Oil prices fell on Monday after recording gains for seven straight weeks as a strong dollar and concerns about China’s economic growth weigh on demand growth.
Brent, the benchmark for two-thirds of the world’s oil, was trading 1.07 per cent lower at $85.88 a barrel at 9.03pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was down 1.19 per cent at $82.20 per barrel.
On Friday, Brent settled 0.47 per cent higher at $86.81 a barrel, while WTI rose 0.45 per cent to settle at $83.19.
The US Dollar Index – a measure of its value against a weighted basket of major currencies – extended gains on Monday after a bigger-than-expected increase in US producer prices for July.
The producer price index for final demand rose 0.3 per cent last month, indicating stubborn inflation in the world’s largest economy, the Labour Department said on Friday.
Economists polled by Reuters were expecting the PPI to gain 0.2 per cent.
A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies.
“Hold your horses on calls that the [US Federal Reserve] is done raising rates. This was a notable increase for producer prices and that could very well keep the risk of a November Fed rate hike on the table,” said Edward Moya, senior market analyst at Oanda.
“Given the recent trends with the economy, expectations for the August readings could rise even further. The Fed is likely done raising rates, but the data might not support that call over the next month or two,” Mr Moya said.
Last month, the Fed raised interest rates by 25 basis points, its 11th increase since March 2022, and said further rate increases would be data driven.
Meanwhile, China, the world’s second-largest economy and top crude importer, is expected to release data on national retail sales, foreign direct investment and industrial output on Tuesday.
Global oil demand is set to expand by 2.2 million barrels per day this year, with the Asian country accounting for more than 70 per cent of the growth, according to the International Energy Agency.
However, growth in crude consumption is expected to slow to 1 million bpd next year as the post-pandemic economic rebound runs out of steam, the IEA said in its monthly oil market report last week.
Meanwhile, global oil supply plunged by 910,000 bpd to 100.9 million bpd in July amid a sharp reduction in Saudi Arabia’s output.
Earlier this month, the world’s largest oil exporter said it would extend its voluntary oil production cut of one million bpd until September.
The cut, which first took effect in July, could be further "extended and deepened" and is aimed at supporting the stability and balance of oil markets, the Saudi Press Agency reported, citing an official source from the kingdom’s Ministry of Energy.
Russia, which has pledged to lower its oil output by 500,000 bpd until year-end, will cut oil exports by 300,000 bpd in September.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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