US futures surged past $30 per barrel for the first time in two months as Opec+ output cuts and production shut-ins among independent producers rebalanced a market hit hard by the coronavirus pandemic.
West Texas Intermediate, the US benchmark, was up 11.38 per cent at $32.78 per barrel at 8.16pm UAE time. Brent, the international crude benchmark, was up 8.86 per cent at $35.38 per barrel.
WTI's ascent above $30 is in sharp contrast to its performance during the same time last month when it plunged to a record low of -$40 per barrel as the May futures contract neared expiring.
The oil market has regained some stability since last month's volatility, when inventories were higher and fears of storage reaching capacity grew, exerting downward pressures on both benchmarks.
"It’s a far cry from the negative prices of a month ago that everyone understood wasn’t anything close to a proper valuation," said Jasper Lawler, head of research at London Capital Group. "The surprise drop in US crude stockpiles last week means storage is no longer the central issue."
US inventories made a surprising recovery last week. The US Energy Information Administration reported oil stocks fell 700,000 bpd, beating expectations by S&P Platts of a rise in inventory levels by 4.8 million barrels. Inventories at Cushing, Oklahoma, the physical delivery point for WTI crude also fell 3m barrels, easing concerns of storage capacity reaching its limits.
Collective action by the Opec+ alliance, which agreed to cut 9.7m barrels per day, has offered some relief to a saturated market. Saudi Arabia, the UAE, and Kuwait also increased their voluntary commitments last week. Riyadh pledged to cut a further 1m bpd, bringing its output to the lowest in 18 years. Meanwhile, the UAE and Kuwait also said they would draw back 100,000 bpd and 80,000 bpd in June.
The "gradual re-opening" of global economies played a part in the oil market's resurgence, said Thirumalai Nagesh, economist at Abu Dhabi Commercial Bank.
"The demand for oil has improved with the resumption of economic activity. On the supply side, key GCC producers, including Saudi Arabia, [the] UAE and Kuwait have announced further production cuts to help markets recover from the deep supply glut conditions of April," he said.
"Overall, the positive developments in both supply and demand-side factors have helped improve oil market sentiment," Mr Nagesh added.
Analysts had cautioned of a possible repeat of US crude futures slipping into negative territory towards the expiry of the June contract.
The USO oil fund, whose small-time investors were blamed for the sub-zero sell-off, exited its position from the June contract last month, due to a backlash over its role in the market crash. Contracts for July and August also remained above $30 during the opening session, later trading at $32. 49 and $32.98 per barrel at 8.17pm UAE time, respectively.
"The broader recovery in physical crude continues with market structure and differentials strengthening again at the end of the week," JBC Energy said in a note on Monday.
Declines in US crude inventory, as well as rig counts, which slumped last week to the lowest level since September 2009, upward revisions to demand growth from the IEA, increasing mobility in some countries as well as deepening of cuts by some Opec members, are behind oil's recovery.
"All this is giving the market licence to be exuberant, and also notable in this context is the continued upside to speculative net length in crude last week," JBC said in a note.
"However, incoming data continues to paint a picture of economic damage, including slumping retail sales and factory output, high unemployment, and deep GDP declines for the early parts of the year," it cautioned.
Gold, which has a tight relationship with oil and is a traditional safe haven for investors in times of volatility, rose to $1,763.70 (Dh6,748.07) per ounce, the highest since October 2012. It was trading at $1,732.60 per ounce at 8.22pm UAE time.
The latest increase in bullion came after the US Federal Reserve said stocks and asset prices might take a major hit from the coronavirus pandemic and a recovery might not happen until the end of 2021.
Gold has surged 16 per cent this year as the spread of the virus crimped growth, led to lockdowns worldwide and forced governments and central banks to roll out stimulus and relief packages.
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Killing of Qassem Suleimani
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
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 years Ramadan fell in May
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
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
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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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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
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
UAE currency: the story behind the money in your pockets
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The specs: 2018 Maserati Ghibli
Price, base / as tested: Dh269,000 / Dh369,000
Engine: 3.0-litre twin-turbocharged V6
Transmission: Eight-speed automatic
Power: 355hp @ 5,500rpm
Torque: 500Nm @ 4,500rpm
Fuel economy, combined: 8.9L / 100km
UAE currency: the story behind the money in your pockets
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Meatless Days
Sara Suleri, with an introduction by Kamila Shamsie
Penguin
MATCH INFO
Arsenal 1 (Aubameyang 12’) Liverpool 1 (Minamino 73’)
Arsenal win 5-4 on penalties
Man of the Match: Ainsley Maitland-Niles (Arsenal)
MATCH INFO
Manchester United 1 (Fernandes pen 2') Tottenham Hotspur 6 (Ndombele 4', Son 7' & 37' Kane (30' & pen 79, Aurier 51')
Man of the match Son Heung-min (Tottenham)
Top New Zealand cop on policing the virtual world
New Zealand police began closer scrutiny of social media and online communities after the attacks on two mosques in March, the country's top officer said.
The killing of 51 people in Christchurch and wounding of more than 40 others shocked the world. Brenton Tarrant, a suspected white supremacist, was accused of the killings. His trial is ongoing and he denies the charges.
Mike Bush, commissioner of New Zealand Police, said officers looked closely at how they monitored social media in the wake of the tragedy to see if lessons could be learned.
“We decided that it was fit for purpose but we need to deepen it in terms of community relationships, extending them not only with the traditional community but the virtual one as well," he told The National.
"We want to get ahead of attacks like we suffered in New Zealand so we have to challenge ourselves to be better."
UAE currency: the story behind the money in your pockets
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Company profile
Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year
Employees: Five
Based: Jumeirah Lakes Towers, Dubai
Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
Second round raised Dh720,000 from silent investors in June this year
COMPANY%20PROFILE
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MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Killing of Qassem Suleimani
