Oil prices for Brent crude fell below $123 a barrel today as dealers bought Saudi Arabia's view that global markets were brimming with supply despite the chaos in Libya.
Saudi Arabia, the world's top oil exporter, said it reined in output in February because refineries had no need for extra barrels to cover for the Libyan disruption, where output has dropped by more than a million barrels daily.
Saudi's crude oil output stood at 8.3 million barrels a day last month, down from 9.1 million barrels a day in February, Ali al-Naimi said in remarks carried by state-run Kuwait News Agency.
Prices have vaulted into triple digits this year as unrest has spread across the Arab world.
Dr Amir Alizadeh, who teaches at the Dubai campus of Cass Bussiness School of City University London, attributes crude's recent ascent to a "tsunami" of events affecting short-term supply and demand.
"Market volatility from our point of view is like London buses: the bad news can bunch up. It's what we call volatility clustering," he said.
"What has happened recently is that we've had unrest in north Africa at the same time as all this effort to bring back the [global] economy in good order has boosted demand. The bad news about supply coming on the back of increased demand creates volatility."
The two-month old uprising in Libya has cut supplies of high-quality crude to Europe from that country to nearly zero,
prompting European refiners to increase their purchases of whatever equivalent crude supplies are on the market.
That has increased demand for North Sea Brent crude, and oil from Nigeria and the Caspian region.
What has happened in Europe, says Dr Alizadeh, is that the effects of drivers for both supply and demand-driven oil shocks have compounded each other, producing a "tsunami" effect.
Supply-side price shocks tend to be related to market fundamentals, in this case an actual drop in Libyan crude exports. Demand related shocks, on the other hand tend to be driven by market speculation or fear of a future supply shortage.
"Sometimes, all the effects combine. Recently, this is the case," he said.
But periods of price volatility may be separated by interludes of calm, sometimes lasting for months or years, in which market signals cancel each other out and stabilise prices. The last such period started in October 2009. For the ensuing 12 months, crude seldom strayed from a relatively narrow band between $70 to $85 a barrel.
The message for Opec, if the organisation wants to stabilise prices, is to maintain enough spare output capacity to meet future demand, Dr Alizadeh said.
"The fact of the matter is that with low oil prices, even Opec countries don't tend to improve the infrastructure," he observed.
tcarlisle@thenational.ae
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
COMPANY%20PROFILE
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Basquiat in Abu Dhabi
One of Basquiat’s paintings, the vibrant Cabra (1981–82), now hangs in Louvre Abu Dhabi temporarily, on loan from the Guggenheim Abu Dhabi.
The latter museum is not open physically, but has assembled a collection and puts together a series of events called Talking Art, such as this discussion, moderated by writer Chaedria LaBouvier.
It's something of a Basquiat season in Abu Dhabi at the moment. Last week, The Radiant Child, a documentary on Basquiat was shown at Manarat Al Saadiyat, and tonight (April 18) the Guggenheim Abu Dhabi is throwing the re-creation of a party tonight, of the legendary Canal Zone party thrown in 1979, which epitomised the collaborative scene of the time. It was at Canal Zone that Basquiat met prominent members of the art world and moved from unknown graffiti artist into someone in the spotlight.
“We’ve invited local resident arists, we’ll have spray cans at the ready,” says curator Maisa Al Qassemi of the Guggenheim Abu Dhabi.
Guggenheim Abu Dhabi's Canal Zone Remix is at Manarat Al Saadiyat, Thursday April 18, from 8pm. Free entry to all. Basquiat's Cabra is on view at Louvre Abu Dhabi until October
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
MATCH SCHEDULE
Uefa Champions League semi-final, first leg
Tuesday, April 24 (10.45pm)
Liverpool v Roma
Wednesday, April 25
Bayern Munich v Real Madrid (10.45pm)
Europa League semi-final, first leg
Thursday, April 26
Arsenal v Atletico Madrid (11.05pm)
Marseille v Salzburg (11.05pm)
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
The biog
Hometown: Cairo
Age: 37
Favourite TV series: The Handmaid’s Tale, Black Mirror
Favourite anime series: Death Note, One Piece and Hellsing
Favourite book: Designing Brand Identity, Fifth Edition
First Person
Richard Flanagan
Chatto & Windus
Blonde
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ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
COMPANY%20PROFILE
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Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Company%20Profile
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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley