Exports grew from Middle East, Russia and Africa in 2017 says WTO

WTO director general Roberto Azevedo warned that “a cycle of retaliation is the last thing the world economy needs.” Reuters
Updated 12 April 2018

Exports grew from Middle East, Russia and Africa in 2017 says WTO

  • Stable demand for oil and other commodities lifts exports 2.3%
  • “A cycle of retaliation is the last thing the world economy needs,” warns WTO director general

The Middle East, Africa, and Russia saw steady export growth of 2.3 percent in volume terms last year on the back of stable demand in quantity terms for oil and other natural resources, according to the latest report by the World Trade Organization.
Imports generated by the combined regions increased slightly by 0.9 percent partly as a result of higher primary commodity prices, “which raise export revenue in resource exporting countries and allow more imports to be purchased,” the WTO said.
Energy prices have more than doubled since January 2016, but even at around $70 per barrel oil prices “still remain below the $100 level that prevailed before the middle of 2014,” the organization noted.
World trade in global goods is expected to maintain its robust recovery since the global financial crisis, but might falter if trade tensions between China and US escalate further.
Trade in goods was forecast to grow 4.4 percent this year after a decade averaging 3 percent a year following the crisis. Last year it grew 4.7 percent — much higher than the 3.6 percent forecast in September — and a further 4 percent rise is expected in 2019, the WTO said.
“However, this important progress could be quickly undermined if governments resort to restrictive trade policies, especially in a tit-for-tat process that could lead to an unmanageable escalation,” WTO Director-General Roberto Azevedo said in a statement. “A cycle of retaliation is the last thing the world economy needs.”
The United States and China have threatened each other with tens of billions of dollars’ worth of tariffs in recent weeks, leading to worries that Washington and Beijing may engage in an all-out trade war.
The WTO’s 2018 forecast puts world trade growth at the top end of previous expectations, since the organization said last September that it expected 2018 growth of 1.4 to 4.4 percent.
The latest forecast raises that to 3.1 to 5.5 percent based on current GDP forecasts, but “a continued escalation of trade restrictive policies could lead to a significantly lower figure,” the WTO said.
“These forecasts do not, and I repeat, they do not factor in the possibility of a dramatic escalation of trade restrictions,” Azevedo told a news conference.
“It is not possible to accurately map out the effects of a major escalation, but clearly they could be serious,” he said. “Poorer countries would stand to lose the most.”

Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.