Oil prices fluctuated on Thursday after hitting their lowest since February on fears of weak demand as economic growth continues to slow even as the Opec+ group of producers agreed to a much smaller increase in supply from September.
Brent, the global benchmark for two thirds of the world’s oil, was trading 3.12 per cent lower at $93.76 a barrel at 9:13pm UAE time.
West Texas Intermediate, the gauge that tracks US crude, was down 2.86 per cent at $88.07 a barrel.
Both benchmarks fell sharply on Wednesday to close at their lowest levels since February. Brent settled 3.7 per cent lower at $96.78 a barrel while WTI fell by about 4 per cent to $90.66 a barrel.
“The oil market will remain tight over the short-term and that means we should still have limited downside here,” said Edward Moya, a senior market analyst at Oanda.
“Crude prices should find strong support around the $90 level and, eventually, will rebound towards the $100 barrel level even as the global economic slowdown accelerates.”
On Wednesday, Opec+ agreed to boost its September output by a much smaller 100,000 barrels per day, as it recalibrated production amid continued price volatility.
“The severely limited availability of excess capacity necessitates utilising it with great caution in response to severe supply disruptions,” the group said.
However, the smaller increase in output will not have a major impact on the market, said Edward Bell, senior director of market economics at Emirates NBD.
Opec+ is “essentially adding nothing to change the narrative around oil markets as the hike will be barely noticeable and may end up as a rounding error in some countries’ production”, he said.
“Oil prices initially rallied on the news but given that the situation around oil remains the same — recession and geopolitical risks to the downside, supply constraints for the upside — prices turned lower sharply.”
Data from the US Energy Information Administration (EIA) showing a drop in fuel demand and a rise in oil stocks also pushed prices down on Wednesday.
The latest figures showed US crude oil stocks for the week ending July 29, excluding the Strategic Petroleum Reserve, increased by 4.5 million barrels from a week earlier.
The weekly EIA crude oil inventory was “very bearish” and, together with plunging fuel demand, sent “oil prices sharply lower”, Mr Moya said.
“The demand outlook might be much worse than everyone was thinking as US gasoline demand fell 7.1 per cent, despite lower prices and this still being peak summer vacationing time,” he said.
Growing uncertainty about the global economic outlook amid high inflation and the Russia-Ukraine conflict have stoked demand concerns in recent months.
However, despite such concerns, oil demand is expected to hold up in the third quarter of this year at an average of 100.3 million bpd, from 98.7 million bpd in the second quarter, according to Japanese lender MUFG.
In its outlook report last month, Opec forecast that global oil demand would also continue to grow next year, with Opec producers required to pump close to a million barrels more a day in 2023.
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Monster Hunter: World
Capcom
PlayStation 4, Xbox One
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Read more from Aya Iskandarani
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
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Manchester United v Club America
When: Thursday, 9pm Arizona time (Friday UAE, 8am)
Plan to boost public schools
A major shake-up of government-run schools was rolled out across the country in 2017. Known as the Emirati School Model, it placed more emphasis on maths and science while also adding practical skills to the curriculum.
It was accompanied by the promise of a Dh5 billion investment, over six years, to pay for state-of-the-art infrastructure improvements.
Aspects of the school model will be extended to international private schools, the education minister has previously suggested.
Recent developments have also included the introduction of moral education - which public and private schools both must teach - along with reform of the exams system and tougher teacher licensing requirements.
ACL Elite (West) - fixtures
Monday, Sept 30
Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)
Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)
Series result
1st ODI Zimbabwe won by 6 wickets
2nd ODI Sri Lanka won by 7 wickets
3rd ODI Sri Lanka won by 8 wickets
4th ODI Zimbabwe won by 4 wickets
5th ODI Zimbabwe won by 3 wickets
The biog
Age: 19
Profession: medical student at UAE university
Favourite book: The Ocean at The End of The Lane by Neil Gaiman
Role model: Parents, followed by Fazza (Shiekh Hamdan bin Mohammed)
Favourite poet: Edger Allen Poe
UAE currency: the story behind the money in your pockets
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Gulf rugby
Who’s won what so far in 2018/19
Western Clubs Champions League: Bahrain
Dubai Rugby Sevens: Dubai Hurricanes
West Asia Premiership: Bahrain
What’s left
UAE Conference
March 22, play-offs:
Dubai Hurricanes II v Al Ain Amblers, Jebel Ali Dragons II v Dubai Tigers
March 29, final
UAE Premiership
March 22, play-offs:
Dubai Exiles v Jebel Ali Dragons, Abu Dhabi Harlequins v Dubai Hurricanes
March 29, final
