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Sunday, 4 December 2016

An accord that spells the beginning of the end for Opec

An accord that spells the beginning of the end for Opec:
"The deal agreed by Opec members this week will come to symbolise the passing of one of the world’s most powerful cartels. After 50 years in control of the oil price, Opec has submitted to the economic power of a much-changed global market. The deal represents the recognition of their own impotence by a group of countries that once held unchallenged power.

The agreement to cut production from January by 1.2m barrels a day raised prices on the world market by almost 10 per cent. The net result was a global price for Brent crude, the international benchmark, of $52 a barrel — up a few dollars from the previous day but still down almost 50 per cent from two years ago.

What should investors and consumers make of all this? First, consider the modesty of the increase in prices. This is not a deal capable of lifting prices to the level of $60 or $70 a barrel that is supposed to be Opec’s target. The market is obviously sceptical about delivery. Will Iran limit its production when it desperately needs increased output and revenue to sustain its economy? Will Russia actually cut output by 300,000 b/d? When did Russia last participate in an Opec quota exercise? Answer: never."

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Saudi prince’s ambition for life beyond oil forces Opec deal 

Saudi prince’s ambition for life beyond oil forces Opec deal :
"Opec’s production cut this week to bolster oil prices may strike many as a throwback to an earlier era, but it hinged on a very modern method of communication: a messaging group between the smartphones of Saudi Arabia’s delegation in Vienna and Prince Mohammed bin Salman al-Saud.

For a royal priding himself on being a tech savvy moderniser in the kingdom, the use of a popular encrypted messaging service may seem apt.

However, his involvement in directing the decision in Vienna illustrates a wider truth: Saudi Arabia’s oil policy is now closely entwined not just with the views of the young prince, who has quickly emerged as the most powerful and controversial figure in the kingdom’s economy, but also his political standing."

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Saudi Arabia discussed oil output cut with traders ahead of Opec

Saudi Arabia discussed oil output cut with traders ahead of Opec:
"Saudi Arabia convened private talks with the world’s largest oil traders in Vienna before Opec’s crunch meeting on whether to cut oil output, seeking views about the likely market reaction should they fail to clinch a deal, it has emerged.

Mark Couling, head of crude oil at Vitol, the world’s biggest independent oil trading company, was invited to Vienna by the Saudi delegation, according to people with knowledge of the talks.

Pierre Andurand, who runs the $1.5bn Andurand Capital fund, one of the world’s biggest oil hedge funds, was also invited, alongside at least one trader from Russian independent oil company, Lukoil."

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Abu Dhabi revamps boards of its state airport and tourism entities | Reuters

Abu Dhabi revamps boards of its state airport and tourism entities | Reuters:
"Abu Dhabi has revamped the boards of two key state-owned entities, Abu Dhabi Airports and the Tourism Development Investment Company (TDIC), which are handling some of the emirate's biggest development projects.

Company sources gave no reason for the changes, which occurred last month and replaced Ali Majed al-Mansouri, who had served as Abu Dhabi Airports chairman since 2012 and TDIC chairman since 2014.

Like other governments in the Gulf Arab region, Abu Dhabi, the wealthiest member of the United Arab Emirates federation, tends to shield its inner workings from the public eye and out of the media. Decisions such as personnel changes are often announced late, if at all."

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MIDEAST STOCKS-Saudi shares up in volatile session, Dubai outperforms | Reuters

MIDEAST STOCKS-Saudi shares up in volatile session, Dubai outperforms | Reuters:
"Most stock markets in the Gulf rose on Sunday as investors cheered a rally in crude oil prices, while foreign buyers continued to support Egypt's index.

Brent crude futures ended their best week in at least five years on Friday, settling at $54.46 a barrel following OPEC's agreement to cut output to prop up prices.

Saudi Arabia's general market index added 0.5 percent in heavy trade, taking its gains for the year to 3.2 percent. The index was down as much as 21.6 percent only nine weeks ago as the economy struggled with low oil prices."

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Caisse, DP World create $3.8b port venture | GulfNews.com

Caisse, DP World create $3.8b port venture | GulfNews.com:
"Caisse de Depot et Placement du Quebec, Canada’s second-largest pension fund manager, is teaming up with Dubai-based DP World Ltd to create a C$5 billion (Dh13.8 billion, $3.8 billion) venture that will invest in ports around the world, including regions such as Asia and Latin America.
DP World, which operates ports from China to South America, will own 55 per cent of the unnamed venture, with the Montreal-based Caisse controlling the remainder, according to a statement issued on Friday.
Caisse will begin by buying a 45 per cent stake in two of DP World’s Canadian container terminals in Vancouver and Prince Rupert, British Columbia for C$865 million."

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Dubai property not set for early recovery | GulfNews.com

Dubai property not set for early recovery | GulfNews.com:
"The Dubai property market will likely turn around at the end of 2017, but the recovery could be delayed depending on oil prices and the US dollar, an analyst told Gulf News.
The residential sector is currently not showing any real signs that accommodation costs, in both premium and affordable locations, are getting more expensive for the average tenant. In fact, rental declines are still increasing, owing largely to the general slowdown in the job market. What this means is that the era of cheap rents is more likely here to stay, at least until late next year.
There have been claims that the rate at which housing costs have fallen are easing or slowing down, with affordable neighbourhoods reportedly showing an uptick in rents. On the whole, however, rents are still on decline.
"

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Opec doesn’t hold all the cards, even after its oil price deal | Business | The Guardian

Opec doesn’t hold all the cards, even after its oil price deal | Business | The Guardian:
"Two years of wrangling were needed before Saudi Arabia and the rest of the Opec oil cartel could agree a cut in production at its meeting in Vienna last week.

Ever since the collapse in crude prices in 2014, the big oil-producing countries have plotted a way to regain control and improve their battered finances. But agreeing which countries would bear the pain of the steepest production cuts had proved an insurmountable challenge.

That barrier proved less formidable once prices stayed persistently low into 2016. With a recovery in the crude market nowhere in sight, finally one member after another fell into line at Vienna – and crucially Russia, a non-Opec producer, agreed to a cut of its own."

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