Oil prices edged up on Thursday after the International Energy Agency said Opec+ production cuts would result in a large crude supply deficit in the fourth quarter of this year.
Brent, the benchmark for two thirds of the world’s oil, was trading 0.63 per cent higher at $92.46 a barrel at 11.31am UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 0.68 per cent at $89.12 a barrel.
On Wednesday, Brent settled 0.20 per cent lower at $91.88 a barrel while WTI closed down 0.36 per cent at $88.52.
“Oil prices remain elevated after energy traders read another monthly oil report that sees a tight oil market in the fourth quarter,” said Edward Moya, senior market analyst at Oanda.
The IEA has forecast a global oil demand growth of 1.5 million barrels per day in the second half of the year, compared with the first half, exceeding supply by 1.24 million bpd during that period.
“From September onwards, the loss of Opec+ production, led by Saudi Arabia, will drive a significant supply shortfall through the fourth quarter,” the IEA said.
“Unwinding cuts at the start of 2024 would shift the balance to a surplus. However, oil stocks will be at uncomfortably low levels, increasing the risk of another surge in volatility that would be in the interest of neither producers nor consumers.”
Brent crude has gained about 4 per cent since Opec+ members Saudi Arabia and Russia announced last week that they would extend supply cuts of a combined 1.3 million bpd to the end of the year.
As part of their voluntary cuts, the kingdom is extending its output reduction of a million bpd until December while Russia is rolling over its export cut of 300,000 bpd until the end of the year.
In its monthly oil market report on Tuesday, Opec said it expected a supply shortfall of 3.3 million bpd over the next three months.
The group also stuck to its oil demand outlook for this year and the next, and said China’s recent stimulus measures would help to revive economic growth.
"Our price outlook needs to reflect the fact that the Opec+ focus is more about price optimisation than price stability, and with that in mind, the short-term risk of a Brent move above $95 cannot be ruled out," said Ole Hansen, head of commodity strategy at Saxo Bank.
"With inflationary pressures from higher energy prices on the rise again, the timing of peak rates may suffer another delay while later rate cuts may end up being less than expected."
A surprise increase in US inflation stoked concerns of further monetary tightening, weighing on crude futures.
The Consumer Price Index rose by 0.6 per cent last month, after increasing by 0.2 per cent in July and by 3.7 per cent on an annual basis, the Labour Department reported on Wednesday.
Core CPI – which excludes petrol and food – rose 0.3 per cent last month, slightly higher than the expected 0.2 per cent. Still, it cooled on an annual basis as core CPI rose 4.3 per cent, down from 4.7 per cent in July.
“The August inflation print is unlikely to push the Federal Reserve to hike next week but we think it will, nevertheless, keep a hawkish bias to commentary,” said Edward Bell, senior director of market economics at Emirates NBD.
“We expect the Fed to keep rates on hold until the end of H1 [first half] 2024.”
After pausing its tightening cycle in June, the Fed increased its policy rate in July for the 11th time since March 2022, as it aims to bring inflation down to its 2 per cent target range. It is set to meet next on September 19 and September 20.
Fed chairman Jerome Powell has said the central bank may not be done raising interest rates, arguing more proof is needed to show a cooling economy.
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WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
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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
MATCH INFO
Norwich 0
Watford 2 (Deulofeu 2', Gray 52')
Red card: Christian Kabasele (WatforD)
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
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- Flexible payment plans from developers
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The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Drivers’ championship standings after Singapore:
1. Lewis Hamilton, Mercedes - 263
2. Sebastian Vettel, Ferrari - 235
3. Valtteri Bottas, Mercedes - 212
4. Daniel Ricciardo, Red Bull - 162
5. Kimi Raikkonen, Ferrari - 138
6. Sergio Perez, Force India - 68
Company profile
Company name: Suraasa
Started: 2018
Founders: Rishabh Khanna, Ankit Khanna and Sahil Makker
Based: India, UAE and the UK
Industry: EdTech
Initial investment: More than $200,000 in seed funding
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Results
Stage 4
1. Dylan Groenewegen (NED) Jumbo-Visma 04:16:13
2. Gaviria (COL) UAE Team Emirates
3. Pascal Ackermann (GER) Bora-Hansgrohe
4. Sam Bennett (IRL) Deceuninck-QuickStep
5. Caleb Ewan (AUS) Lotto Soudal
General Classification:
1. Adam Yates (GBR) Mitchelton-Scott 16:46:15
2. Tadej Pogacar (SLO) UAE Team Emirates 0:01:07
3. Alexey Lutsenko (KAZ) Astana Pro Team 0:01:35
4. David Gaudu (FRA) Groupama-FDJ 0:01:40
5. Rafal Majka (POL) Bora-Hansgrohe
NBA FINALS SO FAR
(Toronto lead 3-2 in best-of-seven series)
Game 1 Raptors 118 Warriors 109
Game 2 Raptors 104 Warriors 109
Game 3 Warriors 109 Raptors 123
Game 4 Warriors 92 Raptors 105
Game 5 Raptors 105 Warriors 106
Game 6 Thursday, at Oakland
Game 7 Sunday, at Toronto (if needed)
Global state-owned investor ranking by size
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Canada
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South Korea
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UAE currency: the story behind the money in your pockets
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
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Final: England v South Africa, Saturday, 1pm
Chinese Grand Prix schedule (in UAE time)
Friday: First practice - 6am; Second practice - 10am
Saturday: Final practice - 7am; Qualifying - 10am
Sunday: Chinese Grand Prix - 10.10am
MATCH INFO
Everton 2 Southampton 1
Everton: Walcott (15'), Richarlison (31' )
Southampton: Ings (54')
Man of the match: Theo Walcott (Everton)
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South Africa World Cup squad
South Africa: Faf du Plessis (c), Hashim Amla, Quinton de Kock (w), JP Duminy, Imran Tahir, Aiden Markram, David Miller, Lungi Ngidi, Anrich Nortje, Andile Phehlukwayo, Dwaine Pretorius, Kagiso Rabada, Tabraiz Shamsi, Dale Steyn, Rassie van der Dussen.
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• Scientists estimate there could be as many as 3 million fungal species globally
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