عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Oil Falls on Demand Growth Concerns, Robust Dollar

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
TT
TT

Oil Falls on Demand Growth Concerns, Robust Dollar

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices fell on Friday on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down nearly 3%.
Brent crude futures fell by 33 cents, or 0.45%, to $72.55 a barrel by 0730 GMT. US West Texas Intermediate crude futures eased 32 cents, or 0.46%, to $69.06 per barrel, Reuters said.
Chinese state-owned refiner Sinopec said in its annual energy outlook released on Thursday that China's crude imports could peak as soon as 2025 and the country's oil consumption would peak by 2027 as diesel and gasoline demand weaken.
"Benchmark crude prices are in a prolonged consolidation phase as the market heads towards the year-end weighed by uncertainty in oil demand growth," said Emril Jamil, senior research specialist at LSEG.
He added that OPEC+ would require supply discipline to perk up prices and soothe jittery market nerves over continuous revisions of its demand growth outlook. The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, recently cut its growth forecast for 2024 global oil demand for a fifth straight month.
Meanwhile, the dollar's climb to a two-year high also weighed on oil prices, after the Federal Reserve flagged it would be cautious about cutting interest rates in 2025.
A stronger dollar makes oil more expensive for holders of other currencies, while a slower pace of rate cuts could dampen economic growth and trim oil demand.
JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day (bpd) in 2025, as the bank forecasts non-OPEC+ supply increasing by 1.8 million bpd in 2025 and OPEC output remaining at current levels.
In a move that could pare supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported on Thursday.
Russia has circumvented the $60 per barrel cap imposed in 2022 using its "shadow fleet" of ships, which the EU and Britain have targeted with further sanctions in recent days.

Most Viewed

 
 
Business

Gold, Silver Extend Free Fall as CME Margin Hike Fuels Selling Pressure

A man walks past a gold shop in the Grand Bazaar in Istanbul (AFP)
A man walks past a gold shop in the Grand Bazaar in Istanbul (AFP)
TT
TT

Gold, Silver Extend Free Fall as CME Margin Hike Fuels Selling Pressure

A man walks past a gold shop in the Grand Bazaar in Istanbul (AFP)
A man walks past a gold shop in the Grand Bazaar in Istanbul (AFP)

A rout in gold and silver intensified on Monday after top commodity exchange CME Group raised margin requirements following a collapse in metals prices last week that was triggered by Kevin Warsh's nomination as the next Fed chair.

Spot gold fell 6.1% to $4,565.79 per ounce by 0726 GMT after shedding more than 9% on Friday in its sharpest one-day drop since 1983. The metal has lost more than $1,000 since hitting a record high at $5,594.82 on Thursday, erasing most of this year's gains.

US gold futures for April delivery were down 3.3% to $4,586.20 per ounce.

Spot silver tumbled 12% to $74.48 an ounce after plunging 27% on Friday ‌in its worst ‌day on record. It has shed about 40% since notching ‌an ⁠all-time peak ‌of $121.64 last week.

"The Warsh nomination, whilst likely being the initial trigger, did not justify the size of the downward move in precious metals, with forced liquidations and margin increases having a cascading effect," said KCM Chief Trade analyst Tim Waterer.

"Warsh's policy approach has been generally supportive of the dollar and by inference, negative for gold, due to his focus on inflation and dim views on quantitative easing and excessive Fed balance sheets."

Investors still expect at least two rate cuts in 2026. Non-yielding bullion ⁠tends to perform better in low-interest-rate environments.

CME Group announced hikes in margins on its precious metal futures on Saturday and ‌said the changes were set to take effect after market ‍close on Monday.

An increase in margin requirements ‍is generally negative for the affected contracts, as the higher capital outlay can dampen speculative ‍participation, reduce liquidity, and pressure traders to unwind positions.

A stunning coda to a record-breaking price rally, the crash is wiping out leveraged investors who, in turn, are selling other assets to cover margin calls on silver and gold.

Stock markets around Asia slid, while US equity futures also dropped.

Spot gold may retrace further into a range of $4,361-$4,476 per ounce after it failed to stabilize around a key support of $4,662, Reuters technical analyst Wang Tao said.

"This obviously ⁠is a very aggressive move today after a (similar one) on Friday because Asia and European markets are just now reacting to what happened on Friday in US hours," said Ilya Spivak, head of global macro at Tastylive.

"The larger narrative continues to be gold supportive, but clearly we hit some sort of a speculative speed bump here and there's a sort of rearranging of portfolios, especially shorter-term portfolios that are impacted by these margins."

Analysts at J.P. Morgan said despite the recent volatility, they expected the rally to remain intact in the longer term.

"We remain firmly bullishly convicted in gold over the medium-term on the back of a clean, structural, continued diversification trend that has further to run amid a still well-entrenched regime of real asset outperformance vs paper assets," ‌they said in a note.

Spot platinum lost 9.4% to $1,958.93 per ounce after hitting a record $2,918.80 on January 26, while palladium shed 5.1% to $1,611.86.

Business

OPEC+ to Keep Oil Output Policy Unchanged for March

FILE PHOTO: A view of the logo of the Organization of the Petroleum Exporting Countries (OPEC) outside their headquarters in Vienna, Austria, November 30, 2023. REUTERS/Leonhard Foeger/File Photo
FILE PHOTO: A view of the logo of the Organization of the Petroleum Exporting Countries (OPEC) outside their headquarters in Vienna, Austria, November 30, 2023. REUTERS/Leonhard Foeger/File Photo
TT
TT

OPEC+ to Keep Oil Output Policy Unchanged for March

FILE PHOTO: A view of the logo of the Organization of the Petroleum Exporting Countries (OPEC) outside their headquarters in Vienna, Austria, November 30, 2023. REUTERS/Leonhard Foeger/File Photo
FILE PHOTO: A view of the logo of the Organization of the Petroleum Exporting Countries (OPEC) outside their headquarters in Vienna, Austria, November 30, 2023. REUTERS/Leonhard Foeger/File Photo

Eight OPEC+ countries on Sunday have agreed to maintain a planned pause in their oil output hikes for March.

The eight countries—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—reaffirmed their commitment to oil market stability, based on a stable global economic outlook and healthy market fundamentals reflected in declining inventory levels.

The OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, took this decision during their virtual meeting held on Sunday, to review global market conditions and outlook.

In a statement on the OPEC+ website, the countries reaffirmed their decision of November 2, to suspend production increases in March 2026 for seasonal reasons.

The OPEC+ countries reiterated that the 1.65 million barrels per day (bpd) reduction may be returned in part or in full subject to evolving market conditions and in a gradual manner. The countries will continue to closely monitor and assess market conditions.

In their continuous efforts to support market stability, they reaffirmed the importance of adopting a cautious approach and retaining full flexibility to continue pausing or reverse the additional voluntary production adjustments, including the previously implemented voluntary adjustments of the 2.2 million barrels per day announced in November 2023.

The eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that will be monitored by the Joint Ministerial Monitoring Committee (JMMC).

They also confirmed their intention to fully compensate for any overproduced volume since January 2024.

The OPEC+ countries will hold monthly meetings to review market conditions, compliance, and compensation mechanisms, with the next meeting scheduled for next March 1.

Crude prices hit six-month highs on concern the US could launch a military strike on OPEC member Iran.

Oil prices have also been supported by supply losses in Kazakhstan, where the oil sector has suffered a series of disruptions in recent months.

OPEC+ includes the Organization of the Petroleum Exporting Countries, plus Russia and other allies. The full OPEC+ pumps about half of the world's oil.

 

 

 

Business

Saudi Economy Defies Forecasts, Posts Fastest Growth in Three Years

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)
TT
TT

Saudi Economy Defies Forecasts, Posts Fastest Growth in Three Years

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)

Saudi Arabia closed 2025 with economic performance that exceeded expectations, recording an annual growth of 4.5 percent. The result not only surpassed the International Monetary Fund’s latest forecast of 4.3 percent, but also marked the Kingdom’s highest growth rate in three years, compared with 2.7 percent in 2024 and 0.5 percent in 2023.

The figures highlight strong economic resilience and align with the strategic direction outlined by the Ministry of Finance in its 2026 budget statement, which stressed the importance of sustaining growth and broadening its drivers in line with Saudi Vision 2030.

Landmark year

The year 2025 proved to be pivotal in Saudi Arabia’s economic transformation, with annual data showing a clear balance among sectoral contributions. Oil activities recorded the strongest annual growth at 5.6 percent, contributing around 1.4 percentage points to gross domestic product.

Non-oil activities, however, continued to consolidate their role as the main engine of growth, expanding by 4.9 percent and contributing about 2.7 percentage points. Government activities maintained moderate growth of 0.9 percent, according to preliminary estimates released by the General Authority for Statistics.

The Ministry of Finance had projected real GDP growth of 4.6 percent for 2025, driven primarily by non-oil activities, which have increasingly become the backbone of economic activity.

Noticeable acceleration

On a quarterly basis, the fourth quarter of 2025 saw a marked acceleration, with GDP growing by 4.9 percent year on year. Oil activities surged by 10.4 percent, contributing 2.5 percentage points to growth, while non-oil activities expanded by 4.1 percent, adding 2.3 points, reflecting strong integration between the two sectors.

Seasonally adjusted quarter-on-quarter growth reached 1.1 percent in the fourth quarter compared with the third.

Oil activities led with 1.4 percent growth, followed by non-oil activities at 1.3 percent, while government activities edged down by 0.2 percent.

Structural transformation

Financial and economic adviser Dr. Hussein Al-Attas told Asharq Al-Awsat that real GDP growth of 4.5 percent in 2025 reflects the success of economic and fiscal policies in achieving genuine diversification, rather than a cyclical improvement linked solely to oil prices.

He noted that the non-oil sector now accounts for about 55–56 percent of real GDP, growing close to 5 percent in 2025, driven by manufacturing, trade, transport and logistics, tourism, and services. These indicators, he said, point to a real structural shift aligned with Vision 2030, enhancing resilience against oil price volatility.

Sustainable outlook

Al-Attas said sustained growth remains achievable despite oil price fluctuations. While oil will remain influential, the expanding non-oil base has reduced sensitivity to oil cycles, supported by fiscal reforms, privatization, stronger private-sector participation, and foreign investment.

Looking ahead, he expects growth of 4.3–4.6 percent in 2026, with balanced contributions from oil and non-oil sectors.

Global banks, including Standard Chartered, forecast growth near 4.5 percent, underscoring confidence in the sustainability of Saudi Arabia’s economic trajectory.