Opec oil ministers sounded the alarm and urged production cuts yesterday as oil prices remained at their lowest levels in months and threatened to slump further amid shrinking demand for crude in industrialised countries.
"If the price level continues as it is, we are seriously thinking of cutting down our production and calling other member countries in Opec, and non-Opec producing countries, to cut their production to safeguard their incomes," Shokri Ghanem, Libya's top oil official, told Agence France-Presse yesterday.
West Texas Intermediate crude for November delivery jumped $3.30 to $91.11 (Dh334) yesterday. The upward correction followed a steep drop on Monday, when crude traded at levels not seen since February.
Dubai crude, which is traded in smaller volumes on world exchanges and serves as a benchmark price for regional producers, closed at $77.85 a barrel yesterday, its lowest level since October last year.
Analysts agree that a key driver in the price fall has been a general perception that demand for oil is shrinking in line with declining economic fortunes.
Since hitting a record high of $147 in July, oil prices have been in a sustained slide that was only exacerbated by the recent financial upheavals on Wall Street. A decision by Opec last month to effectively cut production by half-a-million barrels had little measurable effect on prices, and oil slumped again this week despite the US government's passage of a $700 billion US bailout package.
Oil ministers yesterday said they were watching demand figures closely.
Muhammed Ali Khatibi, Iran's Opec representative, said the group would probably need to reduce its forecast that world oil demand would increase by 900,000 barrels per day next year.
"We are worried about demand," he told Reuters. "The financial crisis is deeper than we expected and this is definitely influencing world oil demand."
The Iraqi oil minister, Hussain al Shahristani, said he, too, was worried about the dip below $100, which he called "the fair price".
"When it was $140, it was too high and could have had negative effects on some economies... but the fall to below $100 will put pressure on the budgets to countries like Iraq, which needs lots of money for reconstruction after years of war," he told Reuters.
He suggested Opec should move to reduce output.
"We will not allow production to exceed demand in a way that would negatively affect crude prices," he said.
The warnings of a production cut came as Qatar announced it would start cutting its small oil output to abide by Opec's decision at its last meeting to return to September 2007 production quotas.
"We are cutting to restrict ourselves to the official quota, as we agreed in the Opec meeting," said Abdullah bin Hamad al Attiyah, who is also the country's deputy premier. "It is small amounts."
Concerns about oil demand were amplified by news from the US, where the Energy Department cut its forecast for US oil demand this year by 270,000 bpd compared with last month. The department's Energy Information Agency also reduced its forecast for world oil consumption by 340,000 bpd.
The EIA said oil prices would average $112 through the rest of the year.
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UAE currency: the story behind the money in your pockets
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
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Director: Mohamed Sammy
Starring: Mohamed Ramadan, Ayad Nasaar, Mohamed Adel and Sabry Fawaz
2 stars
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
Tips to avoid getting scammed
1) Beware of cheques presented late on Thursday
2) Visit an RTA centre to change registration only after receiving payment
3) Be aware of people asking to test drive the car alone
4) Try not to close the sale at night
5) Don't be rushed into a sale
6) Call 901 if you see any suspicious behaviour
One in nine do not have enough to eat
Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.
One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.
The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.
Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.
It is currently estimated that one in nine people globally do not have enough to eat.
On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.
Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.
The view from The National
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
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BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
'Panga'
Directed by Ashwiny Iyer Tiwari
Starring Kangana Ranaut, Richa Chadha, Jassie Gill, Yagya Bhasin, Neena Gupta
Rating: 3.5/5
The Buckingham Murders
Starring: Kareena Kapoor Khan, Ash Tandon, Prabhleen Sandhu
Director: Hansal Mehta
Rating: 4 / 5
The specs
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Power: 154bhp
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Price: From Dh79,600
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The bio
Academics: Phd in strategic management in University of Wales
Number one caps: His best-seller caps are in shades of grey, blue, black and yellow
Reading: Is immersed in books on colours to understand more about the usage of different shades
Sport: Started playing polo two years ago. Helps him relax, plus he enjoys the speed and focus
Cars: Loves exotic cars and currently drives a Bentley Bentayga
Holiday: Favourite travel destinations are London and St Tropez
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers