Oil prices ended the week higher on Friday, rallying on the last trading of the year, despite an unexpected rise in US crude stocks, recession fears and demand concerns owing to a resurgence of Covid-19 infections in the world's top crude importer China.
Brent, the benchmark for two thirds of the world’s oil, settled 2.94 per cent higher at $85.91 a barrel at the close of trading on Friday, while West Texas Intermediate, the gauge that tracks US crude, gained 2.37 per cent to $80.26 a barrel.
Despite the price volatility this year, which was exacerbated by the Ukraine war that disrupted global supplies, this was the second annual gain for the oil market.
Brent gained about 10 per cent this year, after jumping 50 per cent in 2021, while WTI ended up about 7 per cent in 2022, following a 55 per cent surge last year.
Brent soared to a 14-year high of close to $140 a barrel in March after Russia’s invasion of Ukraine, but sluggish economic growth in China and the strong possibility of a recession in several economies weighed on the market.
“Going into 2023, the risks are arguably tilted to the upside, although that has been the narrative for much of the year," said Craig Erlam, a senior market analyst at Oanda.
"While producers have finally caught up with post-pandemic demand, other risks remain next year, notably Russian output amid the new price cap and its threats to cut output and not supply any countries abiding by it. That isn't a problem now but if prices do start rising, that could accelerate the move quickly,” said Mr Erlam.
A surprise increase in US crude stocks weighed on prices at the start of trading on Friday.
US commercial oil inventories increased by about 700,000 barrels in the week ending on December 23, data from the US Energy Information Administration (EIA) showed.
Meanwhile, analysts were expecting crude stockpiles to fall by 700,000 barrels to 1.5 million barrels.
The indicator, which shows the level of oil and product stored, gives an overview of US petroleum demand. If the increase in crude stocks is more than expected, it implies weaker demand and is bearish for crude prices.
On Thursday, TC Energy said it completed a controlled restart of its Keystone crude pipeline to Cushing, Oklahoma, returning the vital oil link to service after a three-week shutdown.
"The Keystone Pipeline System is now operational to all delivery points. As always, we continue to monitor the system 24/7 as we deliver the energy customers and North Americans rely on," the Canadian pipeline operator said in a statement.
The pipeline, which can transport 622,000 barrels per day of oil, was closed after more than 14,000 barrels of crude oil spilled into a creek in Kansas.
Analysts and investment banks expect prices to rebound to about $100 next year as China reopens its economy and sanctions on Russian crude cause supply disruptions.
Swiss Lender UBS said earlier that oil demand growth would also be driven by India, Indonesia, South Korea and Malaysia.
"We had all kinds of speculation that it would rally to the $180-200 per barrel area … [but] recession fears took a toll on bullish bets," Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said.
Earlier this week, Russian President Vladimir Putin signed a decree that banned the supply of oil and related products from February 1 for five months to nations that abide by a price cap on its exports.
On December 5, the EU, Australia and the Group of Seven advanced economies agreed to place a price cap of $60 on global purchases of seaborne Russian crude.
EU sanctions on Russian crude, including a ban on refined petroleum products that comes into effect on February 5, are expected to lead to a “further reallocation” of trade, according to the International Energy Agency.
Russia’s oil production could drop by 1.4 million barrels per day in 2023 as a result of the sanctions, the Paris-based agency estimated.
Meanwhile, the Opec+ group of oil-producing countries has shown its willingness to act quickly to protect high crude prices.
The group, which slashed its collective output by 2 million bpd, said this month that it would stick to its oil production targets.
But it is ready to address “market developments” and support the “balance of the oil market and its stability if necessary”.
Brief scores:
Toss: Northern Warriors, elected to field first
Bengal Tigers 130-1 (10 ov)
Roy 60 not out, Rutherford 47 not out
Northern Warriors 94-7 (10 ov)
Simmons 44; Yamin 4-4
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
The biog
Name: James Mullan
Nationality: Irish
Family: Wife, Pom; and daughters Kate, 18, and Ciara, 13, who attend Jumeirah English Speaking School (JESS)
Favourite book or author: “That’s a really difficult question. I’m a big fan of Donna Tartt, The Secret History. I’d recommend that, go and have a read of that.”
Dream: “It would be to continue to have fun and to work with really interesting people, which I have been very fortunate to do for a lot of my life. I just enjoy working with very smart, fun people.”
The five pillars of Islam
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
UAE currency: the story behind the money in your pockets
Result
Qualifier: Islamabad United beat Karachi Kings by eight wickets
Fixtures
Tuesday, Lahore: Eliminator 1 - Peshawar Zalmi v Quetta Gladiators
Wednesday, Lahore: Eliminator 2 – Karachi Kings v Winner of Eliminator 1
Sunday, Karachi: Final – Islamabad United v Winner of Eliminator 2
Profile
Company: Libra Project
Based: Masdar City, ADGM, London and Delaware
Launch year: 2017
Size: A team of 12 with six employed full-time
Sector: Renewable energy
Funding: $500,000 in Series A funding from family and friends in 2018. A Series B round looking to raise $1.5m is now live.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The%20specs
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
COMPANY%20PROFILE
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More from UAE Human Development Report:
Brief scores
Day 1
Toss England, chose to bat
England, 1st innings 357-5 (87 overs): Root 184 not out, Moeen 61 not out, Stokes 56; Philander 3-46
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
More coverage from the Future Forum
The%20Specs%20
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About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
New Zealand 21 British & Irish Lions 24
New Zealand
Penalties: Barrett (7)
British & Irish Lions
Tries: Faletau, Murray
Penalties: Farrell (4)
Conversions: Farrell
