LONDON: Oil prices hit their lowest in more than a year on Thursday amid worries about an oversupplied market and future demand following a US interest rate hike.
Global stock also fell after the US Federal Reserve raised rates and maintained most of its guidance for further increases over the next two years.
Some Gulf stock markets were also dragged lower by the news from the Fed, with Dubai retreating about 1.4 percent and Saudi shares down by about 1.7 percent.
OPEC and other producers including Russia this month pledged to cut their output by 1.2 million barrels per day in a bid to support flagging prices.
But these cuts do not kick in until next month and comes on the heels of near record production in Saudi Arabia, the US and Russia.
Saudi Energy Minister Khalid Al-Falih said he expected global oil stocks to decline by the end of the first quarter, but said the market was not being driven by supply and demand as much as speculation, the strength of the US dollar and other geopolitical factors.
“Some of the elements in oil’s bullish story have fallen apart,” Giovanni Staunovo, an analyst at UBS Group in Zurich, told Bloomberg. “US production is higher than expected, concerns over spare capacity didn’t materialize, and the OPEC+ cuts don’t start until January. The correction in equities triggered by the Fed didn’t help either.”
US light crude oil fell 4.9 percent, to a low of $45.82, before recovering later while Brent crude fell by as much as 4.5 percent to its lowest since September 2017.
The decline in prices on Thursday followed a market rally the day before.
“Wednesday’s recovery was short-covering,” said Xi Jiarui, chief oil analyst at consultancy JLC, Reuters reported.
“Investors quickly moved their attention to deteriorating fundamentals in the oil markets, including more signs of slowing economic growth next year, record production and the lack of confidence with OPEC’s pledge to curb production.”
OPEC also plans to release figures detailing voluntary output cut quotas for its members and allies, OPEC Secretary-General Mohammad Barkindo said in a letter seen by Reuters on Thursday.
“In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available,” Barkindo told members in the letter. “I would urge Your Excellencies to kindly make positive announcements reinstating your countries’ commitment to implementing the agreed decisions. This is also vital to underpin trust in our decisions and to buttress ourselves from any naysayers who may doubt our commitment.”
Oil tumbles to lowest in a year on Fed hike
Oil tumbles to lowest in a year on Fed hike
- Oil prices hit their lowest in more than a year on Thursday
- Some Gulf stock markets were also dragged lower by the news from the Fed
Ministerial meeting of the International Labour Conference concludes in Saudi Arabia
RIYADH: The ministerial meeting of the third International Labour Conference concluded Jan. 26 in Riyadh.
The meeting was chaired by Saudi Arabia’s Minister of Human Resources and Social Development Ahmed bin Sulaiman Al-Rajhi and attended by the Director-General of the International Labour Organization, Gilbert Houngbo, and 40 labor ministers from countries representing the G20, Europe, and Asia as well as the Middle East, Africa, and the Americas.
In his opening remarks, Al-Rajhi emphasized the importance of constructive dialogue, stressing that the ministerial meeting is a cornerstone for strengthening international cooperation.
He explained that it aims to facilitate the exchange of constructive visions and experiences among ministers and senior officials, focusing on practical experiences in current labor markets and areas of future cooperation capable of achieving tangible results.
The meeting’s discussions focused on a number of key themes, aiming to stimulate the practical exchange of experiences among participating countries and align employment policies with future workforce readiness requirements. It also focused on identifying the most effective factors for successful employment programs and determining the mechanisms necessary to ensure consistency and integration among labor market policies.
The gathering also resulted in an agreement among the participating ministers on six crucial actions. These include developing methodologies for skills recognition and transferability by improving skills recognition and enhancing their flexibility in the labor market to facilitate mobility between sectors and across borders.
They also agreed on guiding the responsible use of artificial intelligence in labor market systems by employing AI in workforce decisions while ensuring transparency, governance, and oversight.
An additional action focuses on adapting social protection systems to support mobility and career transitions by ensuring that social protection is transferred with workers as the nature of work and career paths change.
In addition, the ministers agreed on promoting the use of data to actively connect individuals with opportunities and strengthening the labor market infrastructure through data and analytics to support the link between employment and skills development.
They further agreed on enhancing workforce planning to anticipate periods of disruption by preparing employment systems to withstand economic shocks and structural shifts.
Finally, they committed to improving pathways to first employment and return to the labor market by enabling pathways that connect individuals with meaningful and valuable career advancement opportunities.
The ministerial meeting is a pivotal element of the International Labour Conference, which has become a leading global platform for promoting evidence-based dialogue and supporting international cooperation on the future of labor markets.
This is achieved in partnership with leading international organizations, including the ILO, the World Bank, and the Organization for Economic Co-operation and Development as well as the UN Development Program, the International Organization for Migration, and the UN Tourism Organization.
Additional organizations include the King’s Trust Fund International and the Mohammed bin Salman Foundation.
The International Labour Conference, taking place on Jan. 26 to 27 at the King Abdulaziz International Conference Center, is themed “Shaping the Future.” It features high-level participation from labor ministers, heads and representatives of international organizations, the private sector, and academic institutions as well as policymakers, thought leaders, and experts from around the world.
More than 200 speakers are participating in over 50 dialogue sessions, with an expected attendance of over 10,000 participants from within the Kingdom and abroad.
