Oil prices eased slightly early on Wednesday amid a de-escalation of geopolitical tension in eastern Europe but analysts said the decline is “short-lived”, with the bullish outlook expected to remain.
Brent, the global benchmark for two thirds of the world's oil, was down 0.23 per cent at $93.07 a barrel at 7.46am UAE time. It recovered to $93.43 a barrel by 9.58am.
West Texas Intermediate, the gauge that tracks US crude, was trading 0.08 per cent lower at $92 a barrel at 7.46am and rose to $92.23 a barrel by 9.58am.
“In a classic knee-jerk reaction, oil markets are losing ground on news of a Russian de-escalation on the Ukrainian border,” Rystad Energy’s senior vice president Claudio Galimberti said.
“Russia’s claim of partially withdrawing troops from the Ukrainian border has slightly loosened the stranglehold the tensions have over the market but the threat to supply persists, especially considering Russia will continue large-scale military manoeuvres in the region.”
On Tuesday, German Chancellor Olaf Scholz met President Vladimir Putin in Moscow while western allies reacted cautiously to a Russian statement that it was beginning to pull back troops.
US President Joe Biden said that a Russian attack on Ukraine remains “distinctly possible”.
Oil prices have rallied to their highest since 2014 on tighter supply, higher demand and production constraints. Some analysts expect prices to reach and possibly surpass $100 a barrel this year.
“The Ukraine situation still remains tense and oil prices could swing $10 in either direction. The oil market remains very tight and, regardless of the Ukraine situation, crude prices are still on course for a move towards $100 a barrel,” said Edward Moya, a senior market analyst at Oanda.
The current supply and demand fundamentals are “fully compatible” with Brent pricing close to $100 a barrel, and any supply disruption or demand surprise could push the benchmark past that landmark threshold, according to Oslo-based Rystad Energy.
JP Morgan, the largest lender in the US, predicts Brent will “overshoot” to $125 a barrel this year and $150 in 2023 due to underinvestment in the oil and gas sector. Goldman Sachs expects oil to rally to $100 a barrel by the third quarter of this year.
The International Energy Agency expects oil demand to rise by 3.2 million barrels per day this year to 100.6 million bpd as global economies recover from the pandemic.
OECD commercial crude and liquid stocks have declined over the past 18 months and now sit at their lowest levels since November 2014.
Brent backwardation, where prices for immediate delivery are higher than those for future supply, is also at the highest level in a decade, signalling a potential additional tightening in oil supply soon.
“The supply side of the equation remains highly uncertain, with Opec+ inability and unwillingness to close the current gap with demand and some of the Russian crude exports being potentially at risk in case of a conflict with Ukraine,” Mr Galimberti said.
“US light tight oil production continues to increase but the pace is insufficient to compensate for Opec and Russian shortfalls.”
The 23-member bloc’s “prolonged underperformance” has effectively taken 300 million barrels, or 800,000 barrels per day, off the market since the start of 2021, the IEA said last week.
Opec+ plans to add 400,000 bpd to the market from March.
“Russian de-escalation notwithstanding, the fundamental signals for the global oil market remain overwhelmingly bullish,” Mr Galimberti said.
TOURNAMENT INFO
Opening fixtures:
Friday, Oct 5
8pm: Kabul Zwanan v Paktia Panthers
Saturday, Oct 6
4pm: Nangarhar Leopards v Kandahar Knights
8pm: Kabul Zwanan v Balkh Legends
Tickets
Tickets can be bought online at https://www.q-tickets.com/apl/eventlist and at the ticket office at the stadium.
TV info
The tournament will be broadcast live in the UAE on OSN Sports.
Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
Available: Now
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
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The specs
Engine: 2.0-litre 4-cyl
Power: 153hp at 6,000rpm
Torque: 200Nm at 4,000rpm
Transmission: 6-speed auto
Price: Dh99,000
On sale: now
UAE currency: the story behind the money in your pockets
Ponti
Sharlene Teo, Pan Macmillan
Miss Granny
Director: Joyce Bernal
Starring: Sarah Geronimo, James Reid, Xian Lim, Nova Villa
3/5
(Tagalog with Eng/Ar subtitles)
Hydrogen: Market potential
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The Two Popes
Director: Fernando Meirelles
Stars: Anthony Hopkins, Jonathan Pryce
Four out of five stars
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
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