Oil prices extended their losses on Wednesday to their lowest levels since March, after the world's biggest benchmarks plummeted 5 per cent a day earlier as a regional banking crisis in the US rattled markets and raised concerns about a recession and lower crude demand.
Brent, the benchmark for two thirds of the world’s oil, settled 4 per cent lower at $72.33 a barrel at market close on Wednesday. West Texas Intermediate, the gauge that tracks US crude, closed down 4.3 per cent at $68.60 a barrel.
Brent settled 5 per cent lower at $75.32 while WTI fell by 5.3 per cent to $71.66 at market close on Tuesday.
The world's biggest benchmarks posted two consecutive weekly declines before this week as a crisis at regional banks in the US led to the collapse of First Republic Bank, the second-largest failure in US history since the 2008 global financial crisis when Washington Mutual imploded.
“It got ugly a lot faster than any oil trader expected … oil is in the danger zone as the banking crisis is crippling the short-term outlook for the economy and driving fears that we could be recession-bound a lot faster,” said Edward Moya, a senior market analyst at Oanda.
“Oil, basically, has weakening prospects from the world’s two largest economies, China and the US, and if the macro backdrop deteriorates, momentum selling could easily send prices below the $70 level.”
The US has had three other failures this year that include Silicon Valley Bank, Signature Bank and cryptocurrency-focused lender Silvergate Capital.
The financial turmoil has raised concerns about credit conditions in the US, which are expected to deteriorate for consumers and businesses over the coming six months to their worst level since the Covid-19 pandemic, a survey of chief economists at 15 of America's biggest banks showed last month.
The American Bankers Association said its Credit Conditions Index fell to 5.8 in the second quarter, from 12.5 in the first quarter. A reading below 50 indicates that the economists forecast weaker credit conditions in the coming six months.
Mixed economic data from the US and China, the world's two largest economies, has also added to the uncertainty about the outlook for oil, dragging prices lower.
China is the world’s top importer of crude, and the decline in oil prices also partly reflects disappointment over survey data pointing to the contraction in Chinese manufacturing activity since December, UBS said in a research note.
In an interview with Bloomberg TV on Wednesday, Amrita Sen the co-founder and director of research at Energy Aspects, said concerns over a slowdown in China are "overblown" and that the productions cuts of Opec+ announced last month need time to materialise.
The US Federal Reserve raised interest rates by 25 basis points on Wednesday, its tenth increase since March 2022 as it aims to bring inflation down to its 2 per cent target rate and restore price stability after consumer prices hit a 40-year high of 9.1 per cent in June last year.
The interest rate increase is expected to put further downward pressure on crude prices and is raising concerns that further monetary tightening will push the US economy into a recession and dent demand.
The "bump raise in the rate has been a factor in the oil price retreat in the past week, as the market has priced in a stronger dollar and downside pressure on oil”, said Rystad Energy senior analyst Louise Dickson.
“The excess money supply in the US market still holds some upside potential for oil prices but any signal of a 'higher for longer' outlook from the Fed on interest rates holds further downside risk for oil prices in the short term.”
The Fed continues to face a delicate balancing act, as it considers the reverberations of further tightening to fight inflation against the backdrop of the turmoil in financial markets.
While inflation in the world's largest economy has come down, it remains high, with the annual Consumer Price Index for March slowing to an annual 5 per cent from 6 per cent in February, well above the Fed's 2 per cent target rate.
Some critics have blamed the Fed for acting too slow and playing catch-up with inflation, which was initially considered transitionary.
Others have attacked the US central bank for its subsequent aggressive pivot in which it raised interest rates by a series of 75 basis point and 50 bps increases, stoking fears and criticism that overtightening may increase the risk of a recession.
The Fed needs to increase unemployment in the US economy and reduce money supply to reduce inflation. While thousands of jobs have been shed, the labour market remains tight.
“There is still a significant amount of excess money supply in the US economy that needs to be fully absorbed in goods and services, which means that prices will still be pushed higher and that the Fed’s medicine may need to be administered at a higher dose for a longer duration,” said Ms Dickson.
The US economy slowed to an annual 1.1 per cent in the first quarter of this year after expanding by an annual 2.6 per cent in the previous quarter.
“Stability of the banking system is a primary duty of any central bank. By raising interest rates, the Fed would risk putting the commercial banking sector under further strain, with the potential of more regional banks collapsing,” Ms Dickson said.
Curbing inflation and the appreciation of the US dollar over the past year puts downside pressure on oil prices as crude becomes more expensive for importing countries with weaker currencies than the dollar.
Ms Dickson said while the focus now is on the US dollar and Fed policy, “a bigger monetary risk lurks in mainland China, which could decide to ‘loosen’ its money supply by deflating its currency in a bid to stimulate its export-driven economy, which could prove deflationary overall for global economic growth”.
Who is Mohammed Al Halbousi?
The new speaker of Iraq’s parliament Mohammed Al Halbousi is the youngest person ever to serve in the role.
The 37-year-old was born in Al Garmah in Anbar and studied civil engineering in Baghdad before going into business. His development company Al Hadeed undertook reconstruction contracts rebuilding parts of Fallujah’s infrastructure.
He entered parliament in 2014 and served as a member of the human rights and finance committees until 2017. In August last year he was appointed governor of Anbar, a role in which he has struggled to secure funding to provide services in the war-damaged province and to secure the withdrawal of Shia militias. He relinquished the post when he was sworn in as a member of parliament on September 3.
He is a member of the Al Hal Sunni-based political party and the Sunni-led Coalition of Iraqi Forces, which is Iraq’s largest Sunni alliance with 37 seats from the May 12 election.
He maintains good relations with former Prime Minister Nouri Al Maliki’s State of Law Coaliton, Hadi Al Amiri’s Badr Organisation and Iranian officials.
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
2018 ICC World Twenty20 Asian Western Regional Qualifier
The top three teams progress to the Asia Qualifier
Final: UAE beat Qatar by nine wickets
Third-place play-off: Kuwait beat Saudi Arabia by five runs
Table
1 UAE 5 5 0 10
2 Qatar 5 4 1 8
3 Saudi 5 3 2 6
4 Kuwait 5 2 3 4
5 Bahrain 5 1 4 2
6 Maldives 5 0 5 0
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Mohammed bin Zayed Majlis
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
Killing of Qassem Suleimani
Zayed Sustainability Prize
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Juvenile arthritis
Along with doctors, families and teachers can help pick up cases of arthritis in children.
Most types of childhood arthritis are known as juvenile idiopathic arthritis. JIA causes pain and inflammation in one or more joints for at least six weeks.
Dr Betina Rogalski said "The younger the child the more difficult it into pick up the symptoms. If the child is small, it may just be a bit grumpy or pull its leg a way or not feel like walking,” she said.
According to The National Institute of Arthritis and Musculoskeletal and Skin Diseases in US, the most common symptoms of juvenile arthritis are joint swelling, pain, and stiffness that doesn’t go away. Usually it affects the knees, hands, and feet, and it’s worse in the morning or after a nap.
Limping in the morning because of a stiff knee, excessive clumsiness, having a high fever and skin rash are other symptoms. Children may also have swelling in lymph nodes in the neck and other parts of the body.
Arthritis in children can cause eye inflammation and growth problems and can cause bones and joints to grow unevenly.
In the UK, about 15,000 children and young people are affected by arthritis.
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
