Oil prices fell in afternoon trading on Tuesday as concerns about further interest rate increases and a stronger dollar offset optimism over an improving global economic outlook.
Brent, the benchmark for two thirds of the world’s oil, was 1.37 per cent lower at $83.74 a barrel at 2.22pm UAE time while West Texas Intermediate, the gauge that tracks US crude, was down 1.54 per cent at $76.70 a barrel.
Brent settled about 2 per cent lower at $84.90 on Monday while WTI fell 2.23 per cent to close at $77.90.
“The latest news on the macro front is not bad, at all. The Chinese reopening is now well reflected through the first set of economic data,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“And the cherry on top, the IMF [International Monetary Fund] raised its growth forecast for this year … this is the kind of news that the energy markets normally cheer, but not this time, apparently.”
The IMF marginally raised its growth forecast to 2.9 per cent for 2023 and said easing inflation and China’s reopening pointed to resilience in the global economy.
China's output is projected to accelerate to 5.2 per cent, compared with a previous 4.4 per cent forecast, while India is expected to outpace the world's economies with a 6.1 per cent expansion in 2023, after growing 6.8 per cent last year.
India and China — two of the world’s largest crude oil importers — will account for half of global growth this year, compared with only a tenth for the US and euro area combined, the IMF said.
The fund expects oil prices to fall by about 16 per cent this year.
The average assumed price of oil based on futures markets as of November 29, 2022, is $81.13 in 2023 and $75.36 in 2024, the fund said.
Energy traders will be closely following Wednesday’s Opec+ meeting, where delegates are widely expected to recommend continuing the group’s existing oil output policy.
The US Federal Reserve, which will start its first policy meeting of this year later on Tuesday, is expected to announce a smaller interest rate increase amid cooling inflation rates in the world's largest economy.
“The US dollar is gaining some positive momentum into the Fed meeting, as investors know that the Fed won’t declare victory over inflation despite the falling inflation, and position accordingly,” said Ms Ozkardeskaya.
The US Dollar Index, a measure of the value of the greenback against a weighted basket of major currencies, was up 0.20 per cent at 102.48. A stronger dollar makes oil more expensive for holders of other currencies.
At its last meeting in December, the Fed raised interest rates — for the seventh time in 2022 — by 50 basis points.
The US central bank will most likely announce a smaller increase of 25 basis points this week, but there is “little chance” it will declare the end of monetary tightening, said Ms Ozkardeskaya.
UAE currency: the story behind the money in your pockets
If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
THE DRAFT
The final phase of player recruitment for the T10 League has taken place, with UAE and Indian players being drafted to each of the eight teams.
Bengal Tigers
UAE players: Chirag Suri, Mohammed Usman
Indian: Zaheer Khan
Karachians
UAE players: Ahmed Raza, Ghulam Shabber
Indian: Pravin Tambe
Kerala Kings
UAE players: Mohammed Naveed, Abdul Shakoor
Indian: RS Sodhi
Maratha Arabians
UAE players: Zahoor Khan, Amir Hayat
Indian: S Badrinath
Northern Warriors
UAE players: Imran Haider, Rahul Bhatia
Indian: Amitoze Singh
Pakhtoons
UAE players: Hafiz Kaleem, Sheer Walli
Indian: RP Singh
Punjabi Legends
UAE players: Shaiman Anwar, Sandy Singh
Indian: Praveen Kumar
Rajputs
UAE players: Rohan Mustafa, Ashfaq Ahmed
Indian: Munaf Patel
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
THE SPECS
Jaguar F-Pace SVR
Engine: 5-litre supercharged V8
Transmission: 8-speed automatic
Power: 542bhp
Torque: 680Nm
Price: Dh465,071
