LONDON: Brent crude oil rose on Wednesday after slumping below $16 a barrel to its lowest since 1999, supported by voluntary as well as the prospect of forced production cuts to tackle a glut caused by the coronavirus crisis.
This month, OPEC+ agreed new oil output curbs but global measures to prevent the virus spreading have driven demand down more steeply. The price drop is also expected to drive output curbs for economic reasons or due to a lack of storage.
International benchmark Brent crude, which fell 24 percent in the previous session, touched $15.98 a barrel on Wednesday, hitting its lowest since June 1999. By 1225 GMT, it had recovered to $19.72, up 39 cents or 2 percent.
US West Texas Intermediate was up 9 cents, or 0.8 percent, at $11.66.
“Overall, we are at price levels which will have a strong impact on production worldwide,” said Olivier Jakob, oil analyst at Petromatrix. “We are getting close to $5 a barrel for some crude grades.”
The prospect of supply outstripping demand for several months, at least, led to two of the wildest oil trading days in history this week. The nearby US contract fell into negative territory for the first time ever on Monday.
“Be prepared for more surprises in this broken oil market,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen.
Wednesday’s low for Brent took prices back to a time when OPEC was also tackling a supply glut and business and consumers were concerned — unnecessarily as it turned out — about the Millennium Bug affecting computers after the turn of the century.
In the latest sign of excess supply, the American Petroleum Institute on Tuesday reported that US crude inventories rose by 13.2 million barrels.
The US government’s official supply report is due later on Wednesday.
Although OPEC+ agreed this month to reduce output by 9.7 million bpd, starting from May, producers are already considering further steps.
Saudi Arabia on Tuesday said it was ready to take extra measures with other producers. Iraq made similar comments, although the next formal OPEC+ meeting is in June.
The United States and other countries also said this month they would pump less, bolstering efforts by OPEC+.
But in a development that raises doubt over a formal US supply cut, two of three Texas regulators on Tuesday delayed a vote to force producers to curtail output.
Brent crude oil rises after hitting lowest this century on coronavirus crisis
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Brent crude oil rises after hitting lowest this century on coronavirus crisis
- International benchmark Brent crude, which fell 24 percent in the previous session, touched $15.98 a barrel on Wednesday
Saudi POS spending jumps 28% in final week of Jan: SAMA
RIYADH: Saudi Arabia’s point-of-sale spending climbed sharply in the final week of January, rising nearly 28 percent from the previous week as consumer outlays increased across almost all sectors.
POS transactions reached SR16 billion ($4.27 billion) in the week ending Jan. 31, up 27.8 percent week on week, according to the Saudi Central Bank. Transaction volumes rose 16.5 percent to 248.8 million, reflecting stronger retail and service activity.
Spending on jewelry saw the biggest uptick at 55.5 percent to SR613.69 million, followed by laundry services which saw a 44.4 percent increase to SR62.83 million.
Expenditure on personal care rose 29.1 percent, while outlays on books and stationery increased 5.1 percent. Hotel spending climbed 7.4 percent to SR377.1 million.
Further gains were recorded across other categories. Spending in pharmacies and medical supplies rose 33.4 percent to SR259.19 million, while medical services increased 13.7 percent to SR515.44 million.
Food and beverage spending surged 38.6 percent to SR2.6 billion, accounting for the largest share of total POS value. Restaurants and cafes followed with a 20.4 percent increase to SR1.81 billion. Apparel and clothing spending rose 35.4 percent to SR1.33 billion, representing the third-largest share during the week.
The Kingdom’s key urban centers mirrored the national surge. Riyadh, which accounted for the largest share of total POS spending, saw a 22 percent rise to SR5.44 billion from SR4.46 billion the previous week. The number of transactions in the capital reached 78.6 million, up 13.8 percent week on week.
In Jeddah, transaction values increased 23.7 percent to SR2.16 billion, while Dammam reported a 22.2 percent rise to SR783.06 million.
POS data, tracked weekly by SAMA, provides an indicator of consumer spending trends and the ongoing growth of digital payments in Saudi Arabia.
The data also highlights the expanding reach of POS infrastructure, extending beyond major retail hubs to smaller cities and service sectors, supporting broader digital inclusion initiatives.
The growth of digital payment technologies aligns with Saudi Arabia’s Vision 2030 objectives, promoting electronic transactions and contributing to the Kingdom’s broader digital economy.
