Russia will decrease oil production, sending prices higher
Russia announced plans to reduce oil production by around 500,000 barrels per day, or about 5%, starting in the next month. Moscow claimed this was in retaliation for Western sanctions.
With its action on Friday, Moscow signaled for the first time how the oil markets would react to the Western sanctions, increasing the possibility that it was now using oil as a weapon in the ongoing economic conflict between Russia and the West. However, other observers claimed that the action was a reflection of Russia's difficulties in exporting its oil in the face of Western sanctions.
In recent months, the European Union and the Group of Seven placed a slew of sanctions on Russia in an effort to reduce its oil revenues, which are a crucial source of funding for its budget. These actions include a restriction on the majority of crude oil imports into the EU and a $60 per barrel worldwide price cap for Russian crude. Western shippers and insurers are obligated under the mechanism to uphold the price cap.
Sunday saw the implementation of a second EU ban on Russian refined products as well as a G-7 pricing cap.
It has been stated by the Kremlin that it will not abide by the price cap. But up until today, Russia has maintained a constant oil output. Moscow has carefully coordinated its oil production strategy for years with the Organization of the Petroleum Exporting Countries (OPEC), a group of major producers, primarily from the Middle East, who have long reduced supply to sustain global prices. The OPEC+ partnership, which consists of OPEC plus a group of producers led by Russia, was discussed by some members of the Kremlin, according to a statement released on Friday.
After record outflows, Credit Suisse anticipates a "substantial" loss in 2023
Clients withdrew a record amount of money in the final three months of 2022, concluding Credit Suisse Group AG's worst annual performance since the financial crisis. As a result, the company issued a warning that it expects a big loss this year.
According to Credit Suisse, losses at both the important wealth division and the investment bank contributed to the worse-than-anticipated net loss of 1.39 billion Swiss francs ($1.5 billion) in the three months that ended in December. In the first two weeks of October, a social media uproar about the bank's survival caused depositors to panic, and Credit Suisse is still working to recoup from those outflows, which totaled 110.5 billion francs for the quarter.
Credit Suisse is restructuring its strategy in an effort to reclaim the bank's footing after years of scandals and losses wrecked consumer faith in the brand. This includes splitting apart portions of its investment bank and focused on its core wealth-management division.
Dubai's economy continued to rise strongly in January
According to the most recent data, Dubai's non-oil economic activity continued to grow strongly in January for the ninth consecutive month as consumer demand and employment both increased in the emirate.
At the beginning of 2023, the Dubai non-oil economy's business environment suggested a further slowdown in growth pace, although rising demand and stable input costs encouraged increases in employment and inventories while average selling prices persisted in their downward trend.
The seasonally adjusted S&P Global purchasing managers' index declined from 55.2 in December to 54.5 points in January, remaining stable above the neutral 50-point threshold that separates economic expansion from contraction. After reaching a high of 55.2 in December, the index sank for the fourth time in five months, reaching its lowest level since February 2022.
Adapted from WSJ, Khaleejtimes, FT, Bloomberg, Reuters
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