SINGAPORE: Oil prices fell for a second day on Wednesday on renewed demand concerns as coronavirus cases in Asia rise and on fears of rising inflation might lead the US Federal Reserve to raise interest rates, which could limit economic growth.
Brent crude futures fell 73 cents, or 1.1 percent, to $67.98 a barrel at 0452 GMT. It settled 1.1 percent lower on Tuesday after briefly climbing above $70 earlier in the session.
US West Texas Intermediate (WTI) crude futures dropped 77 cents, or 1.2 percent, to $64.72 a barrel, following a 1.2 percent fall on Tuesday.
Brent’s rise to $70 was driven by optimism over the reopenings of the US and European economies, among the the world’s biggest oil consumers. But it later retreated on fears of slowing fuel demand in Asia as COVID-19 cases surge in India, Taiwan, Vietnam and Thailand, prompting a new wave of movement restrictions.
“Yesterday’s trade proved again that $70 signals irrational exuberance,” said Vandana Hari, energy analyst at Vanda Insights in Singapore.
“Assessing the global demand picture remains challenging as reopenings and restrictions across the world are probably the most diverse since the start of the pandemic,” said Hari.
Uncertainties over inflation also prompted investors to reduce exposure to riskier assets like oil.
“There is a wider risk-off play that’s going on,” said Westpac senior economist Justin Smirk.
Smirk said speculation that the Federal Reserve might raise rates because of inflation fears weighed on the outlook for growth and in turn on commodities demand.
“The Fed’s very serious (about holding rates low), but the market’s speculating about earlier movement,” he said.
The Fed has indicated that interest rates will stay at their current low levels through 2023 though futures markets show investors believe rates may start to be raised by September 2022.
Investors will also be watching out for the latest US crude and products stocks data from the US Energy Information Administration due on Wednesday.
Data from the American Petroleum Institute on Tuesday showed crude inventories rose by 620,000 barrels in the week ended May 14, while gasoline inventories fell by 2.8 million barrels and distillate stocks fell by 2.6 million barrels, according to two market sources.
The rise in crude stocks was less than the 1.6 million barrel rise analysts had estimated, on average, in a Reuters poll, while the declines in gasoline and distillate stocks were bigger than anticipated.
Oil prices fall on rising COVID-19 infections in Asia, inflation fears
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Oil prices fall on rising COVID-19 infections in Asia, inflation fears
- The rise in crude stocks was less than the 1.6 million barrel increase analysts had estimated
Artificial intelligence is transitioning into a ‘digital employee’
- AI can be an effective tool, business leaders tell Arab News
- Not about jobs, but ‘convergence of human capital and AI’
RIYADH: Artificial intelligence is fundamentally reshaping the world of work, transitioning from a supporting tool to an active partner that is radically changing the nature of professions and productivity standards.
Amidst the current global transformations, an active regional digital environment is emerging.
This is being led by Saudi Arabia through Vision 2030 and massive investments in smart infrastructure, providing a living model for studying the implications of this partnership between humans and machines on the future of work in the region.
Arab News spoke to various business leaders about the emerging shape of the sector.
Salem Bagami, co-founder of Metatalent, said the ideal relationship between humans and machines at work should be complementary and collaborative.
Humans would bring creativity, emotional intelligence, and complex decision-making, while machines excel at processing big data and performing repetitive, precise tasks.
He believes that this type of balanced partnership would lead to unprecedented productivity and innovation.
Mohammad Al-Jallad, chief technologist and director at HPE, said AI has gone beyond being merely an executive tool to becoming a “digital employee” entrusted with automating routine tasks and providing insights based on data analysis.
He believes that the real opportunity lies not in the debate over job replacement, but in “the convergence of human capital and artificial intelligence.”
AI should augment human teams by taking on menial and routine tasks, enabling employees to focus on critical thinking, creativity, and ethical reasoning, significantly improving operational results.
Bagami also emphasized the complementary nature of this partnership. “The ideal relationship between humans and machines at work is one of collaboration, where each complements the others.”
He explained that humans bring creativity, emotional intelligence, and nuanced decision-making, while machines excel at processing big data and performing repetitive tasks efficiently, leading to increased productivity and innovation.
Opinion
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Salem Alanazi, chairman of Jathwa Technology Co., notes a significant trend among Saudi Arabia companies toward using AI applications to provide faster services to customers at lower costs.
The emergence of the “virtual employee” available around the clock has eliminated the need for some traditional jobs in specific sectors.
Alanazi warns that some companies’ reluctance to adopt AI may expose them to real risks. “All those who hesitated to benefit from AI applications have a lack of understanding of these technologies.”
He said those who adopt these technologies will be able to offer lower-cost, higher-quality services, which will affect the market position of companies that lag behind.
Ali Aljumhour, CEO of VALUE Consultancy, said that the transition of AI into a partner has reshaped the list of most in-demand skills in the job market.
Skills such as “prompt engineering,” “human-machine integration,” and “digital ethics” are becoming increasingly important.
He added that AI has become an instantly available “technical knowledge base,” shifting the criteria for professional distinction toward those capable of smart interaction with these technologies.
In terms of ethics, transparency, and trust, Alanazi points to the complexities of global AI governance, where legislation overlaps and evolves rapidly to keep pace with potential risks, particularly in the areas of cybersecurity and privacy.
Al-Jallad emphasizes this crucial dimension, noting that providing responsible and reliable AI solutions that meet the highest standards of transparency is a key priority, especially in regulated sectors.
Bagami believes there should be basic standards for the ethical use of Al, emphasizing the need for transparency, accountability, and fairness, along with using diverse data sets to prevent bias and protect privacy.
He believes that building trust between humans and machines requires clear explanations of how systems work, giving users the opportunity to provide feedback and conducting periodic performance reviews.
On performance evaluation, Aljumhour said: “I expect radical changes in standards, shifting from measuring individual effort to evaluating the quality of the partnership between humans and machines.”
There should be a focus on the quality of inputs provided to intelligent systems, the accuracy of review and modification, and complex decision-making based on outputs.
He warns, however, of new risks that may arise, such as over-reliance on AI or difficulty in determining responsibility for mistakes.
In the employment sector, Aljumhour expects fundamental changes in standards.
There will be questions and tests focusing on measuring skills in dealing with AI, such as asking candidates about their experiences of collaborating with these systems, or testing their ability to formulate effective requests for complex tasks.
Aljumhour identifies significant human challenges in this transition, with “fear, loss of power, and exclusivity of knowledge” being the biggest concerns for experienced employees.
