Economy
Oil rises 4% on supply cut threats, still set for weekly drops
Oil prices rose about 4% on Friday, upheld by real and threatened cuts to supply, despite futures posting a second weekly decline as aggressive interest rate hikes and China’s Covid-19 curbs weighed on the demand outlook.
Russian President Vladimir Putin has threatened to stop oil and gas exports to Europe if price caps are imposed and a small cut to OPEC+ oil output plans announced this week also supported prices.
Brent crude rose $3.69, or 4.1%, to settle at $92.84 a barrel. US West Texas Intermediate (WTI) crude rose $3.25, or 3.9% to settle at $86.79 a barrel.
“Throughout the next few months, the West will have to contend with the risk of losing Russian energy supplies and oil prices soaring,” said Stephen Brennock of oil broker PVM.
Pressured by worries about a recession and demand, Brent is down sharply from a surge in March close to its all-time high of $147 after Russia invaded Ukraine.
The Group of Seven is trying to find ways to limit Russia’s lucrative oil export revenue in the wake of the invasion. A price cap that G7 countries want to impose on Russian oil to punish Moscow should be set at a fair market value minus any risk premium resulting from its invasion of Ukraine, a US Treasury Department official told reporters on Friday.
Despite Friday’s bounce, both crude benchmarks were headed for a weekly drop, with Brent down about 0.2% on the week after at one point hitting its lowest since January. WTI posted a weekly decline of 0.1%.
If the US Federal Reserve is able to keep the unemployment rate below 5%, it can be aggressive in bringing down inflation but after that trade-offs will appear, Fed Governor Christopher Waller said on Friday.
The Fed should be aggressive with rate hikes while the economy “can take a punch,” he said.
A US Department Of Energy official said the White House was not considering new releases from the US Strategic Petroleum Reserve (SPR) at this time beyond the 180 million barrels that President Joe Biden announced months ago.
“The White House is backing off another release from the SPR,” said Phil Flynn, an analyst at Price Futures Group. “Looks like a lot of the fears the market had previously have gone away.”
US oil rigs fell five to 591 this week, their lowest since mid-June, energy services firm Baker Hughes Co said, as the growth in the rig count and production has slowed despite relatively high energy prices.
Meanwhile, the European Central Bank’s unprecedented rate hike of 75 basis points this week and more Covid-19 lockdowns in China have weighed on prices.
The city of Chengdu extended a lockdown for most of its more than 21 million residents on Thursday while millions more in other parts of China were told to shun travel during upcoming holidays.
Money managers cut their net long US crude futures and options positions by 3,274 contracts to 165,158 in the week to September 6, the US Commodity Futures Trading Commission (CFTC) said on Friday.
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
Syeda Rizwana Hasan, the Adviser for Environment, Forests, and Climate Change, announced today that steps will be taken to restrict the use of polythene shopping bags to safeguard future generations.
Starting from October 1, polythene bags will be banned in shopping malls, followed by a ban in kitchen markets from November 1.
“Everyone must take responsibility and stop using polythene voluntarily. Action against polythene producers will begin from November 1,” Rizwana Hasan stated during a seminar.
The Department of Environment (DoE) organized the seminar to raise public awareness about alternatives to banned polythene bags.
Rizwana Hasan highlighted that the restriction on polythene will be executed in phases according to legal provisions, and discussions with shopping centers and store owners are ongoing to ensure a smooth transition.
She also announced plans to make the government secretariat a plastic-free zone by December.
Other speakers at the seminar included Environment Secretary Dr. Farhina Ahmed, DoE Director General Dr. Abdul Hamid, Director Rajinara Begum, President of the Shop Owners Association Muhammad Helal Uddin, and Md. Arifur Rahman Bhuiyan, Assistant Professor of Environmental Science at BUP. They discussed the harmful effects of polythene and the need for alternative products.
Earlier, Rizwana Hasan inaugurated a fair showcasing eco-friendly alternatives to polythene bags and visited 24 stalls. The fair featured products from government and private entrepreneurs, including reusable bags, jute bags, paper bags, and items made from bamboo and cane.
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