Oil prices clawed back some losses on Wednesday after falling sharply on Tuesday as fears of a global recession continued to mount.
Brent, the global benchmark for two thirds of the world's oil, was up 1.01 per cent at $103.81 a barrel at 10.20am on Wednesday, after falling by 9.5 per cent on Tuesday, its biggest daily drop since March.
West Texas Intermediate, the gauge that tracks US crude, was trading 0.53 per cent higher at $100.03 a barrel after dropping more than 8 per cent on Tuesday and closing below $100 for the first time since late April.
“The barrel of US crude took a decent dive yesterday, and broke the $100 psychological support as the recession fears weighed on demand prospects and shifted the market attention from too little supply to potentially too little demand,” said Ipek Ozkardeskaya, an analyst at Swissquote.
“Oil is slightly up this morning, near the $100 resistance, but the market rhetoric shifts from buying the dips to selling the tops. The next downside target is set at $93.”
While supply constraints continue to weigh on the oil market, supporting prices, concerns about an imminent recession have left investors on edge.
Recession concerns are growing amid mounting inflationary pressure, subsequent monetary policy tightening by central banks, the impact of the Covid-19 pandemic and geopolitical tension.
However, the price action overnight hints more at panic and forced liquidation, than a structural change in the tight supply-demand situation globally, said Jeffrey Halley, senior market analyst at Oanda.
“Although I acknowledge recession risks in the US, and Covid zero ones in China — the world’s two largest consumers — the futures markets in both Brent crude and WTI remain in heavy backwardation,” he said.
“That says that in the physical market, supplies remained as constrained as ever, and despite the noise seen overnight, oil prices may be in danger of overshooting to the downside.”
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Read: Opec secretary general Mohammad Barkindo dies aged 63
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The risk of a global recession is “rising sharply” amid a combination of “shocks”, including the impact of the Russia-Ukraine conflict on the eurozone, pandemic-related uncertainty in China and the sharp tightening in US financial conditions, the Institute of International Finance said in a report last week.
“The rapid slowdown in the US pushes our global growth forecast from near zero into outright contraction,” the IIF said.
Edward Bell, senior director responsible for market economics at Emirates NBD, said the threat a recession poses to oil demand was being priced forward even if, in reality, “oil demand shows a relative inelasticity to broader economic conditions and is able to better weather economic slowdowns”.
Oil prices have remained extremely volatile in the past few weeks, with concerns over the Russia-Ukraine conflict, Opec+’s decision to stick to its planned output increase in August and supply disruptions in Libya causing prices to remain on the upside.
G7 nations are currently considering a mechanism to cap the price fetched by Russian oil to increase pressure on Moscow in retaliation for its military offensive in Ukraine.
However, Russia can afford to cut crude production by 5 million barrels per day without excessively damaging its economy, JP Morgan analysts wrote in a note to clients last week.
“The most obvious and likely risk with a price cap is that Russia might choose not to participate and, instead, retaliate by reducing exports,” the analysts wrote.
A 3 million bpd cut to daily supplies would push crude prices to $190 while the worst-case scenario of 5 million bpd could lead to prices touching a “stratospheric” $380 a barrel, they said.
Last month, Suhail Al Mazrouei, Minister of Energy and Infrastructure, also said that oil prices could go higher as Chinese demand is expected to recover significantly at a time when efforts by Opec+ to raise production are not yielding results fast enough.
The latest data showed Opec+ was running 2.6 million bpd short of its production target, Mr Al Mazrouei said.
On Thursday, Opec+ agreed to increase production in August by 648,000 bpd, endorsing a plan announced earlier in June.
Looking ahead, oil markets could be in for a bumpy ride in the short term, said Louise Dickson, a senior analyst at Rystad Energy.
“The supply-side pressure, in particular from outages in Libya, Ecuador and Nigeria, is not balancing out an ever-resilient Russia, which has shaken off the taboo in selling oil, with heavy discounts opening up new markets and bringing crude oil production closer and closer to pre-invasion volumes of 10 million bpd,” she said.
“Today’s market moves reflect what oil traders believe the market conditions will be in September, which could be weighed down by not only a seasonal demand slump but weaker consumer demand overall.”
If a recession materialises and inflation continues to push prices for almost everything higher, oil demand is almost certain to fall, bringing down prices with it, Ms Dickson said.
“With Russian oil supplies set to drop as the year progresses and it runs out of western parts to maintain fields, and with the rest of Opec … uninvested in maintaining production capacity, I fear the days of $100 oil will be with us for some time yet,” said Mr Halley.
“That said, Brent crude and WTI are likely moving into a new $95 to $110 barrel range.”
Squad
Ali Kasheif, Salim Rashid, Khalifa Al Hammadi, Khalfan Mubarak, Ali Mabkhout, Omar Abdulrahman, Mohammed Al Attas, Abdullah Ramadan, Zayed Al Ameri (Al Jazira), Mohammed Al Shamsi, Hamdan Al Kamali, Mohammed Barghash, Khalil Al Hammadi (Al Wahda), Khalid Essa, Mohammed Shaker, Ahmed Barman, Bandar Al Ahbabi (Al Ain), Al Hassan Saleh, Majid Suroor (Sharjah) Walid Abbas, Ahmed Khalil (Shabab Al Ahli), Tariq Ahmed, Jasim Yaqoub (Al Nasr), Ali Saleh, Ali Salmeen (Al Wasl), Hassan Al Muharami (Baniyas)
2018 ICC World Twenty20 Asian Western Sub Regional Qualifier
Event info: The tournament in Kuwait this month is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.
UAE’s fixtures: Fri Apr 20, UAE v Qatar; Sat Apr 21, UAE v Saudi Arabia; Mon Apr 23, UAE v Bahrain; Tue Apr 24, UAE v Maldives; Thu Apr 26, UAE v Kuwait
World T20 2020 Qualifying process:
- Sixteen teams will play at the World T20 in two years’ time.
- Australia have already qualified as hosts
- Nine places are available to the top nine ranked sides in the ICC’s T20i standings, not including Australia, on Dec 31, 2018.
- The final six teams will be decided by a 14-team World T20 Qualifier.
World T20 standings: 1 Pakistan; 2 Australia; 3 India; 4 New Zealand; 5 England; 6 South Africa; 7 West Indies; 8 Sri Lanka; 9 Afghanistan; 10 Bangladesh; 11 Scotland; 12 Zimbabwe; 13 UAE; 14 Netherlands; 15 Hong Kong; 16 Papua New Guinea; 17 Oman; 18 Ireland
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
UAE currency: the story behind the money in your pockets
The specs: 2018 Jeep Compass
Price, base: Dh100,000 (estimate)
Engine: 2.4L four-cylinder
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Multitasking pays off for money goals
Tackling money goals one at a time cost financial literacy expert Barbara O'Neill at least $1 million.
That's how much Ms O'Neill, a distinguished professor at Rutgers University in the US, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.
"I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could've had $2 million," Ms O'Neill says.
Too often, financial experts say, people want to attack their money goals one at a time: "As soon as I pay off my credit card debt, then I'll start saving for a home," or, "As soon as I pay off my student loan debt, then I'll start saving for retirement"."
People do not realise how costly the words "as soon as" can be. Paying off debt is a worthy goal, but it should not come at the expense of other goals, particularly saving for retirement. The sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.
"By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic," says Kimberly Zimmerman Rand , an accredited financial counsellor and principal at Dragonfly Financial Solutions in Boston. "If you can start saving today ... you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four."
The years Ramadan fell in May
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Dubai Bling season three
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50-man Royal Rumble
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Navdeep Suri, India's Ambassador to the UAE
There has been a longstanding need from the Indian community to have a religious premises where they can practise their beliefs. Currently there is a very, very small temple in Bur Dubai and the community has outgrown this. So this will be a major temple and open to all denominations and a place should reflect India’s diversity.
It fits so well into the UAE’s own commitment to tolerance and pluralism and coming in the year of tolerance gives it that extra dimension.
What we will see on April 20 is the foundation ceremony and we expect a pretty broad cross section of the Indian community to be present, both from the UAE and abroad. The Hindu group that is building the temple will have their holiest leader attending – and we expect very senior representation from the leadership of the UAE.
When the designs were taken to the leadership, there were two clear options. There was a New Jersey model with a rectangular structure with the temple recessed inside so it was not too visible from the outside and another was the Neasden temple in London with the spires in its classical shape. And they said: look we said we wanted a temple so it should look like a temple. So this should be a classical style temple in all its glory.
It is beautifully located - 30 minutes outside of Abu Dhabi and barely 45 minutes to Dubai so it serves the needs of both communities.
This is going to be the big temple where I expect people to come from across the country at major festivals and occasions.
It is hugely important – it will take a couple of years to complete given the scale. It is going to be remarkable and will contribute something not just to the landscape in terms of visual architecture but also to the ethos. Here will be a real representation of UAE’s pluralism.
MATCH INFO
Tottenham 4 (Alli 51', Kane 50', 77'. Aurier 73')
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Scores
Oman 109-3 in 18.4 overs (Aqib Ilyas 45 not out, Aamir Kaleem 27) beat UAE 108-9 in 20 overs (Usman 27, Mustafa 24, Fayyaz 3-16, Bilal 3-23)
Motori Profile
Date started: March 2020
Co-founder/CEO: Ahmed Eissa
Based: UAE, Abu Dhabi
Sector: Insurance Sector
Size: 50 full-time employees (Inside and Outside UAE)
Stage: Seed stage and seeking Series A round of financing
Investors: Safe City Group
