Oil prices fluctuated on Thursday after closing at higher levels the previous day on expectations of higher demand, following a drop in US crude inventories and continued supply constraints because of Russia’s invasion of Ukraine.
Investors are also considering what impact a potential global recession would have on fuel demand.
After inching up slowly in earlier half of the day on Thursday, oil prices posted a sharp increase later. Brent, the global benchmark for two thirds of the world's oil, was up 3.72 per cent at $97.13 a barrel at 9:33 pm UAE time, while West Texas Intermediate, the gauge that tracks US crude, was trading 3.45 per cent higher at $91.15 a barrel.
Brent futures rose 1.4 per cent to close at $93.65 per barrel at the end of trading on Wednesday, while WTI gained 1.8 per cent to end the day at $88.11 per barrel. Oil also rose slightly during the morning session on Thursday.
“Oil prices are treading water following Wednesday's rally which came on the back of the EIA (Energy Information Administration) inventory data," said Craig Erlam, senior market analyst, UK and Europe, Middle East and Africa, at Oanda. “The surprising and substantial drawdown alongside record crude exports provided a boost just as the price was testing multi-month lows."
US crude stocks fell by 7.1 million barrels in the week to August 12, the EIA data showed and exports hit 5 million barrels per day, the highest on record.
Supply concerns due to the Ukraine conflict and underinvestment in the energy sector are also impacting oil prices.
“Oil prices picked up again yesterday as demand fears dissipated and the focus shifted to supply constraints,” said Daniel Richards, Mena economist at Emirates NBD.
“Opec Secretary General Haitham Al Ghais told Bloomberg that global oil markets remained at risk of a supply squeeze, which is more in keeping with our expectation of a tight second half than the recent falls in prices would suggest to us — although the wildcard remains what comes of renewed urgency in discussions between Iran and the West.”
Iran, an Opec member, is awaiting a reply from the US after responding to the EU proposal to revive the 2015 nuclear deal, which was abandoned by former US president Donald Trump in 2018.
A potential deal would help Iran to pump more oil into the market and ease the supply crunch caused by the Ukraine conflict.
“Crude price completed an ABCD pattern, and it is more likely than not we see the price rebound to the $100 level in the medium run,” said Ipek Ozkardeskaya, an analyst at Swissquote Bank.
“Factors that push oil prices higher remain in play, except for the demand prospects. The war in Ukraine is still on, Russian oil and gas supplies dry out, the European natural gas prices are going through the roof to a point that countries are moving into alternative energy sources ... many governments, including Switzerland, revive methods to produce energy using oil and coal.”
Oil prices have remained volatile this year. Brent touched about $140 per barrel in March following Russia’s invasion and the sanctions the US and the UK imposed on the import of Moscow’s crude.
However, oil gave up most of its gains in the past few months, as concerns grew over the possibility of a recession hitting fuel demand globally.
Brent has declined from its recent peak of $123 per barrel, but it is still up more than 20 per cent since the beginning of this year.
“The IEA [International Energy Agency] warned last week that the switch from gas to oil is also pressuring the oil demand higher, while supply remains fairly tight, and many Opec countries are believed to produce at their maximum capacity,” Ms Ozkardeskaya said.
The Paris-based agency in its monthly report said global oil demand growth would jump by 380,000 barrels per day to 2.1 million bpd this year.
The agency estimates total world oil demand to reach 99.7 million bpd in 2022 and pass pre-Covid levels of 101.8 million bpd next year.
China, the world’s second-largest economy and a top importer of crude, is also focused on supporting growth in the country that will boost demand for oil.
China cut lending rates on Monday to revive demand as the economy slowed unexpectedly in July, with the factory and retail activity slumping under the zero-Covid policy.
“Therefore, there is a stronger case for a rebound in oil prices, than the contrary,” Ms Ozkardeskaya said.
The oil market is tight and “since there is limited spare capacity and expectations of a revival of the Iran nuclear deal are dwindling, it looks like oil needs to head higher", said Edward Moya, senior market analyst at Oanda.
Ehsan Khoman, director of emerging markets research for Europe, the Middle East and Africa at MUFG Bank, is also bullish about oil prices.
“Oil remains under pressure with weaker than expected Chinese data, prospects of a revival in the Iranian nuclear deal, maintained barrels from Russia and broader recessionary angst,” he said.
“However, we reiterate our bullish oil view, which is delayed rather than derailed, with the market remaining in a larger deficit than we expected in recent months, with Russian production expected to decline into first-quarter of 2023 alongside higher demand due to gas-to-oil switching and the end of the record SPR [Strategic Petroleum Reserve] release.”
In March, US President Joe Biden announced plans to release 180 million barrels from the country’s strategic reserves over six months to cool oil markets amid higher prices.
“Looking ahead, our supply and demand forecasts, we continue to expect that the oil market will remain in unsustainable deficits at current prices,” Mr Khoman said.
"Balancing the market hence still requires demand destruction on top of the ongoing economic slowdown, where we are more cautious than consensus."
UAE currency: the story behind the money in your pockets
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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BIRD%20BOX%20BARCELONA
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Venom
Director: Ruben Fleischer
Cast: Tom Hardy, Michelle Williams, Riz Ahmed
Rating: 1.5/5
The specs: 2018 Chevrolet Trailblazer
Price, base / as tested Dh99,000 / Dh132,000
Engine 3.6L V6
Transmission: Six-speed automatic
Power 275hp @ 6,000rpm
Torque 350Nm @ 3,700rpm
Fuel economy combined 12.2L / 100km
Children who witnessed blood bath want to help others
Aged just 11, Khulood Al Najjar’s daughter, Nora, bravely attempted to fight off Philip Spence. Her finger was injured when she put her hand in between the claw hammer and her mother’s head.
As a vital witness, she was forced to relive the ordeal by police who needed to identify the attacker and ensure he was found guilty.
Now aged 16, Nora has decided she wants to dedicate her career to helping other victims of crime.
“It was very horrible for her. She saw her mum, dying, just next to her eyes. But now she just wants to go forward,” said Khulood, speaking about how her eldest daughter was dealing with the trauma of the incident five years ago. “She is saying, 'mama, I want to be a lawyer, I want to help people achieve justice'.”
Khulood’s youngest daughter, Fatima, was seven at the time of the attack and attempted to help paramedics responding to the incident.
“Now she wants to be a maxillofacial doctor,” Khulood said. “She said to me ‘it is because a maxillofacial doctor returned your face, mama’. Now she wants to help people see themselves in the mirror again.”
Khulood’s son, Saeed, was nine in 2014 and slept through the attack. While he did not witness the trauma, this made it more difficult for him to understand what had happened. He has ambitions to become an engineer.
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
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The%20specs
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MATCH INFO
Europa League final
Marseille 0
Atletico Madrid 3
Greizmann (21', 49'), Gabi (89')
Traces%20of%20Enayat
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THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Ovasave%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20November%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Majd%20Abu%20Zant%20and%20Torkia%20Mahloul%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Healthtech%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%20Three%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-seed%3Cbr%3E%3Cstrong%3EInvestment%3A%3C%2Fstrong%3E%20%24400%2C000%3C%2Fp%3E%0A
FIXTURES (all times UAE)
Sunday
Brescia v Lazio (3.30pm)
SPAL v Verona (6pm)
Genoa v Sassuolo (9pm)
AS Roma v Torino (11.45pm)
Monday
Bologna v Fiorentina (3.30pm)
AC Milan v Sampdoria (6pm)
Juventus v Cagliari (6pm)
Atalanta v Parma (6pm)
Lecce v Udinese (9pm)
Napoli v Inter Milan (11.45pm)
Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi
Yadoo’s House Restaurant & Cafe
For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.
Golden Dallah
For the cappuccino, luqaimat and aseeda.
Al Mrzab Restaurant
For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.
Al Derwaza
For the fish hubul, regag bread, biryani and special seafood soup.
US PGA Championship in numbers
1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.
4 Louis Oosthuizen has now finished second in all four of the game's major championships.
5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.
6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.
7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.
8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.
9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.
10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.
11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.
12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.
17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
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UAE currency: the story behind the money in your pockets
