Brent, the international oil benchmark, fell to its lowest level in more than two decades and then regained ground, a day after its US counterpart collapsed into negative territory.
Brent, under which two-thirds of the world's oil is traded, recovered from its decline from yesterday rising 12.36 per cent to trade at $21.72 per barrel at 5.52pm UAE time, however, it remains less volatile than West Texas Intermediate, the US benchmark.
WTI, which slipped into negative territory for the first time earlier this week, recovered slightly. Its June contract was up 24.72 per cent, trading at $14.43 per barrel on Wednesday. Traders fear the June contract may follow the previous monthly contract in slipping into negative pricing after it rapidly lost value yesterday.
WTI traded in positive single digits late Tuesday after slipping back into the negative during early trading. The May contract settled at -$37.61 per barrel on Monday as limited storage options and a painful demand crunch wrought by the coronavirus pandemic hurt prices.
The outbreak of the coronavirus pandemic has battered demand for crude and led to a surfeit of oil inventories as a result of lockdowns and travel restrictions across the world. With more than 2.5 million people infected globally and most of the world in quarantine, demand for crude faded and storage capacity peaked.
Brent, which had held steady above $20 per barrel, while its US counterpart sank below zero, began to decelerate yesterday.
"A similar fate seems unlikely for Brent," said Jasper Lawler, head of research at London Capital Group.
"The storage options for US crude are a lot more limited. Still, the near term pressure on oil prices doesn’t look like lifting yet," he added.
WTI is settled by physical delivery unlike Brent, which relies on cash settlement. Brent is also more mobile than WTI because it is transported by sea, while US oil is produced in landlocked areas and its physical delivery point, in the inland town of Cushing, Oklahoma, is stretched to capacity in terms of storage.
With producers likely to shut-in production in the US as they run of storage options, Wood Mackenzie expects a drop in global supply by the third quarter of 2020, which is set to stabilise the markets.
Opec+ is also cutting production by 9.7 million barrels per day in May and June with tapered cuts in place until 2022.
"In our estimation, oil demand in April is also facing the greatest impact from coronavirus containment measures, as several countries begin easing these steps in May," said Ann-Louise Hittle, vice president, macro oils at Wood Mackenzie.
Demand is likely to decline by 15m and 18m bpd in April, with slightly less of a decline in May, according to the consultancy.
"The second half of the year should see a slow unwinding of the demand destruction Covid-19 wreaked on the market," said Ms Hittle.
Investment bank Julius Baer meanwhile stuck to a more neutral view for oil prices, dismissing WTI's meltdown as nothing more than a "glitch" exacerbated by exchange trade fund (ETF) activity and low storage capacity.
The bank said its preferred benchmark remained Brent, thanks to the stability provided by its underlying seaborne trading.
"The flows of money into and out of the oil futures market causes deviations from fundamentally justified levels, especially if the underlying motivation is not purely fundamental but excessive optimism or excessive pessimism," said Norbert Rücker, head of economics, and next-generation research at the bank.
Meanwhile, the International Energy Agency, which estimated a demand collapse of 29m bpd for April - the lowest since 1995 - called on producers to do more.
"Production cuts need to be made as soon as possible without waiting," its executive director Fatih Birol told Bloomberg TV on Wednesday.
"If no further measures are fully put in place, we may see further downward pressure," he said, observing that the oil markets were in for a difficult phase "until June".
Some media have reported a number of Opec+ members may have convened to implement additional cuts in order to ensure that their economies, which depend overwhelmingly on oil revenues are protected from the price slump.
With delivery commitments for April already in place, it is unlikely that some can roll back their earlier pledges.
Gulf Opec+ producers have pledged to cut another 2.2m bpd in addition to the record 9.7m bpd drawback.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
UFC Fight Night 2
1am – Early prelims
2am – Prelims
4am-7am – Main card
7:30am-9am – press cons
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
MATCH INFO
What: Brazil v South Korea
When: Tonight, 5.30pm
Where: Mohamed bin Zayed Stadium, Abu Dhabi
Tickets: www.ticketmaster.ae
The biog
Name: Abeer Al Bah
Born: 1972
Husband: Emirati lawyer Salem Bin Sahoo, since 1992
Children: Soud, born 1993, lawyer; Obaid, born 1994, deceased; four other boys and one girl, three months old
Education: BA in Elementary Education, worked for five years in a Dubai school
The%20specs
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The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
Brief scoreline:
Al Wahda 2
Al Menhali 27', Tagliabue 79'
Al Nassr 3
Hamdallah 41', Giuliano 45 1', 62'
UAE currency: the story behind the money in your pockets
Overview
What: The Arab Women’s Sports Tournament is a biennial multisport event exclusively for Arab women athletes.
When: From Sunday, February 2, to Wednesday, February 12.
Where: At 13 different centres across Sharjah.
Disciplines: Athletics, archery, basketball, fencing, Karate, table tennis, shooting (rifle and pistol), show jumping and volleyball.
Participating countries: Algeria, Bahrain, Comoros, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Saudi Arabia, Sudan, Syria, Tunisia, Qatar and UAE.
Essentials
The flights
Emirates and Etihad fly direct from the UAE to Geneva from Dh2,845 return, including taxes. The flight takes 6 hours.
The package
Clinique La Prairie offers a variety of programmes. A six-night Master Detox costs from 14,900 Swiss francs (Dh57,655), including all food, accommodation and a set schedule of medical consultations and spa treatments.
Juvenile arthritis
Along with doctors, families and teachers can help pick up cases of arthritis in children.
Most types of childhood arthritis are known as juvenile idiopathic arthritis. JIA causes pain and inflammation in one or more joints for at least six weeks.
Dr Betina Rogalski said "The younger the child the more difficult it into pick up the symptoms. If the child is small, it may just be a bit grumpy or pull its leg a way or not feel like walking,” she said.
According to The National Institute of Arthritis and Musculoskeletal and Skin Diseases in US, the most common symptoms of juvenile arthritis are joint swelling, pain, and stiffness that doesn’t go away. Usually it affects the knees, hands, and feet, and it’s worse in the morning or after a nap.
Limping in the morning because of a stiff knee, excessive clumsiness, having a high fever and skin rash are other symptoms. Children may also have swelling in lymph nodes in the neck and other parts of the body.
Arthritis in children can cause eye inflammation and growth problems and can cause bones and joints to grow unevenly.
In the UK, about 15,000 children and young people are affected by arthritis.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Killing of Qassem Suleimani
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Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The five pillars of Islam
