Oil slumps to lowest level since July

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Today we start with oil prices, which have slumped to their lowest levels since early July. The slide puts pressure on the Opec+ group of major oil producers to consider extending and deepening production cuts when they meet in 10 days in Vienna.

Brent crude, the international oil benchmark, fell 5.2 per cent earlier today — one of the biggest daily declines this year — taking prices just under $77 a barrel, below the $80 level at which government budgets start to strain for Saudi Arabia and Russia. The US benchmark West Texas Intermediate fell 5.5 per cent to $72.48 a barrel.

The drop in prices builds pressure on Saudi Arabia, Russia and other members of Opec+ ahead of their next meeting, when they will consider how to respond to weakening oil prices and concerns that a potential stumble in global growth could hold back demand. Our reporters spoke with analysts about their predictions for the oil market.

Here’s what else I’m keeping tabs on today and this weekend:

• Indian elections: Madhya Pradesh and Chhattisgarh hold state assembly elections today.

• US-Asia ties: Joe Biden on Saturday will host leaders from Apec nations in San Francisco.

• Argentina: The nation will hold its final presidential run-off election. Voters have a stark choice between Peronist Sergio Massa and libertarian outsider Javier Milei.

Five more top stories

1. Alibaba has ditched plans to spin off its cloud business and paused the listing of its supermarket unit after reporting lacklustre earnings yesterday. Investors had initially cheered the tech group’s plan to split its empire into six units, but appetite for the restructuring has since waned. Here’s a look at what spurred the change.

2. US President Joe Biden and his Chinese counterpart Xi Jinping have agreed to resume military communications. At a press conference following the San Francisco meeting, which was designed to stabilise the nations’ relationship, Biden said the countries had reached a series of agreements. Get the details of the discussions.

3. Israel is planning military operations in southern Gaza and has asked residents of some neighbourhoods to evacuate their homes, according to leaflets dropped into the city of Khan Younis. The notices signalled a potential widening of Israel’s invasion. Read the latest on the operation and some of the army’s discoveries.

4. The US Treasury has imposed sanctions on three United Arab Emirates-based shipowners it accused of exporting Russian crude priced above the $60 per barrel limit. The move comes as Washington tries to increase enforcement of the price cap set by the G7 and Australia following evidence that it was being widely circumvented.

5. Global investment banks have criticised South Korean regulators’ ban on short selling, accusing authorities of bowing to the demands of local retail investors ahead of parliamentary elections in April. A representative of one of the banks said regulators had created a “bogeyman” and a “phantom farce”.

How well did you keep up with the news this week? Take our quiz. For more, tune into the FT’s Biz Quiz airing live on Saturday. A recording will be available following the event.

The Big Read

The London Stock Exchange Group owns a 300-year-old exchange but makes under 4 per cent of its revenues from listing and trading cash equities. Instead, data and analytics now account for about two-thirds of revenues. The company has gone further than many of its rivals, but across the world stock exchanges are moving away from their traditional businesses and into areas including data, digital assets and mortgages.

We’re also reading . . . 

Chart of the day

Where did the currency wars go? Exchange rates were barely, if at all, on the agenda of Joe Biden and Xi Jinping’s meeting yesterday. While this is a lull, the factors that created battles over currency misalignments have not gone away, writes Alan Beattie. China in particular is threatening to return to the mercantilist behaviour that started protracted tensions 20 years ago.

Take a break from the news

FT senior science writer Clive Cookson selects his favourite books of the year. On his list are titles that will take you on a cosmic mission, explore brain’s impressive balancing act, and impart scientific speculation about white holes.

Additional contributions from Gordon Smith and Gary Jones