Oil prices dropped to the lowest level this year as the market searches to find the bottom, while bearish sentiment will carry over throughout next year, according to analysts.
Brent crude, the international benchmark, this week dipped to its lowest level this year at US$43 per barrel amid fears of a rising over-supply from Opec and non-Opec members.
“The market is searching for a floor, which some thought would be $45 per barrel, but others would say that the next resistance point is $42.50,” said Eugene Lindell, an oil market analyst at JBC Energy consultants.
Just when speculators’ confidence over oil will return depends on what exactly they believe the bottom to be. JBC Energy, based in Austria, said the floating storage is actually increasing, which is causing concern. “When we discuss the market rebounding, we are no longer talking about recovering to $60 – we’re talking about hitting $50 or slightly above,” Mr Lindell said.
This period typically sees higher amount of stock, but currently there are about 10 to 15 very large crude carriers added to global storage of crude. Part of this is coming from Opec members, Nigeria and Libya, who are exempt from production cuts. Nigeria has added more than 600,000 barrels per day (bpd) to its output compared to last August. “That’s a big deal and the market has to somehow swallow that,” he said.
In addition, Libya is pushing producing around 900,000 bpd with aspirations to hit the 1 million bpd mark – which basically undermines the Opec production deal. This coupled with the ramp up in rigs to tap more shale oil in the United States is continuing bearish sentiments for the next year.
“Everyone in the market believes that next year is going to be tough, it’s just a question of how tough it is,” said Mr Lindell.
He said the fact that the forward curve had shifted into contango throughout next year is indicative that market prices have realised there is a longer-term problem.
Frankfurt-based Commerzbank said in a client report the depressed view of the market is a sign of relative weakness, which has set a downward spiral in motion. “Sentiment on the oil market has become so gloomy that even news that would normally support prices is unable to spark any noticeable recovery,” the bank said.
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Zidane's managerial achievements
La Liga: 2016/17
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Meatless Days
Sara Suleri, with an introduction by Kamila Shamsie
Penguin
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
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Emirates airline – 600555555
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ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
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Children who witnessed blood bath want to help others
Aged just 11, Khulood Al Najjar’s daughter, Nora, bravely attempted to fight off Philip Spence. Her finger was injured when she put her hand in between the claw hammer and her mother’s head.
As a vital witness, she was forced to relive the ordeal by police who needed to identify the attacker and ensure he was found guilty.
Now aged 16, Nora has decided she wants to dedicate her career to helping other victims of crime.
“It was very horrible for her. She saw her mum, dying, just next to her eyes. But now she just wants to go forward,” said Khulood, speaking about how her eldest daughter was dealing with the trauma of the incident five years ago. “She is saying, 'mama, I want to be a lawyer, I want to help people achieve justice'.”
Khulood’s youngest daughter, Fatima, was seven at the time of the attack and attempted to help paramedics responding to the incident.
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Khulood’s son, Saeed, was nine in 2014 and slept through the attack. While he did not witness the trauma, this made it more difficult for him to understand what had happened. He has ambitions to become an engineer.
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Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
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Our family matters legal consultant
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Rating: 3.5/5
It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
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MATCH INFO
Fixture: Thailand v UAE, Tuesday, 4pm (UAE)
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RESULTS
Lightweight (female)
Sara El Bakkali bt Anisha Kadka
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Mohammed Adil Al Debi bt Moaz Abdelgawad
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Amir Boureslan bt Mahmoud Zanouny
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Nabil Ouach bt Ymad Atrous
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Nouredine Samir bt Marlon Ribeiro
Super welterweight
Brad Stanton bt Mohamed El Boukhari
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
WORLD CUP FINAL
England v South Africa
Yokohama International Stadium, Tokyo
Saturday, kick-off 1pm (UAE)