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Oil Prices Regain Some Ground after 7% Loss Last Week

Oil pump jacks work at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/File Photo
Oil pump jacks work at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/File Photo
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Oil Prices Regain Some Ground after 7% Loss Last Week

Oil pump jacks work at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/File Photo
Oil pump jacks work at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/File Photo

Oil prices rose on Monday, recouping some of last week's more than 7% decline on worries about demand in China, the world's top oil importer, and easing concerns about potential supply disruptions in the Middle East.

Brent crude futures were up $1.16, or 1.6%, to $74.22 a barrel at 1036 GMT. US West Texas Intermediate crude futures were up $1.32, or 1.9%, to $70.54 a barrel.

Brent settled down more than 7% last week, while WTI lost around 8%. Those were the contracts' biggest weekly declines since Sept. 2, due to slowing economic growth in China and falling risk premiums in the Middle East, Reuters reported.

China on Monday cut benchmark lending rates as anticipated, part of a broader package of stimulus measures to revive the economy.

Data on Friday showed that China's economy grew at the slowest pace since early 2023 in the third quarter, fuelling growing concerns about oil demand.

Saudi Aramco's CEO told an energy conference in Singapore on Monday that he was still "fairly bullish" on China's oil demand in light of stepped up policy support aimed at boosting growth, and because of rising demand for jet fuel and liquid-to-chemicals.

"Geopolitical tensions in the Middle East and the positive oil demand comments from the CEO of Aramco are likely supporting oil prices," UBS analyst Giovanni Staunovo said.

The US Energy Information Administration said on Friday weekly oilfield production rose by 100,000 barrels per day (bpd) to a record 13.5 million bpd during the week ended Oct. 11.

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Azour: Conflict in the Middle East Increases Uncertainty

The Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Jihad Azour (Asharq Al-Awsat)
The Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Jihad Azour (Asharq Al-Awsat)
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Azour: Conflict in the Middle East Increases Uncertainty

The Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Jihad Azour (Asharq Al-Awsat)
The Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Jihad Azour (Asharq Al-Awsat)

The Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Jihad Azour, stated that ongoing conflicts in Lebanon and the broader Middle East have increased uncertainty, emphasizing that economic stability is the primary need for the region.
Presenting the Regional Economic Outlook report for the Middle East and North Africa on the sidelines of the IMF and World Bank annual meetings, Azour noted that economic growth in the Middle East and Central Asia is expected to rise.
He added that Gulf countries have adapted effectively to various shocks, from the COVID-19 pandemic to multiple crises, with the GCC maintaining a stable growth rate.
Azour highlighted that Saudi Arabia is projected to achieve 4.6% growth, driven by advancements in economic diversification and expansion in non-oil sectors.

He pointed out that the Kingdom’s reforms under Vision 2030 have helped protect the economy despite fluctuations in oil prices. Azour also mentioned that IMF Managing Director Kristalina Georgieva will visit Egypt to assess the effectiveness of the country’s social protection programs, underscoring the importance of maintaining a flexible exchange rate.
Azour noted that geopolitical tensions and conflicts have negatively impacted Egypt’s economy, particularly Suez Canal revenues. He emphasized that the cornerstone of Egypt’s economic reform program is maintaining financial stability and shielding the economy from external shocks, with an expected growth rate of about 4% by the end of the current fiscal year.
He also indicated expectations for a significant decline in inflation in the coming period. The IMF’s program with Egypt, he explained, is designed to address challenging conditions but remains adaptable to shifts in the Middle East.
Azour highlighted that Egypt’s IMF financing program was recently increased from $3 billion to $8 billion, a level well-suited to the country’s macroeconomic needs. He confirmed that the country has received around $35 billion in investments from the United Arab Emirates, providing a major boost to the economy.
Azour also noted that the war in Gaza has affected Jordan’s economy, though the kingdom has maintained growth.