Oil prices edged higher on Wednesday after plummeting overnight due to demand concerns and fears of a global recession as the International Monetary Fund downgraded the growth rate of the world's largest economy.
Brent, the benchmark for two thirds of the world's oil, fell about 7 per cent to below $100 a barrel but rebounded on Wednesday and was 0.89 per cent higher at $100.7 a barrel at 1.28pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 0.88 per cent at $96.68 a barrel after plunging 8 per cent.
Crude prices slumped as Opec said in its monthly outlook report it expects oil demand to exceed supply by about 1 million barrels a day in 2023.
"Traders are concerned about the sharp increase in the Covid-19 cases in China, and the worry is that this could lead to a lockdown," said Naeem Aslam, chief market analyst at Avatrade.
"In addition to this, traders are worried about economic slowdown around the globe, and higher inflation readings are increasing the chances for a strong possibility of a recession taking place despite a robust job market."
World oil demand is expected to exceed pre-pandemic levels in 2022, but the Russia-Ukraine war, pandemic-related developments and inflationary pressures are posing headwinds.
Higher commodity prices and supply chain disruptions are exacerbating inflation as well as increasing economic uncertainty and growing fears of a global recession.
On Tuesday, the IMF downgraded its US economic growth forecast to 2.3 per cent this year, from an earlier 2.9 per cent projection last month and cut the country's 2023 outlook for 2023 to 1 per cent compared with previous 1.7 per cent estimate. The fund warned that the surge in inflation, which reached 9.1 per cent in June, posed 'systemic risks' to the US and global economy.
The World Bank and the IMF lowered their growth forecasts for the global economy this year as a result of Russia’s military offensive in Ukraine and the Covid-19 pandemic.
The World Bank forecasts the global economy will grow 2.9 per cent this year lower than the 3.2 per cent projection it issued in April, while the International Monetary Fund expects it to grow 3.6 per cent, down from its previous 4.4 per cent estimate in January.
"The oil market looks stuck ... in a state of limbo, trying to determine whether it is indeed about to loosen substantially as a pending recession will ravage demand or whether, as cautioned by Fatih Birol, the executive director of the IEA, the world will move into an unprecedented 'major energy crisis in terms of its depth and its complexity'," said Edward Bell, senior director of market economics at Emirates NBD.
Growing uncertainties about the global economic outlook, the Russia-Ukraine conflict and underinvestment in the energy industry in a tight market have all contributed to oil price volatility.
"The disconnect between the real world, and the speculative world, is growing wider and although I don’t rule out more downside surprises, I believe the recent selloff could be getting a little overdone," said Jeffrey Halley, senior market analyst at Oanda.
"Brent crude has had these ranges up and down in three of the past six trading sessions, showing just how skittish the short-term trading market is ... more downsides could occur, just as easily as a sharp rally could."
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
UAE currency: the story behind the money in your pockets
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.
Tori Amos
Native Invader
Decca
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Fixtures
Sunday, December 8, Sharjah Cricket Stadium – UAE v USA
Monday, December 9, Sharjah Cricket Stadium – USA v Scotland
Wednesday, December 11, Sharjah Cricket Stadium – UAE v Scotland
Thursday, December 12, ICC Academy, Dubai – UAE v USA
Saturday, December 14, ICC Academy, Dubai – USA v Scotland
Sunday, December 15, ICC Academy, Dubai – UAE v Scotland
Note: All matches start at 10am, admission is free
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KILLING OF QASSEM SULEIMANI
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: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
UAE’s revised Cricket World Cup League Two schedule
August, 2021: Host - United States; Teams - UAE, United States and Scotland
Between September and November, 2021 (dates TBC): Host - Namibia; Teams - Namibia, Oman, UAE
December, 2021: Host - UAE; Teams - UAE, Namibia, Oman
February, 2022: Hosts - Nepal; Teams - UAE, Nepal, PNG
June, 2022: Hosts - Scotland; Teams - UAE, United States, Scotland
September, 2022: Hosts - PNG; Teams - UAE, PNG, Nepal
February, 2023: Hosts - UAE; Teams - UAE, PNG, Nepal
MATCH INFO
Chelsea 3 (Abraham 11', 17', 74')
Luton Town 1 (Clark 30')
Man of the match Abraham (Chelsea)
Killing of Qassem Suleimani
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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.
In numbers
- Number of children under five will fall from 681 million in 2017 to 401m in 2100
- Over-80s will rise from 141m in 2017 to 866m in 2100
- Nigeria will become the world’s second most populous country with 791m by 2100, behind India
- China will fall dramatically from a peak of 2.4 billion in 2024 to 732 million by 2100
- an average of 2.1 children per woman is required to sustain population growth
Killing of Qassem Suleimani
Meydan race card
6pm Dubai Trophy – Conditions(TB) $100,000 (Turf) 1,200m
6.35Dubai Trophy – Conditions(TB) $100,000 (Turf) 1,200m
1,800m
7.10pm Jumeirah Derby Trial – Conditions (TB) $60,000 (T)
1,800m ,400m
7.45pm Al Rashidiya – Group 2 (TB) $180,000 (T) 1,800m
8.20pm Al Fahidi Fort – Group 2 (TB) $180,000 (T) 1,400m
8.55pm Dubawi Stakes – Group 3 (TB) $150,000 (D) 1,200m
9.30pm Aliyah – Rated Conditions (TB) $80,000 (D) 2,000m
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
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.
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MATCH INFO
What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany
Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)
