US military drone crashes into Black Sea after Russian intercept

Oil falls to 3-month low on inflation worries, US bank shutdowns

Oil prices dropped over 4% to a three-month low on Tuesday after a US inflation report and the recent US bank failures sparked fears of a fresh financial crisis that could reduce future oil demand.

Brent futures fell US$3.32, or 4.1%, to settle at US$77.45 a barrel, while US West Texas Intermediate (WTI) crude fell US$3.47, or 4.6%, to settle at US$71.33.

They were the lowest closes for both benchmarks since Dec 9 and their biggest one-day percentage declines since early January. In addition, both contracts fell into technically oversold territory for the first time in weeks.

Shockwaves from Silicon Valley Bank’s collapse triggered big moves in bank shares as investors fretted over the financial health of some lenders, in spite of assurances from US President Joe Biden and other global policymakers.

“The market is either anticipating a recession in the future or it could be that one or more funds had to raise cash and reduce the risk on their books because they are concerned about liquidity after the bank failures,” said Phil Flynn, an analyst at Price Futures Group. He has not heard of any fund in trouble.

US consumer prices increased solidly in February as Americans faced persistently higher costs for rents and food, posing a dilemma for the US Federal Reserve whose fight against inflation has been complicated by the collapse of two regional banks.

“Crude prices are falling after a mostly in-line inflation report sealed the deal for at least one more Fed rate hike,” said Edward Moya, senior market analyst at data and analytics firm OANDA.

Data showed the US Consumer Price Index (CPI) rose 0.4% in February from 0.5% in January. That slight slowdown in consumer price growth prompted investors to price in a smaller rate hike by the Fed in March.

The Fed is now seen raising its benchmark rate by just a quarter of a percentage point next week, down from a previously expected 50-basis points, and delivering another hike of the same size in May. The Fed’s next twoday meeting starts next Tuesday.

“The Fed’s tightening work is not done just yet and the chances are growing that they will send the economy into a mild recession, and risks remain that it could be a severe one,” OANDA’s Moya said.

The US central bank uses higher interest rates to curb inflation. But those higher rates increase consumer borrowing costs, which can slow the economy and reduce demand for oil.

Tuesday’s crude price decline also came ahead of US data expected to show energy firms added about 1.2 million barrels of oil to crude stockpiles during the week ended March 10.

Limiting crude’s price decline - at least earlier in the day - was a monthly report from the Organisation of the Petroleum Exporting Countries (OPEC) projecting higher oil demand in China, the world’s biggest oil importer, in 2023.

Chinese consumers, unshackled from COVID-19 restrictions, are returning to hotels, restaurants and some shops, but they are choosy about what they buy, disappointing hopes for an immediate post-pandemic splurge.

OPEC, however, left unchanged its forecast for world oil demand to increase by 2.32 million barrels per day, or 2.3%, in 2023. (Reuters)

AUS military MQ-9 surveillance drone crashed into the Black Sea on Tuesday after being intercepted by Russian fighter jets, in the first such incident since Russia’s invasion of Ukraine over a year ago.

The Pentagon said that one of the Russian Su-27 jets struck the propeller of the drone, making it inoperable, while Russia’s Defence Ministry blamed “sharp manoeuvring” of the unmanned drone for the crash and said that its jets did not come into contact with it.

NATO’s Supreme Allied Commander Europe, US Army General Christopher Cavoli, briefed NATO allies about the incident, which was roundly condemned by the White House and the Pentagon -- which warned of the risk of escalation. The State Department said it was summoning Russia’s ambassador over the incident.

Two Russian Su-27 jets carried out what the US military described as a reckless intercept of the American spy drone before one of them collided with it at 7:03 am (0603 GMT).

Several times before the collision, the Russian fighter jets dumped fuel on the MQ-9 -- possibly trying to blind or damage it -and flew in front of the unmanned drone in unsafe manoeuvres, the US military said.

While the United States is not sailing warships in the Black Sea, it has routinely been flying surveillance aircraft in and around the area.

The US military said the incident followed a pattern of dangerous behaviour by Russian pilots operating near aircraft flown by the US and its allies, including over the Black Sea, which lies between Europe and Asia and is bordered by countries including Russia and Ukraine.

(Excerpt from Reuters)

Meta lay-offs: Facebook owner to cut 10,000 staff

Meta, which owns Facebook, Instagram and WhatsApp, has announced plans to cut 10,000 jobs.

It will be the second wave of mass redundancies from the tech giant, which laid off 11,000 employees last November.

Meta chief executive Mark Zuckerberg said the cuts - part of a “year of efficiency” - would be “tough”

In addition to the 10,000 jobs cut, 5000 vacancies at the firm will be left unfilled, he told staff.

In a memo, Zuckerberg told employees he believed the company had suffered “a humbling wake-up call” in 2022 when it experienced a dramatic slowdown in revenue.

Meta previously an- nounced that in the three months to December 2022, earnings were down 4% yearon-year - though it still managed to make a profit of more than $23bn over the course of 2022.

Zuckerberg cited higher interest rates in the US, global geopolitical instability and increased regulation as some of the factors affecting Meta, and contributing to the slowdown.

“I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” he said.

The latest job cuts come as companies, including Google and Amazon, have been grappling with how to balance cost-cutting measures with the need to remain competitive.

At the start of this year, Amazon announced it planned to close more than 18,000 jobs because of “the uncertain economy” and rapid hiring during the pandemic, while Google’s parent company Alphabet made

12,000 cuts.

According to layoffs.fyi, which tracks job losses in the tech sector, there have been more than 128,000 job cuts in the tech industry so far in 2023. (Excerpt from BBC News)

Imran Khan: Clashes as Pakistan Police try to arrest Opposition Leader

Supporters of Pakistan’s main Opposition Leader Imran Khan have clashed with Police outside his home as officers try to arrest him.

Police fired tear gas shells to disperse the supporters, who threw stones and bricks.

There is a tense situation outside the compound, in the city of Lahore, as Police try to force their way in.

He is facing allegations he sold state gifts while in office. He says the case is politically motivated.

Police have made previ- ous attempts to arrest him, but Khan, 70, told the BBC he thought they were determined to put him behind bars this time.

“I’m mentally prepared that I’m going to be spending my night in a cell,” he said. “I don’t know how many nights,

Lebanon’s currency value plunges to 100,000 against US dollar

The Lebanese pound has sunk to a historic low against the US dollar on the country’s parallel market, the latest sombre milestone in an economic meltdown that has plunged much of the population into poverty.

The Lebanese pound, officially pegged at 15,000 to the dollar, was trading at 100,000 against the greenback, dealers said on Tuesday – a dizzying plunge from 1507 before the economic crisis hit in 2019.

The currency’s market value was at about 60,000 to the dollar in late January.

Despite the gravity of the crisis, the political elite, which has been widely blamed for the country’s financial collapse, has failed to check the currency’s free fall.

Since last year, the country has had no President and only a caretaker Government, amid persistent deadlock between rival alliances in Parliament.

Lebanese banks that have long imposed draconian withdrawal restrictions –essentially locking depositors out of their life savings – were closed on Tuesday as they resumed an open-ended strike.

The strike began early last month to protest against what the Association of Banks in Lebanon described as “arbitrary” judicial measures against lenders after depositors filed lawsuits to retrieve savings.

In response to the lawsuits, some judges sought to seize the funds of bank directors or board members or to force lenders to pay out customers’ dollar deposits in pounds at the old 1507 exchange rate. (Excerpt from Al Jazeera) but I’m all prepared for that.”

The former Prime Minister appeared in front of what he said were tear gas cannisters, which he said had been fired into his property.

He said the authorities were trying to arrest him to stop his party from taking part in forthcoming elections. But he added: “Whether I am in jail or not they will not be able to stop my party winning.”

Government Minister Marriyum Aurangzeb said the move had nothing to do with elections and Police were only complying with court orders to arrest him in corruption cases.

Khan’s supporters are also holding protests in other cities.

He was ousted as Prime Minister last April but has kept up pressure on his successor Shehbaz Sharif with demonstrations and speeches calling for elections due later this year to be held early. (Excerpt from BBC News)