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Oil falls $7 on Russia-Ukraine talk hopes, China lockdowns

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Ukraine and Russia report rare progress at peace talks.China’s COVID cases this year now exceed the 2021 total.UK urges Saudi Arabia to raise oil output.


LONDON: Oil prices fell around $7 a barrel on Monday as investors pinned hopes on diplomatic efforts between Ukraine and Russia to end their conflict, while a surge in COVID-19 cases in China spooked the markets.

Brent was down by $6.78, or 6%, at $105.89 a barrel at 1358 GMT and US crude fell $7.01, or 6.4%, to $102.32.

Both benchmarks have surged since Russia’s February 24 invasion of Ukraine and are up roughly 40% in the year to date.

Ukrainian and Russian negotiators are set to talk again on Monday via video link. Negotiators had given their most upbeat assessments after weekend negotiations, suggesting there could be positive results within days.

“Beside new talks between Ukraine and Russia, I guess new lockdowns in China are the reason for a negative start of the week for crude oil,” said UBS analyst Giovanni Staunovo.

A northeastern Chinese province on Monday imposed a rare travel ban on its population as the region’s Omicron outbreak helped drive China’s tally of new local COVID-19 cases so far this year higher than the total in 2021.

“Oil prices might continue moderating this week as investors have been digesting the impact of sanctions on Russia, along with parties showing signs of negotiation towards [a] ceasefire,” said Tina Teng, an analyst at CMC Markets.

Russia’s output of oil and gas condensate rose to 11.12 million barrels per day (bpd) so far in March, two sources familiar with production data told Reuters, despite sanctions.

The United States has announced a ban on Russian oil imports and Britain said it would phase them out by the end of 2022. Russia is the world’s top exporter of crude and oil products combined, shipping about 7 million bpd or 7% of global supplies.

A senior minister said British Prime Minister Boris Johnson was trying to persuade Saudi Arabia to increase its oil output, while International Energy Agency (IEA) chief Fatih Birol urged oil-producing countries to pump more.

India said it would take “appropriate” steps to calm the rise in oil prices, indicating the country could release more oil from its national stocks if required.

Indian officials also said New Delhi was considering a Russian offer to buy its crude oil and other commodities at discounted prices via a rupee-rouble transaction.

Meanwhile, investors are watching this week’s meeting of the US Federal Reserve, which is expected to start raising interest rates, a move that would boost the dollar and could push down oil prices.

A stronger greenback makes dollar-denominated oil more expensive for holders of foreign currencies.

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The bail petition of Parvez Elahi in the Jinnah House attack case has been rejected by the ATC.

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A bail application filed by Chaudhry Parvez Elahi, a leader of the Pakistan Tehreek e Insaf (PTI) party, in the Jinnah House attack case has been rejected by an Anti-Terrorism Court (ATC) on the grounds of prematurity.

ATC Judge Arshad Javed announced the decision during today’s hearing.

The counsel representing Parvez Elahi contended that there was a significant likelihood of his client being arrested in relation to the Jinnah House attack case. It was stated that the ex-Chief Minister had previously been held in custody on judicial remand in other cases.

The petitioner requested the court to authorise the release of Parvez Elahi on bail in the Jinnah House attack case.

Nevertheless, the prosecution argued that the bail petition did not meet the necessary legal criteria, emphasising that Parvez Elahi had not been apprehended in connection with the case.

Considering these considerations, the court rejected Parvez Elahi’s request for release, stating that it was premature since he had not been arrested in the Jinnah House attack case.

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The International Monetary Fund (IMF) and Pakistan have initiated discussions at the policy level.

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The International Monetary Fund (IMF) and Pakistan will commence policy-level discussions today (Monday), as financially-strained Islamabad aims to secure another agreement with the Washington-based lender while satisfying all the stringent requirements associated with it.

The negotiations will primarily focus on deciding the magnitude of the upcoming IMF programme, establishing the corresponding terms and conditions, and defining the objectives and aims for the next budget.

Simultaneously, both parties will establish the macroeconomic objectives for the upcoming fiscal year’s budget. The IMF is determined to enforce policies such as monetary tightening (raising interest rates), increasing energy tariffs, adopting a market-based exchange rate, and implementing privatisation.

The expectation is that both parties will conclude the negotiations during the current week and finalise a staff-level agreement, which will then be subject to the ultimate approval of the IMF Executive Board.

A significant number of experts argue that the International Monetary Fund (IMF) has proposed a misguided policy of increasing interest rates, which has severely damaged the economy of the country. Consequently, it is imperative for the State Bank of Pakistan to promptly initiate a cycle of reducing interest rates.

They believe that the existing monetary policy will result in an overwhelming accumulation of debt and taxes, which will hinder the revival of economic activity and investment. This outcome has already been evident to all.

Despite the prevailing cost of living crisis in Pakistan, the IMF is insisting on raising the minimum energy bill, citing its necessity in managing the escalating circular debt.

However, due to the stringent conditions imposed by the IMF and Pakistan’s inability to address the issues in the energy sector, as well as the nature of agreements made with independent power producers (IPPs), the country is unable to benefit from the decline in global prices of solar panels and related equipment.

Further information: Should I choose solar power or not? The inefficiency of the energy sector provides a compelling reason to reconsider the solar energy policy.

Pakistan and the MF initiated discussions on both the Extended Fund Facility (EFF) and climate funding. Pakistan is seeking a larger and more extensive bailout package to stabilise and revitalise its economy.

According to sources, it has been stated that the two parties have reached an agreement on the significant objectives outlined for the forthcoming budget, which encompass the punctual settlement of foreign debt obligations.

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Iran has officially announced a period of national mourning following the tragic death of Raisi in a helicopter crash.

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The state-run news agency IRNA has reported that Iran’s Supreme Leader, Ayatollah Ali Khamenei, has announced a period of five days for the entire nation to grieve the untimely death of President Ebrahim Raisi in a helicopter accident.

Khamenei paid a respectful homage by sharing a photograph of himself with Raisi on X, previously known as Twitter, and included a remark alluding to Imam Reza, the highly esteemed eighth imam of Shia Islam.

Mohammad Mokhber, the First Vice President, has been appointed to supervise the executive branch of the government. He will serve in this role temporarily for a period of 50 days, during which a new presidential election must take place. Mokhber has committed to perpetuating Raisi’s trajectory and guaranteeing the seamless execution of governmental responsibilities.

“As per Article 131 of the constitution, Mokhber has been appointed to lead the executive branch,” stated Khamenei. He further mentioned that Mokhber will collaborate with the heads of the legislative and judicial branches to make arrangements for the upcoming presidential elections, with a deadline of 50 days.”

According to IRNA, Ali Bagheri Kani has been designated as the interim foreign minister following this unfortunate event. The remains of Raisi are currently being brought to Tabriz, however, specific information regarding his funeral plans has not yet been provided.

An unusual conference, encompassing all three levels of the Iranian government, was convened on Monday in response to the tragedy. Mokhber served as the representative of the executive branch, while delegates from the legislative and judiciary branches were also present.

“During the meeting, Mokhber assured that we will adhere to President Raisi’s directives and carry out our assigned responsibilities without any disruptions.” As to the constitution of the Islamic Republic, the first vice president is authorised to temporarily take the position of president with the agreement of the Supreme Leader. Subsequently, a new president is to be elected within a period of 50 days.

Global leaders have offered condolences and conveyed their profound grief and sympathy with the people of Iran in response to this tragic occurrence. While the country grieves, plans are being made to commemorate Raisi’s accomplishments and facilitate a seamless transfer of power.

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