Oil prices closed sharply higher on Friday but still posted a third consecutive week of losses on signs of weakening global crude demand.
Brent, the benchmark for two thirds of the world’s oil, surged 3.86 per cent, or $2.80, to settle at $75.30 a barrel. West Texas Intermediate, the gauge that tracks US crude, jumped up 4.05 per cent, or $2.78, to close at $71.34 a barrel.
For the week, Brent lost 5.3 per cent, while WTI, which saw its price drop to lows last seen in late 2021 after four straight sessions of losses, slipped 7.1 per cent.
“Crude prices remain heavy on weakening demand from Asia and [amid] US banking turmoil,” said Edward Moya, senior market analyst at Oanda.
“This banking crisis might make the oil market start pricing a much worse recession for the US, which is bad news for the crude demand outlook.”
Oil futures fell for two straight weeks as a crisis at regional banks in the US led to the collapse of First Republic Bank, the second-largest banking failure in the country's history.
The US has had three other failures this year — Silicon Valley Bank, Signature Bank and cryptocurrency-focused lender Silvergate Capital.
The US Federal Reserve on Wednesday raised interest rates by 25 basis points, its tenth consecutive increase, and indicated a possible pause in future.
The latest action brings the Fed's interest rates to the target range of between 5 per cent and 5.25 per cent.
“The outlook for the economy is getting uglier by the day and that is making it easier for energy traders to jump on the momentum selling that is hitting … crude,” said Mr Moya.
Traders will be closely following the US employment data for April, which will be released later today.
Initial jobless claims in the US — an indicator for layoffs — were at 242,000 in the week ending on April 29, up from 229,000 the previous week, according to the Labour Department.
“This was the largest uptick for the measure in the past six weeks, in a further signal that the US labour market is starting to slow after a bout of remarkable resilience through the past year,” said Daniel Richards, Mena Economist at Emirates NBD.
Meanwhile, manufacturing activity in China, the world’s second largest economy and top crude importer, contracted in April amid lower domestic demand.
The Caixin manufacturing purchasing managers' index, which gives a snapshot of the country’s manufacturing sector, slipped to 49.5 in April from 50.0 in March. A reading below 50 suggests contraction in the sector.
On the supply side, Iraq, Opec’s second-largest producer after Saudi Arabia, has reportedly set a date for the resumption of oil exports from the Kurdistan region. About 450,000 barrels of crude pass through the export channel.
“The central government has reached the final stages of implementing the agreement with Erbil on the resumption of oil exports from the Kurdistan region,” Iraq’s oil minister Hayan Abdul Ghani was quoted as saying by the Iraqi News Agency on Thursday.
“The oil marketing company that took care of the process of receiving and exporting oil from the region is now in the process of signing contracts with companies that buy oil,” Mr Ghani said.
“In the coming days, the resumption of oil exports will be announced.”
In March, an international arbitration ruling declared that Kurdish oil exports were illegal, leading to the shutdown of oil supply to the main export pipeline through the Turkish port of Ceyhan. The move halted about 0.5 per cent of global crude supply.
Baghdad and Erbil reached an agreement last month to resume crude flows, but exports have remained suspended due to unresolved issues.
Despite the recent market volatility, UBS said it is retaining a positive outlook and expects the oil market to tighten as Opec+ members implement their production cuts and oil demand rises over the coming months.
“Flight activity has rebounded strongly this year, with activity around 2019 levels. Generally, we see oil demand holding up and look for even higher demand over the coming months,” UBS strategist Giovanni Staunovo said in a research note on Thursday.
“The lower potential Opec+ crude production and exports should help the oil market tighten, supporting our view that oil inventories will begin to decline and support prices.”
Brent crossed $85 a barrel last month after Opec+ producers announced voluntary output cuts of 1.16 million barrels per day to ensure oil market stability.
"The surprise cut hasn't proven to be much of a deterrent for sellers, although it may have contributed to the price rebounding around the March lows," said Craig Erlam, senior market analyst at Oanda.
"It would appear volatility is here to stay and traders may be wary about another surprise intervention, although the next meeting is now a month away."
More from Rashmee Roshan Lall
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
Killing of Qassem Suleimani
MATCH INFO
New Zealand 176-8 (20 ovs)
England 155 (19.5 ovs)
New Zealand win by 21 runs
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Killing of Qassem Suleimani
SPECS
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
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
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
UAE%20Warriors%2033%20Results
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UAE currency: the story behind the money in your pockets
The years Ramadan fell in May
UAE currency: the story behind the money in your pockets
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Company%20profile
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Zayed Sustainability Prize
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
RESULTS
Welterweight
Tohir Zhuraev (TJK) beat Mostafa Radi (PAL)
(Unanimous points decision)
Catchweight 75kg
Anas Siraj Mounir (MAR) beat Leandro Martins (BRA)
(Second round knockout)
Flyweight (female)
Manon Fiorot (FRA) beat Corinne Laframboise (CAN)
(RSC in third round)
Featherweight
Bogdan Kirilenko (UZB) beat Ahmed Al Darmaki
(Disqualification)
Lightweight
Izzedine Al Derabani (JOR) beat Rey Nacionales (PHI)
(Unanimous points)
Featherweight
Yousef Al Housani (UAE) beat Mohamed Fargan (IND)
(TKO first round)
Catchweight 69kg
Jung Han-gook (KOR) beat Max Lima (BRA)
(First round submission by foot-lock)
Catchweight 71kg
Usman Nurmogamedov (RUS) beat Jerry Kvarnstrom (FIN)
(TKO round 1).
Featherweight title (5 rounds)
Lee Do-gyeom (KOR) v Alexandru Chitoran (ROU)
(TKO round 1).
Lightweight title (5 rounds)
Bruno Machado (BRA) beat Mike Santiago (USA)
(RSC round 2).
UAE currency: the story behind the money in your pockets
