WEEKLY ENERGY RECAP: Market awaits major OPEC+ meet

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Updated 18 October 2020

WEEKLY ENERGY RECAP: Market awaits major OPEC+ meet

  • US crude oil inventories have dropped by 3.83 million barrels

Oil prices were relatively stable despite increasing pessimism and skepticism about the slow pace of the oil demand recovery. By the end of the week, prices had settled near the levels of a week earlier. Brent crude edged higher to $42.93 per barrel while WTI crude also ticked up to $40.88 per barrel. The spread between the pair narrowed to $2.05 per barrel.

The news of the week would in other circumstances have sent the price tumbling as a second wave of the virus in Europe triggered stronger distancing measures.

However the continuing efforts of OPEC+ producers helped to alleviate the downward pressure on prices despite some speculation that cohesion within the group was starting to fray ahead of the upcoming OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting this week.

It will assess oil market conditions and output cuts compliance ahead of the OPEC+ meeting scheduled for the end of November.

That gathering will decide whether to ease the existing 7.7 million bpd of output cuts to 5.7 million bpd from January 2021 onward (as already agreed in April) or to keep the output cuts unchanged because of rising inventories levels.

Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin had a phone conversation to assess current market conditions ahead of the next meeting and to emphasize continued cooperation between the countries.

Such cooperation has been extremely effective thus far in stabilizing oil markets during a frenetic period for the global economy.

The partnership between producers from inside and outside OPEC — a partnership in which the Kingdom and Russia played a leadership role — has been a big confidence booster for energy markets.

US crude oil exports hit a 14-month-low amid weak export demand, declining to 2.1 million bpd, which is alarmingly close to the levels of August 2019.

It suggests that US crude oil exports will further drop next year if prices fail to rise above close to the $40 mark and if the pandemic continues to cripple economies, which could lead to an oil surplus next year. 

The latest EIA data showed that US crude oil inventories have dropped by 3.82 million barrels but still remain about 10 percent above the five-year average.

50% of workers fear losing job in next 12 months: Global economic survey

Updated 5 min 9 sec ago

50% of workers fear losing job in next 12 months: Global economic survey

  • Saudi adults more optimistic of developing new skills for future jobs
  • 195m jobs lost worldwide amid COVID-19 pandemic: Egyptian minister

DUBAI: More than half the global workforce fears being made redundant in the next 12 months, according to a World Economic Forum-Ipsos survey.

The study, released on the eve of the World Economic Forum’s (WEF) Jobs Reset Summit, questioned 12,000 adults in 27 countries about employment prospects during the ongoing coronavirus disease (COVID-19) pandemic.

And although at least 50 percent were concerned about losing their jobs over the coming year, two-thirds of workers worldwide said they could learn the skills needed for the jobs of the future through their current employer.

In Saudi Arabia, less than 20 percent of those who took part in the survey were very concerned about their jobs disappearing, compared to 39 percent in Spain.

While the findings painted an overall gloomy picture of the global job situation amid the COVID-19 outbreak, they also highlighted green shoots of optimism, particularly in the Kingdom.

Around 18 percent of Saudi workers were not at all worried about losing their jobs, more than the global average of 17 percent.

On learning, Saudis were even more enthusiastic, with 39 percent confident of gaining the necessary skills to compete for the new job opportunities of the future.

During a WEF discussion on the impact of the global health crisis on employment, Rania Al-Mashat, the Egyptian minister for international cooperation, described the COVID-19 pandemic as a mix of many crises that had rendered 195 million people jobless around the world.

But she said that Egypt’s young population offered great opportunities for the country and the government had already rolled out plans to tap into youth development before the virus outbreak.

“The Egyptian government has taken comprehensive measures to reshape the education system incorporating a significant technology element to the sector and this turned out to be very useful for home schooling during the lockdown,” the minister added during a session titled, “Building a New Economy and Society.”

Al-Mashat pointed out that Egypt was adopting the principles of stakeholder capitalism, and in order to utilize the energies of its youth had been actively creating entrepreneurial space and building a strong digital infrastructure. She said there had been many policy movements, especially in the creation of gender equality accelerators.

Alan Jope, the CEO of Unilever and a speaker in the same session, said COVID-19 was not the only current world crisis, adding that economic, health, geopolitical, trade wars, climate change, capital wars, and a few looming military conflicts could be added to a global list of crises.

He also noted that gross domestic product (GDP) should not be considered the only economic measure. “Our measures for success need to change, we’ll have to look at social and environmental parameters, and not just the GDP.”

Jope predicted plenty of future jobs but not in traditional areas of work. “Most of the jobs will be created in the low-carbon sector, along with the IT and biotech industries,” he said.