Oil tops $75, highest since 2014 OPEC meeting that led to pump war

Updated 24 April 2018
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Oil tops $75, highest since 2014 OPEC meeting that led to pump war

  • Brent crude, the global benchmark, rose to its highest level since OPEC on Nov. 27, 2014
  • The latest US inventory figures are expected to show a 2.6-million-barrel drop in crude stocks

LONDON: Oil rose above $75 a barrel on Tuesday to its highest since November 2014 before paring some gains, supported by OPEC-led production cuts, strong demand and the prospect of renewed US sanctions on Iran.
Brent crude, the global benchmark, rose to its highest level since OPEC on Nov. 27, 2014 turned its back on curbing output to support prices, a move that triggered a battle for market share and helped deepen a collapse to $27 in early 2016.

 

 Oil prices began to recover in 2016 as OPEC discussed a return to market management with the help of Russia and other non-members. A supply-cutting deal started in January 2017 and has been deepened by a steep output drop in Venezuela.
“Prices are being driven up by tight supply due to high production outages in Venezuela plus the cuts implemented by OPEC and Russia,” said Carsten Fritsch, analyst at Commerzbank. “What is more, demand appears robust.”
Brent traded as high as $75.27, gaining for a sixth day, and was up 1 cent at $74.72 by 1151 GMT. US crude rose 12 cents to $68.76, having hit its highest since Nov. 28, 2014 on Thursday.
The United States has until May 12 to decide whether to quit a nuclear deal with Iran and reimpose sanctions against the third-largest producer in the Organization of the Petroleum Exporting Countries, tightening global supplies.
“Currently, all bets are off on the US staying in the nuclear agreement,” said Tamas Varga of oil broker PVM, who added this concern was the most significant element of Brent’s recent rally.
Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA, said new sanctions against Tehran “could push oil prices up as much as $5 per barrel.”
OPEC’s supply curtailments and the threat of new sanctions are occurring as demand in Asia, the biggest oil-consuming region, has risen to a record.
The supply cut has virtually achieved its stated goal of reducing inventories in developed economies to their five-year average, but OPEC has shown little sign yet of wanting to wind down the deal.
The latest US inventory figures are expected to show a 2.6-million-barrel drop in crude stocks.
The American Petroleum Institute, an industry group, releases its data at 4:30 p.m. EDT (2030 GMT) on Tuesday, a day before the government’s supply report.
One of the factors limiting the oil rally is rising US production. US output, supported by high prices, has hit record levels.

FASTFACTS

US Crude

US crude rose 12 cents to $68.76 on Thursday April 19, this was its highest level since Nov. 28, 2014.


Dubai schools allowed to raise fees after last year’s freeze hit GEMS listing

Updated 46 min 37 sec ago
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Dubai schools allowed to raise fees after last year’s freeze hit GEMS listing

  • UAE authorities fixed the fees in hopes of stimulating the economy
  • The maximum increase for next year will be 2.07 percent for 90 percent of the schools

DUBAI: Dubai will allow a modest increase in school fees for the majority of students in the 2019-2020 academic year, the government said, after last year’s freeze triggered a delay in the London listing of a major school operator.
The move is likely to provide some reprieve for private investors such as private equity firms, who own most of the schools in the country, a Gulf Arab state that acts as a Middle East hub for international companies.
Last year’s move to freeze Dubai school had hit the initial public offering of Blackstone-backed, Middle East-focused education company GEMS, Reuters had reported, citing sources. The London listing was delayed after authorities in Dubai unexpectedly decided to freeze tuition fees, meaning the company’s financial forecasts had to be adjusted, they said.
Dubai’s move last year to freeze school fees came amid a number of other measures to cut costs in a bid to stimulate the economy that has been hurt by a downturn in property prices.
The Dubai government said it will allow an increase in school fees for 90 percent of students by a maximum 2.07 percent from the 2019-2020 academic year.
Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum, the crown prince and son of Dubai’s ruler, approved the new framework where the Dubai School Inspection Bureau will assess the quality of education in each school against its index and rank them accordingly.
Schools in which the quality of education is declining according to the government’s index will not be allowed to increase their fees.
Only 10 percent of the students in Dubai will have their fees increased by more than 2.07 percent, it said.