Oil prices were marginally lower on Wednesday amid concerns over waning demand in China, the world’s largest crude importer, and a fall in US crude stocks.
Brent, the benchmark for two thirds of the world’s oil, was trading 0.50 per cent lower at $83.57 a barrel at 1.05pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was down 0.46 per cent at $79.27 a barrel.
On Tuesday, Brent settled 0.51 per cent lower at $84.03 a barrel while WTI was down 0.60 per cent at $79.64.
“There's always been a risk of US [interest] rates remaining higher for longer, while China's recovery has been sluggish for months, as has their response to it,” said Craig Erlam, senior market analyst at Oanda.
“We need to see a significant change in the trend of the data to seriously change the outlook for crude and we haven't seen that.
“It may come over the next month or so but for now, we just appear to have seen crude move into a higher range between $80-$90,” Mr Erlam said.
US crude stocks, an indicator of fuel demand in the world’s largest economy, declined by 2.4 million barrels last week, according to the American Petroleum Institute.
Analysts polled by Reuters were expecting a draw of 2.9 million barrels.
The US Energy Information Administration’s weekly crude inventory data is due later today.
On the supply side, Iran plans to keep raising crude production amid cooling tensions with the US.
The country expects to boost production to 3.4 million barrels a day by the end of summer, from 3.2 million bpd currently, Oil Minister Javad Owji was quoted as saying by Iranian state news agency Shana.
Tehran’s oil exports have faced restrictions after the US withdrew from the 2015 nuclear agreement in 2018, which resulted in the reinstatement of economic sanctions on the Middle Eastern country.
Brent crude has gained more than 13 per cent over the past two months on Opec+ supply cuts and tightening crude inventories.
A further rise in Iran’s supply is the “key bearish risk” for the oil market amid reports of rising exports and of a potential US-Iran prisoner swap, Goldman Sachs said in a research note on Tuesday.
“China news is mixed with downside risk to [gross domestic product] from the property slump,” the investment bank said.
China’s economic recovery has lost momentum mainly due to a deepening property slump and weak consumer spending.
Last week, China’s central bank cut key policy rates for the second time in three months as industrial output and retail sales recorded slower growth in July.
Goldman Sachs, which has estimated global oil stocks at more than 9 billion barrels, said the risk of “persistently” higher-than-expected inventories has eased.
“Recent risk developments to our constructive oil call have been bullish to mixed. The recent draws, and the possibility of lower-for-longer Opec+ supply given Saudi’s reiterated commitment to cuts are bullish,” the bank said.
Goldman Sachs expects Brent crude to trade at $86 a barrel by December this year before increasing to $93 by the end of 2024.
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
The years Ramadan fell in May
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Zayed Sustainability Prize
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
Killing of Qassem Suleimani
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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.
Mohammed bin Zayed Majlis
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
The years Ramadan fell in May
Read more from Aya Iskandarani
Honeymoonish
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KILLING OF QASSEM SULEIMANI
Mohammed bin Zayed Majlis
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if you go
The flights
Emirates offer flights to Buenos Aires from Dubai, via Rio De Janeiro from around Dh6,300. emirates.com
Seeing the games
Tangol sell experiences across South America and generally have good access to tickets for most of the big teams in Buenos Aires: Boca Juniors, River Plate, and Independiente. Prices from Dh550 and include pick up and drop off from your hotel in the city. tangol.com
Staying there
Tangol will pick up tourists from any hotel in Buenos Aires, but after the intensity of the game, the Faena makes for tranquil, upmarket accommodation. Doubles from Dh1,110. faena.com
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
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Killing of Qassem Suleimani
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MORE ON INTERNATIONAL JUSTICE
Company profile
Name: Fruitful Day
Founders: Marie-Christine Luijckx, Lyla Dalal AlRawi, Lindsey Fournie
Based: Dubai, UAE
Founded: 2015
Number of employees: 30
Sector: F&B
Funding so far: Dh3 million
Future funding plans: None at present
Future markets: Saudi Arabia, potentially Kuwait and other GCC countries
