The current glut in the oil market is the reason behind the decline in oil prices to below $70 per barrel, with prices currently hovering around $68 and no signs of recovery yet. OPEC+ continues to maintain maximum output, which is contributing to the ongoing oversupply. There appears to be a hidden war with non-OPEC producers in an attempt to stabilize prices, but so far, this strategy has had little effect. The problem continues and is expected to continue for the foreseeable future. As a result, the oil market seems to be left to adjust on its own, with prices driven by market forces regardless of the outcome. Is this a deliberate move by OPEC+ to keep oil prices within a “comfort zone” for the benefit of both buyers and OPEC. With OPEC+ increasingly limited in its ability to influence prices, traditional measures such as production cuts and quota distribution are no longer effective. While OPEC appears to be adapting to lower oil prices for now, it may be reluctant to implement further production cuts that could benefit non-OPEC producers at the expense of its own market share.

However, the ongoing weakness in oil prices is forcing OPEC+ members to borrow from international banks to meet annual budget requirements. In Kuwait’s case, the fiscal year that ended on March 31 saw a budget deficit of approximately KD 1.3 billion, which is significantly lower than the earlier projected deficit of KD 3-4 billion. This is relatively good news for the country, as it reduces the need for external borrowing or the sale of overseas assets to cover the shortfall. It may now be the right time to reassess our fiscal policy and focus on reducing unnecessary expenditures, particularly those that benefit some individuals rather than the state. It is time to cut down on unwarranted expenses. The currently weak crude oil prices is bad news for oil-producing countries, as it leads to larger deficits in their annual budgets. However, in the long term, lower prices are expected to stimulate global demand for oil.

That said, this is not yet the case. Increased U.S. tariffs on imports from most countries trading with it are fueling infl ation and dampening overall demand, including demand for services tied to energy consumption, such as crude oil. Global oil demand is softening, with the U.S. seeing a decline in crude imports, now averaging around six million barrels per day. Domestic production stands at 13.3 million barrels per day, down by roughly 200,000 barrels per day. This imbalance is contributing to further drops in oil prices, with U.S. crude trading below $67 per barrel. On the positive side, lower fuel prices are making travel and driving more affordable, especially during the winter season, which could lead to a seasonal boost in demand. Today’s oil market remains uncertain and offers little indication of a positive turnaround. With weak global demand and oil prices falling below $70 per barrel, and potentially declining further, the outlook remains gloomy. The recent increase in U.S. tariffs on its close trading partners is adding to global inflationary pressures. In response, those partners may impose retaliatory tariffs, further intensifying inflation and reducing overall demand. This, in turn, will put additional downward pressure on oil prices. OPEC+ currently finds itself unable to intervene to stabilize the oil prices. Any attempt to adjust output could risk losing more of its legitimate market share to non- OPEC producers. Given these conditions, now may not be the right time for OPEC+ to step in.

Kuwait announces new pension hike for retirees from August 1.

KUWAIT CITY, July 27: The Public Institution for Social Security (PIFSS) announced on Sunday that the next pension increase of KD 20 (approximately USD 65.4) will be disbursed starting August 1.

In a post on its official ‘ X’ account, the PIFSS confirmed that the increment will cover Kuwaiti retirees as well as individuals treated as Kuwaitis. It will also include those eligible for pensions based on their entitlement percentages.

The institution clarified that the pension increase will be deposited automatically, and beneficiaries do not need to take any action or visit the PIFSS to receive the additional amount.

Gold prices drop to $3,337 amid economic shifts and waning geopolitical tensions.

KUWAIT CITY, July 27: Global gold prices closed last week with a notable decline, falling to USD 3,337 per ounce, as ongoing economic and geopolitical developments continued to pressure the precious metal. This marks the third straight week of losses, erasing gains achieved in previous weeks.

According to a report released on Sunday by Kuwait’s Dar Alsabaek Company, the continued drop in gold prices is largely attributed to improving U.S. economic data and a strengthening dollar index. Additionally, a decline in geopolitical risks has diminished gold’s traditional role as a safe-haven asset.

Gold futures for August delivery settled at USD 3,335.6 per ounce, reflecting a weekly loss of USD 37.9, or approximately 1.12 percent. Spot prices also fell by 1.12 percent on a daily basis.

The report noted that gold trading last week was marked by high volatility. Prices climbed on Monday and Tuesday, peaking at a weekly high of USD 3,433 per ounce. However, the upward momentum quickly reversed, with prices gradually falling to a low of USD 3,325 by Friday afternoon, influenced by a series of economic and financial updates.

One of the key pressure points on gold was the improvement in U.S. labor market data. Unemployment claims fell for the sixth consecutive week—the longest streak since 2022—bolstering optimism about the strength of the U.S. economy and boosting investor confidence.

Despite a 9.6 percent decline in durable goods orders in June — largely driven by a 22.4 percent drop in aircraft orders — core orders excluding transportation rose by 0.2 percent. This reflected ongoing stability in underlying investment activity.

The U.S. dollar index climbed to 97.68 points, rebounding from two-week lows, supported by falling U.S. Treasury yields. The yield on 10-year Treasury bonds dipped to 4.386 percent, while real yields dropped to 1.936 percent. Still, these declines were not enough to halt gold’s downward trend, as higher real yields and a stronger dollar made gold less attractive compared to other investment instruments.

Improved global market sentiment further contributed to the slide in gold prices. Positive developments in trade talks between the United States and the European Union, as well as a new trade agreement signed with Japan, have boosted risk appetite.

Additionally, easing geopolitical tensions in key regions, including Iran and parts of Asia, have lessened investor demand for gold as a hedge. The report noted that no significant military or political escalations occurred over the past week, further reducing gold’s safe-haven appeal.

Looking ahead, the global markets are closely watching the upcoming U.S. Federal Reserve decision, scheduled for next Tuesday. Futures contracts suggest the Fed may keep interest rates steady within the current range of 4.25 percent to 4.50 percent.

In Kuwait, domestic gold prices mirrored global fluctuations. The price of 24-karat gold reached approximately KD 32.830 per gram, while 22-karat gold was priced at about KD 30.100 per gram. Meanwhile, the price of silver stood at KD 419 per kilogram.