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Friday, 21 September 2018

Iran looms large over OPEC summit

Iran looms large over OPEC summit:

The Opec summit in Algiers on Sunday meets amid widespread fears of a supply crunch when a forecast 1.4 million barrels a day of crude is lost from Iran in November when US sanctions kick in.

If, on top of that, more supply shocks hit the market in worse-than-expected disruption from Libya and Iraq, the price of crude could surge, said Andy Critchlow, head of energy news at S&P Global Platts. “At the moment, the market looks finely balanced,” he said.

There isn’t a lot of slack in the system. As Critchlow points out: “Upstream investment in infrastructure and new wells is historically low and it will take a long time to turn that around.”

Qatar capital inflows rebound in 2018: IIF - The Peninsula Qatar

Qatar capital inflows rebound in 2018: IIF - The Peninsula Qatar:

A strong rebound in capital inflows to Qatar was the key driver to the overall rise in the non-resident capital flows to a ‘group of 26 countries’ in 2018, estimated at $145bn, up from about $125bn in 2017.

This amounts to over 5 percent of the Frontier Market (FM) GDP—higher than the 3-4 percent we see for larger Emerging Markets…The upturn is due mainly to a strong rebound in flows to Qatar, from outflows of $23bn in 2017 to some $20bn this year, Institute of International Finance (IIF) noted.

IIF’s Frontier Market includes 26 countries, covering five in the Middle East region.Excluding Qatar, non-resident capital flows to these 26-group countries are projected to decline by nearly 20 percent to some $120bn in 2018.

Emirates-Etihad May Be Airline Deal of the Decade. Here's Why. - Bloomberg

Emirates-Etihad May Be Airline Deal of the Decade. Here's Why. - Bloomberg:

A combination of Dubai-based Emirates and Abu Dhabi’s Etihad would be the airline industry’s deal of the decade, if it can be pulled off.

Executives at the two companies have been quietly laying plans to create what would be the world’s biggest airline by passenger traffic, according to people familiar with the discussions. The group would have combined revenue of $29.3 billion and control almost 5 percent of the world’s airline routes.

Etihad and Emirates publicly deny merger talks, but an exploratory look at Emirates taking over Etihad’s airline operations remains on the table, according to the people, who asked not to be identified discussing private considerations. Talks have occurred on-and-off for some time, one of the people said, and any deal would face antitrust as well as political challenges.

Hedge funds pare bullish bets on U.S. crude to 1-month low | Reuters

Hedge funds pare bullish bets on U.S. crude to 1-month low | Reuters:

Hedge funds trimmed their bullish wagers on U.S. crude to the lowest in about a month, data showed on Friday, as trade tensions between the United States and China continued to escalate, raising concerns about oil demand.

The speculator group cut its combined futures and options position in New York and London by 15,972 contracts to 342,839 in the week to Sept. 18, the U.S. Commodity Futures Trading Commission (CFTC) said.

Money managers slashed gross long positions to the lowest levels in a year, driving the reduction.

Oil pares gains in volatile trade ahead of OPEC meet | Reuters

Oil pares gains in volatile trade ahead of OPEC meet | Reuters:

Oil prices see-sawed in a volatile, heavy day of trading on Friday, selling off after news that major producers would consider additional supply one day after U.S. President Donald Trump again blasted the cartel.

Investors grappled with the Organization of the Petroleum Exporting Countries and non-OPEC producers’ ability to offset a shortfall from Iran due to U.S. sanctions that go into full force Nov. 4. The major producers are scheduled to gather in Algeria on Sunday. 


Concerns that the cartel and its allies would fall short sent global benchmark Brent crude LCOc1 $1.00 higher to $80.12 per barrel early in the session.

Exclusive: OPEC and allies consider oil output boost as Iranian supply falls - source | Reuters

Exclusive: OPEC and allies consider oil output boost as Iranian supply falls - source | Reuters:

OPEC and other oil producers are discussing the possibility of raising output by 500,000 barrels per day (bpd) to counter falling supply from Iran because of U.S. sanctions, a source familiar with the discussions told Reuters.

The development comes as oil reached $80 a barrel this month, prompting U.S. President Donald Trump to call again on the Organization of the Petroleum Exporting Countries (OPEC) to help to bring down prices.

OPEC, Russia and other allies agreed a deal in late 2016 to cut supply, but after months of cutting by more than the pact had called for, they agreed in June to boost output by returning to 100 percent compliance. That equates to an increase of about 1 million bpd.

Trump's Blow to Iranian Oil Sparks Curious Price Divergence - Bloomberg

Trump's Blow to Iranian Oil Sparks Curious Price Divergence - Bloomberg:

The relationship between two major oil benchmarks is charting an unexpected course as U.S. sanctions take Iranian crude out of the market.

As demand for alternative Middle Eastern supply increases, regional marker Dubai crude has reason to strengthen. Yet it’s weakening against London’s Brent -- an oil grade with very different chemical characteristics that’s used to price barrels from Europe to Africa.

Brent’s gaining more because futures and derivatives linked to it are accessible to an array of financial investors and traders via a highly liquid market, compared with relatively niche over-the-counter and clearing-house platforms for Dubai. So broader concerns over a potential supply crunch are being reflected to a greater extent in the London marker.

Emirates, Etihad Potential Merger Has Many Stumbling Blocks - Bloomberg

Emirates, Etihad Potential Merger Has Many Stumbling Blocks - Bloomberg:

A takeover by Emirates of Etihad Airways PJSC is the megadeal that has to happen in the global airline industry. At the same time, it’s a poisoned chalice for the suitor that may hobble its growth plans for a generation.

The two carriers are in preliminary talks over a deal, people familiar with the matter told Layan Odeh, Dinesh Nair and Benjamin Katz of Bloomberg News on Thursday. Any discussions may be protracted because combining these two airlines will be as difficult and risky as getting hedgehogs to mate.

While countries the size of China and the U.S. have domestic markets large enough to sustain multiple global hub carriers, the United Arab Emirates is a much smaller beast, with a population of just 9.4 million. Trying to establish not one, but two world-connecting airlines there (just down the road from a third global hub airline in Qatar, population 2.6 million) is a bit like trying to do the same thing in Hong Kong or Singapore

ENOC's jet fuel storage plans show how Iranian sanctions upending oil market | Reuters

ENOC's jet fuel storage plans show how Iranian sanctions upending oil market | Reuters:

Emirates National Oil Company (ENOC) has chartered at least one vessel to store jet fuel to ensure supply to airlines in Dubai as pending U.S. sanctions on Iran have cut off its access to feedstocks for producing the aviation fuel, said several industry sources.

ENOC has chartered the Suezmax-sized tankers Portman Square and NS Africa for 30 to 60 days with an option to store oil products, according to two shipbrokers.

The company will store jet fuel onboard at least one of the vessels, which can store about 100,000 tonnes of jet fuel, two industry sources said.

Oil edges up on supply worries, but Trump's call for lower prices drags | Reuters

Oil edges up on supply worries, but Trump's call for lower prices drags | Reuters:

Oil futures inched up on Friday amid concerns over supply as U.S. sanctions on Iran’s crude exports loom, although calls by U.S. President Donald Trump for lower oil prices dragged.

International benchmark Brent crude for November delivery LCOc1 was up 26 cents, or 0.33 percent, at $78.96 a barrel by 0647 GMT.

U.S. West Texas Intermediate crude for October delivery CLc1 was up 7 cents, or 0.10 percent, at $70.39 a barrel.