Europe and the US face a “lower” risk of a recession than previously expected, thanks to policies that promote industrial growth, the head of commodity strategy at Saxo Bank has said.
This is expected to help in allaying some of the worst fears in the oil market, Ole Hansen told The National in an interview, adding that “part of that fear has been adding to some selling in the market”.
Traders in the market are not being driven by the balance between supply and demand but by macroeconomic factors, he said.
Brent, the benchmark for two thirds of the world’s oil, is down by about 13 per cent since the beginning of the year as growing concerns about the global economy weigh on the outlook for crude demand.
However, the Inflation Reduction Act in the US and similar policies in the EU will underpin economic growth in those countries, Mr Hansen said.
“We are increasingly doubting that the recession really will strike, both in the US and Europe. There are simply too many handouts still going on [and] too many projects [on] the industrial front.”
The IRA, enacted last year, offers a series of tax incentives on wind, solar, hydropower and other renewables, as well as a push towards electric vehicle ownership.
It is expected to spur about $3 trillion of investment in renewable energy technology, according to Goldman Sachs.
The REPowerEU Plan proposed by the European Commission seeks to increase the share of renewables in the EU’s energy mix to 45 per cent by 2030. This is up from the bloc’s current target of 40 per cent.
The world economy is set to grow at a slower pace as continued monetary policy tightening to rein in inflation is expected to crimp development, the World Bank said earlier this month.
Growth has been forecast at 2.1 per cent this year, down from 3.1 per cent last year, before recovering to 2.4 per cent in 2024, the Washington-based lender said in its latest Global Economic Prospects report.
“Right now, the market needs growth more than [it needs] to worry about prices because we have gotten used to the prices and it’s not as if we are seeing inflation starting to pick up again,” Mr Hansen said.
“But [prices] will struggle to come back down to the levels we have seen in the past and which [are] being projected by the central banks.”
The main question is if central banks will adjust their long-term inflationary forecasts, said Mr Hansen, adding that 2 per cent inflation target would come at the cost of economic growth.
“They'll have to … kill economic growth in order to achieve that.”
Higher interest rates could slow the global economy and dampen crude demand. The US Federal Reserve increased interest rates by a combined 500 basis points since March 2022.
However, strong crude demand, particularly from China, could push Brent back to the $80 a barrel level, Mr Hansen said.
“It's a patience game right now … the focus on stimulus from China has not really come to fruition,” he said.
“We've seen a few rate cuts but has not really been enough to support the market at this point.”
China’s economy, which rebounded after Covid-19 restrictions were lifted at the start of the year, lost momentum in May, posting weaker retail sales and manufacturing output while registering a slowdown in the property sector.
The world’s largest crude importer recently cut two market-based benchmark lending rates, but the loosening of its monetary policy was less aggressive than what some analysts expected.
Potential measures should stimulate growth and create a change in sentiment “because it seems like the Chinese economy is sputtering … and that potentially is filtering through to consumers in the country”, Mr Hansen said.
The International Energy Agency and Opec expect the oil market to tighten in the second half of the year amid Opec+ cuts and a rebound in Chinese crude demand.
However, resilient Russian crude supply and rising output in countries under sanctions such as Iran and Venezuela could potentially result in a smaller deficit in 2023, analysts have said.
Several investment banks, including Goldman Sachs, MUFG and UBS, have slashed their short-term oil price forecasts over the past few weeks, citing higher-than-expected crude supply in the market.
“The bulk of that [oil demand] increase is projected to start in the third quarter, and that obviously [has created] a lot of nervousness in the market about whether that's going to happen or not,” Mr Hansen said.
“If we don’t see a continued increase in demand, then we have a market that will be challenged and that’s probably one reason why … Opec+ and Saudi Arabia stepped in just trying to meet that risk head on,” he said.
On June 4, Saudi Arabia, the world’s largest crude exporter, announced that it would cut its July output by a million barrels per day and said this could be extended depending on market conditions.
Meanwhile, the Opec+ alliance will stick with its voluntary output cuts until the end of next year.
“My overall take is based on the [assumption] that the Opec+ has created a soft floor under the market [and] there is a fear of selling it aggressively lower simply for risk of additional cuts being implemented,” Mr Hansen said.
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
If you go
The flights
Emirates and Etihad fly direct to Nairobi, with fares starting from Dh1,695. The resort can be reached from Nairobi via a 35-minute flight from Wilson Airport or Jomo Kenyatta International Airport, or by road, which takes at least three hours.
The rooms
Rooms at Fairmont Mount Kenya range from Dh1,870 per night for a deluxe room to Dh11,000 per night for the William Holden Cottage.
Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
In 2018, the ICRC received 27,756 trace requests in the Middle East alone. The global total was 45,507.
There are 139,018 global trace requests that have not been resolved yet, 55,672 of these are in the Middle East region.
More than 540,000 individuals approached the ICRC in the Middle East asking to be reunited with missing loved ones in 2018.
The total figure for the entire world was 654,000 in 2018.
BOSH!'s pantry essentials
Nutritional yeast
This is Firth's pick and an ingredient he says, "gives you an instant cheesy flavour". He advises making your own cream cheese with it or simply using it to whip up a mac and cheese or wholesome lasagne. It's available in organic and specialist grocery stores across the UAE.
Seeds
"We've got a big jar of mixed seeds in our kitchen," Theasby explains. "That's what you use to make a bolognese or pie or salad: just grab a handful of seeds and sprinkle them over the top. It's a really good way to make sure you're getting your omegas."
Umami flavours
"I could say soya sauce, but I'll say all umami-makers and have them in the same batch," says Firth. He suggests having items such as Marmite, balsamic vinegar and other general, dark, umami-tasting products in your cupboard "to make your bolognese a little bit more 'umptious'".
Onions and garlic
"If you've got them, you can cook basically anything from that base," says Theasby. "These ingredients are so prevalent in every world cuisine and if you've got them in your cupboard, then you know you've got the foundation of a really nice meal."
Your grain of choice
Whether rice, quinoa, pasta or buckwheat, Firth advises always having a stock of your favourite grains in the cupboard. "That you, you have an instant meal and all you have to do is just chuck a bit of veg in."
RESULTS
6.30pm Al Maktoum Challenge Round-1 Group One (PA) US$65,000 (Dirt) 1,600m
Winner RB Money To Burn, Fabrice Veron (jockey), Eric Lemartinel (trainer).
7.05pm Handicap (TB) $175,000 (Turf) 1,200m
Winner Ekhtiyaar, Jim Crowley, Doug Watson.
7.40pm UAE 2000 Guineas Trial Conditions (TB) $100,000 (D) 1,600m
Winner Commanding, Richard Mullen, Satish Seemar.
8.15pm Singspiel Stakes Group Two (TB) $250,000 (T) 1,800m
Winner Benbatl, Christophe Soumillon, Saeed bin Suroor.
8.50pm Handicap (TB) $135,000 (T) 1,600m
Winner Zakouski, William Buick, Charlie Appleby.
9.25pm Al Maktoum Challenge Round-1 Group Two (TB) $350,000 (D) 1,600m
Winner Kimbear, Pat Dobbs, Doug Watson.
10pm Dubai Trophy Conditions (TB) $100,000 (T) 1,200m
Winner Platinum Star, Christophe Soumillon, Saeed bin Suroor.
10.35pm Handicap (TB) $135,000 (T) 1,600m
Winner Key Victory, James Doyle, Charlie Appleby.
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
What is type-1 diabetes
Type 1 diabetes is a genetic and unavoidable condition, rather than the lifestyle-related type 2 diabetes.
It occurs mostly in people under 40 and a result of the pancreas failing to produce enough insulin to regulate blood sugars.
Too much or too little blood sugar can result in an attack where sufferers lose consciousness in serious cases.
Being overweight or obese increases the chances of developing the more common type 2 diabetes.
THE%C2%A0SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.4-litre%20four-cylinder%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20210hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20320Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20Starting%20from%20Dh89%2C900%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3C%2Fp%3E%0A
How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
UAE SQUAD
Ahmed Raza (Captain), Rohan Mustafa, Jonathan Figy, CP Rizwan, Junaid Siddique, Mohammad Usman, Basil Hameed, Zawar Farid, Vriitya Aravind (WK), Waheed Ahmed, Karthik Meiyappan, Zahoor Khan, Darius D'Silva, Chirag Suri
SERIE A FIXTURES
Saturday (UAE kick-off times)
Atalanta v Juventus (6pm)
AC Milan v Napoli (9pm)
Torino v Inter Milan (11.45pm)
Sunday
Bologna v Parma (3.30pm)
Sassuolo v Lazio (6pm)
Roma v Brescia (6pm)
Verona v Fiorentina (6pm)
Sampdoria v Udinese (9pm)
Lecce v Cagliari (11.45pm)
Monday
SPAL v Genoa (11.45pm)
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
More from Neighbourhood Watch
Racecard
6.35pm: The Madjani Stakes – Group 2 (PA) Dh97,500 (Dirt) 1,900m
7.10pm: Evidenza – Handicap (TB) Dh87,500 (D) 1,200m
7.45pm: The Longines Conquest – Maiden (TB) Dh82,500 (D) 2,000m
8.20: The Longines Elegant – Conditions (TB) Dh82,500 (D)
8.35pm: The Dubai Creek Mile – Listed (TB) Dh132,500 (D) 1,600m
9.30pm: Mirdif Stakes – Conditions (TB) Dh120,000 (D) 1,400m
10.05pm: The Longines Record – Handicap (TB) Dh87,500 (D) 1,900m
