Brent oil price dives to new two-year low under $90

Updated 09 October 2014

Brent oil price dives to new two-year low under $90

LONDON: Brent oil sank to a new two-year low underneath $90 per barrel, hit by plentiful supplies and the weak global demand outlook, traders said.
At 1620 GMT, Brent North Sea crude for delivery in November fell to $89.90, striking the lowest level since June 25, 2012. The contract later stood at $90.29, down $1.09 from Wednesday.
Earlier this year, European benchmark Brent had peaked at $115.71 in mid-June, but has since slumped on the back of abundant supplies, tepid demand and the strong dollar.
“Most if not all of the recent news flow has been price-negative, with demand forecasts being revised lower while supply continues to rise,” said Saxo Bank analyst Ole Hansen.
“Supply gains are being posted by both the US and among OPEC members who continue to produce more than their stated target of 30 million barrels per day.”
In recent months, the market has faced a raft of downgrades to growth forecasts for global oil demand.
Mounting economic concerns in China and the eurozone have also sparked stubborn worries over demand for crude.
At the same time, buoyant supplies in the US — boosted by surging shale energy production — have dimmed US demand for oil.
Added to the picture, geopolitical concerns in major energy-producing regions like Iraq and Ukraine have failed to cause major disruptions to global oil supplies.
“I don’t think the market’s found it’s bottom yet, evidenced by the severity of the drop we’ve seen the last couple of days,” said Gene McGillian at Tradition Energy in Stamford, Connecticut, who predicts a low of $88 for Brent and $85 for WTI.
Since the price rout began Sept. 30 Brent has been technically oversold, showing a Relative Strength Index of below 30 on the charts. It has lost more than 8 percent of its price in just nine days and is down about 16 percent from a June peak.
“Supply is strong, inventories are high and demand in Europe is terrible,” said Michael Hewson, head analyst at CMC Markets.
Germany, Europe’s No. 1 economy, in August experienced its largest plunge in exports since the height of the financial crisis, data showed, prompting heavy cuts to growth forecasts.
and fueling debate on whether Berlin was doing enough to prop up the country and the rest of the euro zone.
On Wednesday, data on US crude inventories showed a bigger-than-expected build of 5 million barrels in the week to Oct. 3. Analysts polled by Reuters had just expected a 1.5 million barrel rise.
Outside of the euro zone and the US, analysts in a Reuters poll forecast that soft domestic demand in China probably slowed imports, investment and retail sales in the No. 2 economy to multi-month or multi-year lows in September. The poll raised questions about whether policymakers should do more to fight the economic slowdown.
Even so, some analysts said the selloff may be overdone.


World should back Vision 2030 strategy says global risk guru

Updated 22 November 2019

World should back Vision 2030 strategy says global risk guru

  • Ian Bremmer: When I see how much more dynamic Riyadh is compared to two years ago, it’s really undeniable that they are actually trying to modernize society
  • Bremmer: They are hosting the G20, and that could help to make them confident enough to push forward on a resolution to the Qatar issue

BEIJING: The world should back Saudi Arabia’s transformation strategy under Vision 2030 despite the challenges the Kingdom has faced, according to Ian Bremmer, one of the leading political risk advisers in the world.

“When I see them moving toward Saudization, when I see how much more dynamic Riyadh is compared to two years ago, it’s really undeniable that they are actually trying to modernize society. I think that’s really important and we should all be rooting for that process to continue,” he told Arab News on the sidelines of the Bloomberg New Economy Forum in Beijing.

He said that the ongoing reforms in the Kingdom were helping it rebuild its international reputation following criticism over the death of journalist Jamal Khashoggi last year. “They are hosting the G20, and that could help to make them confident enough to push forward on a resolution to the Qatar issue.”

“It would be nice if there could be some reduction in the problem with Qatar, and some reintegration of the GCC, and there has been some progress toward that. The fact that we have a peace deal in south Yemen, that will make a difference too, and hopefully it will reduce some of the tension with Iran as a consequence,” he added.

Bremmer was speaking about climate change and other issues at the forum, at a session that acknowledged the difficulty of meeting targets to get rid of fossil fuels by the year 2050. He also talked about the looming “technology wars” between China and the US.