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Sunday, 27 December 2015

Opec could gain from aggressive increase in output | The National

Opec could gain from aggressive increase in output | The National:

"Generals are said always to be preparing to fight the last war.

Opec, led by Saudi Arabia, is now re-fighting the campaign of 1986, with some signs of success. But does an entirely new battlefield demand a complete change of strategy – and, if so, what would that be?

As several recent publications – by Columbia University, Citigroup and a provocative new book by Roberto Aguilera and Marian Radetkzi – suggest, the new oil world is not a continuation of the last but something entirely different. The advent of North American shale means that oil production is essentially unlimited at a price of US$60 to $80 per barrel – and possibly less, as technology advances in this still-infant industry."



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Iran oil minister denies heavy oil discounting as market share battle looms | The National

Iran oil minister denies heavy oil discounting as market share battle looms | The National:

"Iran’s oil minister yesterday denied his country is offering steep discounts to boost exports amid an intensifying battle for Asian market share.

As Iran prepares for the lifting of international sanctions related to its nuclear programme next year, Bijan Namdar Zangeneh, the oil minister, told the government’s Islamic Republic News Agency (Irna) that the country would offer only “regular and customary” discounts to prospective customers.

He was responding to reports that Iran was discussing deep discounts with prospective buyers as it plans to increase exports from 1 million barrels per day – the level at which they have been capped since sanctions were put in place in 2011."



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Oil drop threatens to push energy groups into liquidation - FT.com

Oil drop threatens to push energy groups into liquidation - FT.com:

"A growing number of energy companies that have filed or will soon file for bankruptcy court protection are likely to be liquidated, with their prospects diminished by the latest falls in natural gas and oil prices, according to distressed investors and restructuring advisers.
Companies that restructure crippling debt loads can often emerge from bankruptcy and start life anew, but with the latest fall in energy prices, even a freshly capitalised balance sheet may not be enough to save the company.  “Even if you take away all the debt, it is not clear some energy firms can operate,” said one restructuring specialist. “Their basic economics requires oil to be considerably north of where it is. They can’t reorganise.”"



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Dubai budget emphasises social aspect of development | GulfNews.com

Dubai budget emphasises social aspect of development | GulfNews.com:

"The Dh46.1 billion annual budget of Dubai approved by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai on Sunday, focuses on maximum resource allocation social aspect of development in the emirate.

“The benefit of the budget has reflected the directives of Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, who emphasised the need for attention to the social aspect and development of investment incentives, which contributed to the high ranking in global competitiveness,” said Abdul Rahman Saleh Al Saleh, Director General of Government of Dubai’s Department of finance.

The distribution of government expenditure focuses on human development. General and administrative expenses, capital expenditures and grants and subsidies accounted for 45 per cent of total government spending in 2016."



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Saudi Aramco official, three ministers to speak on budget | Reuters

Saudi Aramco official, three ministers to speak on budget | Reuters:

"A senior official of state oil giant Saudi Aramco and the ministers of Economy and Planning, Finance, and Water and Electricity will appear at a news conference on Saudi Arabia's 2016 state budget on Monday, official sources said on Sunday.

The news conference is scheduled for 1200 GMT on Monday and details of the budget are expected to be announced at or shortly before that time.

The ministers are expected to give presentations on their parts of the budget. The Maaal financial website reported that Aramco would be represented by chief executive Amin Nasser."



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MIDEAST STOCKS-Gulf markets advance ahead of Saudi budget; Egypt hit by rate hike | Reuters

MIDEAST STOCKS-Gulf markets advance ahead of Saudi budget; Egypt hit by rate hike | Reuters:

"Gulf stock markets edged higher on Sunday with Saudi Arabia rising in the final hour of trade as local traders bought back ahead of Monday's 2016 budget announcement. Egypt dropped in response to an interest rate hike.

The Saudi index closed 0.1 percent higher at 6,946 points, rebounding from a low of 6,874 points because of rises in stocks which investors hope will be largely unaffected by the Saudi budget, due to be announced on Monday afternoon.

To narrow a huge deficit caused by low oil prices, the budget is expected to contain spending cuts, possibly including a rise in natural gas feedstock prices for petrochemical producers such as Saudi Basic Industries. The stock fell 0.6 percent.

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Surge in Etisalat shares expected to last well into 2016 | The National

Surge in Etisalat shares expected to last well into 2016 | The National:

"The stellar rise of Etisalat shares this year, on the back of the loosening of foreign ownership restrictions and the inclusion of the stock in MSCI’s emerging market index, could continue well into 2016 with its inclusion in FTSE indexes and the expectation of a higher dividend to shareholders.

According to investment bank EFG-Hermes, while Etisalat’s valuation is at “punchy” levels following its almost 61 per cent rally year to date, it sees “any sizeable correction in share price as an opportunity to invest in the stock” because of appealing fundamentals including “one of the most balanced combinations of value and growth”.

The Abu Dhabi share index is down 6.3 per cent for the year to date, in contrast as lower oil prices and weakening emerging market sentiment weighed."



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Opec expects an oil future with smoother sailing | GulfNews.com

Opec expects an oil future with smoother sailing | GulfNews.com:

"The annual Opec’s World Oil Outlook (WOO) report has just been issued and gives pointers to the prospects for the energy industry in general and the oil market in particular up to the year 2040 as seen by researchers of the Secretariat.

Since the previous report which was issued in November 2014, oil prices have dropped from almost $80 (Dh294) a barrel to the current lows of $31.15 for the Opec basket of crude oils (ORB) and with persistent volatility expected to continue for some time to come. In his introduction to the report, Secretary-General Abdalla Salem Al Badri said: “The market instability has led to a number of projects being deferred or cancelled altogether, rig counts falling dramatically, costs being squeezed and redundancies being made. And the supply and demand balance in 2015 has been one of oversupply, with stock levels rising to well above the five-year average.”

This almost tells us the mood under which the report was prepared and that 2015 was a challenging year. In this column, the focus is on the oil market in general and succeeding ones will dwell on the other important aspects of energy markets and the downstream industry as well. The WOO ‘emphasises that oil will remain central to the global energy mix over the next 25 years”, with demand continuing to increase in developing countries and as the world’s population reaches a projected 9 billion and with an urbanisation of 63 per cent.

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GCC banking sector outlook stable despite oil decline | GulfNews.com

GCC banking sector outlook stable despite oil decline | GulfNews.com:

" The performance of the banking sector in terms of loan growth, asset quality and profitability are expected to remain resilient in 2016 amid deteriorating operating environment leading to tightening liquidity, according to bankers and analysts.

“Despite the headwinds generated by low oil prices, we expect a broadly supportive operating environment for GCC banks in 2016 due to regional governments’ commitment to their countercyclical spending policies,” said Khalid Howladar, a Senior Credit Officer at Moody’s based in Dubai.

“Events such as the UAE Expo 2020 and World Cup Qatar 2022 are providing anchors for capital expenditures in addition to other key regional infrastructure projects.”

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MIDEAST STOCKS-Saudi falls before budget, rate hike hits Egypt | Reuters

MIDEAST STOCKS-Saudi falls before budget, rate hike hits Egypt | Reuters:

"Saudi Arabia's stock market fell in early trade on Sunday ahead of the release of the state budget for 2016, while Egypt's market was hit by an interest rate hike.

The Saudi index fluctuated between positive and negative territory in the opening minutes before slipping 0.8 percent as the largest listed company, Saudi Basic Industries (SABIC), fell 1.2 percent.

The Saudi budget, due to be announced on Monday afternoon, is expected to contain spending cuts, possibly including a rise in natural gas feedstock prices for petrochemical producers such as SABIC."



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MIDEAST STOCKS-Blue chips push UAE, Qatar up in early trade | Reuters

MIDEAST STOCKS-Blue chips push UAE, Qatar up in early trade | Reuters:

"Blue chips pushed stock markets in the United Arab Emirates and Qatar higher early on Sunday, with a 2.8 percent jump by Emaar Properties boosting Dubai's index by 1.4 percent.

Trading volumes were modest with some foreign investors away for Christmas and New Year holidays, and aggressive buying deterred by uncertainty over the Saudi Arabian state budget, due to be announced on Monday afternoon.

Property stocks also supported the Abu Dhabi benchmark , which edged up 0.1 percent as Aldar Properties , the most heavily traded share, climbed 0.9 percent."



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