WTO downgrades global trade forecast in 2018 and 2019

The WTO now expects merchandise trade volumes to expand 3.9 percent this year and 3.7 percent in 2019. (AFP)
Updated 27 September 2018

WTO downgrades global trade forecast in 2018 and 2019

GENEVA: The World Trade Organization on Thursday downgraded its global trade forecast for this year and next, pointing to escalating trade tensions around the world.
“Escalating trade tensions and tighter credit market conditions in important markets will slow trade growth for the rest of this year and in 2019,” the WTO warned in a statement. “Trade will continue to expand but at a more moderate pace than previously forecast.”
The organization now expects merchandise trade volumes to expand 3.9 percent this year and 3.7 percent in 2019, down from an April forecast of 4.4 percent and 4.0 percent growth, respectively.
The WTO’s downgrade comes only days after US President Donald Trump’s tariffs on another $200 billion of Chinese imports took effect, with Beijing accusing Washington of “economic intimidation.”
The latest volley against Beijing brings the amount of goods hit by duties to more than $250 billion, roughly half of China’s exports to the US.
The WTO said trade measures and threats since its last report in April were only having a “modest” economic effect for now, “but the uncertainty they generate may already be having an impact through reduced investment spending.”

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.