the relevance of Dubai as the central hub in the GCC oil trading community. He added that the rapid growth in downstream projects for refineries and product blending and upgrading will continue to enhance the roles of Jebel Ali and Fujairah as major oil trading and storage hubs.
In addition, Mr. Wall Morris highlighted the increasing prominence of the Almas Tower and larger Jumeirah Lakes Towers free-zone community, where the event was held, for participants in the energy trade. “DMCC’s efforts to establish the JLT free zone as the principal hub for the commodities trade, including energy companies, continue to bear fruit. JLT is now home to more than 200 energy companies and a total of more than 2,250 companies and over 10,000 residents,” he said.
“So far this year”, he added, “DMCC has registered an average of more than 60 new companies per month at JLT, with registrations up more than 40 per cent in the first half of this year compared to the same period in 2009.” Key energy companies registered at JLT include Lukoil, one of Russia’s largest oil companies, SOCAR, Azerbaijan’s national oil company, PTT, Thailand’s National Oil Company, Reliance, India’s largest independent oil refiner, and Topaz Energy and Marine, one of the world’s leading marine services and oil and gas fabrication companies.
In addition to providing the physical infrastructure to support energy companies operations, DMCC was also the driving force behind the creation of the Dubai Gold ‘&’ Commodities exchange which is the region’s largest commodity and currency derivative market. In 2008, DGCX listed the two crude oil global price benchmarks, namely the WTI and Brent contracts, making these contracts directly available to the world’s premier producing region for the first time.
Speaking about the outlook for Asian Oil markets, Kate Dourian, Middle East Editor at Platts, spoke about the likelihood of constrained production in the future. She, however, highlighted the prospects of strong demand due to renewed growth in China and elsewhere in Asia. Ms. Dourian also examined the effects of simmering geo-political tensions, demand-supply projections and the role of Iraq in helping to meet future demand during her address.
While reviewing the Asian Petrochemicals market, Quintella Koh, Managing Editor, Asia Petrochemicals at Platts, spoke about the market outlook for ethylene, propylene and polymers in 2011 with a focus on Asian markets, including China, India, Thailand, Singapore and Vietnam. The rise of swaps and futures in Asian polymer markets and the Asian Aromatics market outlook were also addressed during her presentation.
Yaw Yan Chong, Senior Energy Correspondent, Thomson Reuters, spoke about the outlook for the Asian fuel oil market at the event, with a focus on supply patterns targeting the West and Middle East. The trends in demand focusing on Singapore, China, Vietnam and the Middle East were also reviewed by Yaw Yan Chong.
Platts, a division of The McGraw-Hill Companies (NYSE: MHP), is a leading global provider of energy and commodities information. An independent provider, Platts serves the oil, natural gas, electricity, emissions, nuclear power, coal, petrochemical, shipping, and metals markets from 17 offices worldwide.
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