London insurers extends Persian Gulf threat zone after Fujairah attacks | Financial Times:
London’s marine insurance market, which covers the majority of the world’s ships, has upgraded a number of territorial waters in the Persian Gulf to high risk following ship attacks off Fujairah last weekend.
The Joint War Committee, which includes representatives of Lloyd’s of London and the International Underwriters Association of London, said waters off Oman, UAE and the Persian Gulf had been added to a list of areas of “perceived enhanced risks” as they could not rule out further attacks.
The move may increase insurance premiums for oil tankers and other vessels operating near the Strait of Hormuz and the surrounding areas, a key oil choke point that has come under the spotlight as tensions between Saudi Arabia, the US and Iran have intensified.
Friday, 17 May 2019
Shale Overhead Costs Under Fire as Investors Drill Even Deeper - Bloomberg
Shale Overhead Costs Under Fire as Investors Drill Even Deeper - Bloomberg:
U.S. shale producers that have reined in growth plans to mollify investors are now facing increasing pressure to slash their own pay and gut bloated offices.
Almost all major U.S. explorers cut their capital budgets after oil prices fell at the end of 2018. The goal: Show they were willing to pay back shareholders at a time when their stocks were under-performing the broader market. But it didn’t stop there, investors are now increasingly focused on general and administrative budgets, or G&A, used for everyday costs.
Consider Fir Tree Partners, a hedge fund that’s aggressively targeted bloated cost structures at companies it’s invested in. Three small drillers -- Linn Energy LLC, Midstates Petroleum Co. and Amplify Energy Corp. -- responded by collectively cutting overhead by about $107 million from 2017 levels, according to Evan Lederman, a partner at the New York-based fund.
U.S. shale producers that have reined in growth plans to mollify investors are now facing increasing pressure to slash their own pay and gut bloated offices.
Almost all major U.S. explorers cut their capital budgets after oil prices fell at the end of 2018. The goal: Show they were willing to pay back shareholders at a time when their stocks were under-performing the broader market. But it didn’t stop there, investors are now increasingly focused on general and administrative budgets, or G&A, used for everyday costs.
Consider Fir Tree Partners, a hedge fund that’s aggressively targeted bloated cost structures at companies it’s invested in. Three small drillers -- Linn Energy LLC, Midstates Petroleum Co. and Amplify Energy Corp. -- responded by collectively cutting overhead by about $107 million from 2017 levels, according to Evan Lederman, a partner at the New York-based fund.
The Trade War Has Sunk Emerging Markets. There's More to Come. - Bloomberg
The Trade War Has Sunk Emerging Markets. There's More to Come. - Bloomberg:
Another week, another leg of the emerging-market rout.
An MSCI gauge of developing-nation stocks slipped 3.7%, setting the stage for the worst month since October. It was even worse for currencies, which capped a fifth straight week of declines, erasing gains for the year. Brazil’s real led the drop as protests added to political tensions and growth forecasts declined.
“There are no deadlines” for pressure on risky assets to ease, said Alejandro Cuadrado, a senior strategist at BBVA in New York. “Emerging currencies are starting to be quite cheap, but demand will be limited with uncertainty and the fact that even when we were pricing more benign scenarios, they didn’t perform.”
Another week, another leg of the emerging-market rout.
An MSCI gauge of developing-nation stocks slipped 3.7%, setting the stage for the worst month since October. It was even worse for currencies, which capped a fifth straight week of declines, erasing gains for the year. Brazil’s real led the drop as protests added to political tensions and growth forecasts declined.
“There are no deadlines” for pressure on risky assets to ease, said Alejandro Cuadrado, a senior strategist at BBVA in New York. “Emerging currencies are starting to be quite cheap, but demand will be limited with uncertainty and the fact that even when we were pricing more benign scenarios, they didn’t perform.”
Oil slips but ends week higher on Mideast supply disruption fears - Reuters
Oil slips but ends week higher on Mideast supply disruption fears - Reuters:
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-U.S. trade talks, but both benchmarks ended the week higher on rising concerns over supply disruptions in Middle East shipments due to U.S.-Iran political tensions.
Iran said on Friday it could “easily” hit U.S. warships in the Gulf, the latest in days of sabre-rattling between Washington and Tehran, while its top diplomat worked to counter U.S. sanctions and salvage a nuclear deal denounced by President Donald Trump.
U.S. sanctions on Iran have already cut the OPEC member’s crude exports further in May, adding to supply curbs implemented through an OPEC-led pact for the first six months of the year.
Brent crude fell 41 cents, or 0.6%, to settle at $72.21 a barrel. The global benchmark notched a weekly gain of about 2%, having ended last week largely steady and fallen the week before.
U.S. West Texas Intermediate crude fell 11 cents to end the session at $62.76, and gained about 1.7% on the week.
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-U.S. trade talks, but both benchmarks ended the week higher on rising concerns over supply disruptions in Middle East shipments due to U.S.-Iran political tensions.
Iran said on Friday it could “easily” hit U.S. warships in the Gulf, the latest in days of sabre-rattling between Washington and Tehran, while its top diplomat worked to counter U.S. sanctions and salvage a nuclear deal denounced by President Donald Trump.
U.S. sanctions on Iran have already cut the OPEC member’s crude exports further in May, adding to supply curbs implemented through an OPEC-led pact for the first six months of the year.
Brent crude fell 41 cents, or 0.6%, to settle at $72.21 a barrel. The global benchmark notched a weekly gain of about 2%, having ended last week largely steady and fallen the week before.
U.S. West Texas Intermediate crude fell 11 cents to end the session at $62.76, and gained about 1.7% on the week.
Physical Oil Traders Are Clamoring for Barrels as Risks Multiply - Bloomberg
Physical Oil Traders Are Clamoring for Barrels as Risks Multiply - Bloomberg:
From Colombia to the North Sea, the Middle East to Texas, the global market for crude cargoes is becoming tighter by the week as supplies grow more constrained and risks to production spiral.
Prices for actual barrels from the North Sea, Asia, and the Americas are now trading at the highest in half a decade. Key price spreads that show how urgently oil refineries need benchmark Brent barrels are soaring.
It’s little wonder: as the list of known supply curbs and disruptions grows, traders are now also having to contend with mounting tensions in the Persian Gulf, the world’s largest export region. On Tuesday, drones attacked -- and temporarily halted -- a giant Saudi Arabian pipeline. Two days before that, four oil tankers were sabotaged at the key refueling port of Fujairah in the U.A.E.
From Colombia to the North Sea, the Middle East to Texas, the global market for crude cargoes is becoming tighter by the week as supplies grow more constrained and risks to production spiral.
Prices for actual barrels from the North Sea, Asia, and the Americas are now trading at the highest in half a decade. Key price spreads that show how urgently oil refineries need benchmark Brent barrels are soaring.
It’s little wonder: as the list of known supply curbs and disruptions grows, traders are now also having to contend with mounting tensions in the Persian Gulf, the world’s largest export region. On Tuesday, drones attacked -- and temporarily halted -- a giant Saudi Arabian pipeline. Two days before that, four oil tankers were sabotaged at the key refueling port of Fujairah in the U.A.E.
#SouthSudan Concerned #Sudan's Turmoil Could Hurt its Oil Exports - Bloomberg
South Sudan Concerned Sudan's Turmoil Could Hurt its Oil Exports - Bloomberg:
South Sudan, recovering from a civil war in which 400,000 people died and and a quarter of the population was displaced, is concerned that an uprising in neighboring Sudan could threaten its oil exports, choking off its economic lifeline.
Two pipelines deliver about 175,000 barrels of oil a day to a port in Sudan, the country from which South Sudan seceded in 2011, according to the nation’s Oil Minister Ezekiel Gatkuoth. While Sudan’s President Omar al-Bashir was ousted after popular protests, the military, which is running the country, is at loggerheads with the opposition over who should rule.
“What is happening in Sudan now is concerning me,’’ Gatkuoth said in an interview in Bloomberg’s office in Johannesburg. South Sudan’s president has sent him to meet with officials “to make sure that the port where we are having our oil transported to the international market is secured,” he said. Transport of drilling chemicals used for production could also potentially be interrupted.
South Sudan, recovering from a civil war in which 400,000 people died and and a quarter of the population was displaced, is concerned that an uprising in neighboring Sudan could threaten its oil exports, choking off its economic lifeline.
Two pipelines deliver about 175,000 barrels of oil a day to a port in Sudan, the country from which South Sudan seceded in 2011, according to the nation’s Oil Minister Ezekiel Gatkuoth. While Sudan’s President Omar al-Bashir was ousted after popular protests, the military, which is running the country, is at loggerheads with the opposition over who should rule.
“What is happening in Sudan now is concerning me,’’ Gatkuoth said in an interview in Bloomberg’s office in Johannesburg. South Sudan’s president has sent him to meet with officials “to make sure that the port where we are having our oil transported to the international market is secured,” he said. Transport of drilling chemicals used for production could also potentially be interrupted.
Indebted #Lebanon may struggle to refinance as austerity budget stalls - Reuters
Indebted Lebanon may struggle to refinance as austerity budget stalls - Reuters:
Lebanon’s impasse in agreeing a credible fiscal reform plan and deteriorating global market conditions means it may struggle to refinance key foreign currency debts coming due this year, unnerving overseas investors.
Outright default can likely be averted in the short-term by a government financing manoeuvre involving the central bank and local banks, the main holders of its debt. But this is only likely to be a stopgap and many foreign funds contacted said they would be reluctant to delve into new Lebanese Eurobonds until they assess reforms.
Lebanon’s impasse in agreeing a credible fiscal reform plan and deteriorating global market conditions means it may struggle to refinance key foreign currency debts coming due this year, unnerving overseas investors.
Outright default can likely be averted in the short-term by a government financing manoeuvre involving the central bank and local banks, the main holders of its debt. But this is only likely to be a stopgap and many foreign funds contacted said they would be reluctant to delve into new Lebanese Eurobonds until they assess reforms.
Oil set for weekly gain on threat of Mideast supply disruptions - Reuters
Oil set for weekly gain on threat of Mideast supply disruptions - Reuters:
Oil prices steadied on Friday, with both benchmarks on track for a weekly gain on rising concerns over potential further supply disruptions in Middle East shipments due to U.S.-Iran political tensions.
Iran said on Friday it could “easily” hit U.S. warships in the Gulf, the latest in days of sabre-rattling between Washington and Tehran, while its top diplomat worked to counter U.S. sanctions and salvage a nuclear deal denounced by President Donald Trump.
U.S. sanctions on Iran have already cut the OPEC member’s crude exports further in May, adding to supply curbs implemented through an OPEC-led pact for the first six months of the year.
Brent crude was up 5 cents at $72.67 a barrel by 11:21 a.m. EDT (1521 GMT). The global benchmark was set to rise nearly 3 percent this week, having ended last week largely steady and fallen the week before.
U.S. West Texas Intermediate crude added 48 cents to $63.35, and was on track for a weekly gain of about 2.7 percent.
Oil prices steadied on Friday, with both benchmarks on track for a weekly gain on rising concerns over potential further supply disruptions in Middle East shipments due to U.S.-Iran political tensions.
Iran said on Friday it could “easily” hit U.S. warships in the Gulf, the latest in days of sabre-rattling between Washington and Tehran, while its top diplomat worked to counter U.S. sanctions and salvage a nuclear deal denounced by President Donald Trump.
U.S. sanctions on Iran have already cut the OPEC member’s crude exports further in May, adding to supply curbs implemented through an OPEC-led pact for the first six months of the year.
Brent crude was up 5 cents at $72.67 a barrel by 11:21 a.m. EDT (1521 GMT). The global benchmark was set to rise nearly 3 percent this week, having ended last week largely steady and fallen the week before.
U.S. West Texas Intermediate crude added 48 cents to $63.35, and was on track for a weekly gain of about 2.7 percent.
Middle East Is Not in A Crisis Right Now: Credit Suisse’s Abib – Bloomberg
Middle East Is Not in A Crisis Right Now: Credit Suisse’s Abib – Bloomberg:
Oil soared to a two-week high as Saudi Arabia accused Iran of ordering this week’s attack on its key oil facilities, fueling tensions between two of the world’s oil-producing superpowers. While Saudi’s pipeline has reopened, officials from all sides are warning that a string of recent events have pushed the region closer to a potentially devastating conflict. Osmar Abib, chairman of global energy at Credit Suisse, and Ellen Wald, a senior fellow at the Atlantic Council’s Global Energy Center and author of "Saudi, Inc", talk with Bloomberg's Alix Steel about the tensions in the Middle East. (Source: Bloomberg_TV)
Oil soared to a two-week high as Saudi Arabia accused Iran of ordering this week’s attack on its key oil facilities, fueling tensions between two of the world’s oil-producing superpowers. While Saudi’s pipeline has reopened, officials from all sides are warning that a string of recent events have pushed the region closer to a potentially devastating conflict. Osmar Abib, chairman of global energy at Credit Suisse, and Ellen Wald, a senior fellow at the Atlantic Council’s Global Energy Center and author of "Saudi, Inc", talk with Bloomberg's Alix Steel about the tensions in the Middle East. (Source: Bloomberg_TV)
Veteran Lawyer Says Emerging-Market Debt Is Headed for Trouble - Bloomberg
Veteran Lawyer Says Emerging-Market Debt Is Headed for Trouble - Bloomberg:
For developing countries facing down creditors, Lee Buchheit was the cavalry. During his 43-year career at Cleary Gottlieb Steen & Hamilton LLP, the quick-witted restructuring lawyer gained a reputation for shattering investors’ dreams of sky-high returns.
Buchheit, 68, brought arcane legal terms such as collective action clauses and asset protection orders into modern debt markets. He deployed the former to spur a settlement for Greece, enabling a supermajority of creditors to forge an agreement that was binding on all bondholders. Buchheit applied the latter in Iraq to force U.S. investors to divest from local assets.
Now retired from Cleary, the Pittsburgh native has a frightening prognosis for the coming decade: He foresees the biggest string of defaults since the early 1980s. He blames the rise of bullet bonds, noncallable debt instruments that pay back the entire principal at the final maturity date. In an interview, Buchheit spoke about what he’s learned over his career and the restructurings he sees on the horizon.
For developing countries facing down creditors, Lee Buchheit was the cavalry. During his 43-year career at Cleary Gottlieb Steen & Hamilton LLP, the quick-witted restructuring lawyer gained a reputation for shattering investors’ dreams of sky-high returns.
Buchheit, 68, brought arcane legal terms such as collective action clauses and asset protection orders into modern debt markets. He deployed the former to spur a settlement for Greece, enabling a supermajority of creditors to forge an agreement that was binding on all bondholders. Buchheit applied the latter in Iraq to force U.S. investors to divest from local assets.
Now retired from Cleary, the Pittsburgh native has a frightening prognosis for the coming decade: He foresees the biggest string of defaults since the early 1980s. He blames the rise of bullet bonds, noncallable debt instruments that pay back the entire principal at the final maturity date. In an interview, Buchheit spoke about what he’s learned over his career and the restructurings he sees on the horizon.
OPEC and Allies Both Complied With Oil-Cuts Agreement in April
OPEC and Allies Both Complied With Oil-Cuts Agreement in April:
OPEC and its partners are once again cutting production as promised in their effort to steady the market. In April both sides of the so-called OPEC+ alliance complied with their supply pact for the first time 16 months. Field maintenance in Kazakhstan made a huge contribution to non-OPEC producers’ collective conformity, while the Organization of Petroleum Exporting Countries continued its commitment to the curbs. Here’s a look at the broader picture.
Non-OPEC compliance soared to 151% last month, compared with 61% in March, International Energy Agency data show. OPEC adherence remained strong—also at 151%—versus 158% previously, according to Bloomberg calculations. The last time OPEC and its partners jointly complied with their agreement was December 2017.
The alliance began its effort to reduce oil supplies at the start of 2017 but reset the terms of the accord as of this past January. OPEC members Libya, Iran and Venezuela have also been exempt since the beginning of the year. See the tables below for a look at how the agreement has changed since 2017.
OPEC and its partners are once again cutting production as promised in their effort to steady the market. In April both sides of the so-called OPEC+ alliance complied with their supply pact for the first time 16 months. Field maintenance in Kazakhstan made a huge contribution to non-OPEC producers’ collective conformity, while the Organization of Petroleum Exporting Countries continued its commitment to the curbs. Here’s a look at the broader picture.
Non-OPEC compliance soared to 151% last month, compared with 61% in March, International Energy Agency data show. OPEC adherence remained strong—also at 151%—versus 158% previously, according to Bloomberg calculations. The last time OPEC and its partners jointly complied with their agreement was December 2017.
The alliance began its effort to reduce oil supplies at the start of 2017 but reset the terms of the accord as of this past January. OPEC members Libya, Iran and Venezuela have also been exempt since the beginning of the year. See the tables below for a look at how the agreement has changed since 2017.
#UAE, keen to maintain safe-haven image, tempers tanker attack response - Reuters
UAE, keen to maintain safe-haven image, tempers tanker attack response - Reuters:
The United Arab Emirates, though a prominent foe of Iran in the Middle East’s power struggles, has tempered its reaction to attacks on oil tankers off its coast in an effort to protect its reputation as a safe and stable business hub.
While its close ally Saudi Arabia unleashed a barrage of tweets accusing their mutual enemy of ordering drone strikes on its oil installations on Tuesday, the UAE held off blaming anyone for Sunday’s attacks pending an investigation.
Abu Dhabi pledged restraint and de-escalation during what it called a “difficult situation” caused by Iranian behavior in the region.
The United Arab Emirates, though a prominent foe of Iran in the Middle East’s power struggles, has tempered its reaction to attacks on oil tankers off its coast in an effort to protect its reputation as a safe and stable business hub.
While its close ally Saudi Arabia unleashed a barrage of tweets accusing their mutual enemy of ordering drone strikes on its oil installations on Tuesday, the UAE held off blaming anyone for Sunday’s attacks pending an investigation.
Abu Dhabi pledged restraint and de-escalation during what it called a “difficult situation” caused by Iranian behavior in the region.
Oil lifted toward $73 by real and threatened supply cuts - Reuters
Oil lifted toward $73 by real and threatened supply cuts - Reuters:
Oil edged higher toward $73 a barrel on Friday, supported by real and threatened supply disruptions in the Middle East and heading for a weekly gain.
U.S. sanctions on Iran have cut the OPEC member’s crude exports further in May, adding to supply curbs resulting from an OPEC-led pact. Meanwhile, rising tensions in the Middle East this week has raised concern about additional supply disruption.
Brent crude rose 15 cents to $72.77 a barrel at 0908 GMT. The global benchmark is up almost 3 percent this week, having ended last week steady and fallen the week before. U.S. West Texas Intermediate crude added 24 cents to $63.11.
Oil edged higher toward $73 a barrel on Friday, supported by real and threatened supply disruptions in the Middle East and heading for a weekly gain.
U.S. sanctions on Iran have cut the OPEC member’s crude exports further in May, adding to supply curbs resulting from an OPEC-led pact. Meanwhile, rising tensions in the Middle East this week has raised concern about additional supply disruption.
Brent crude rose 15 cents to $72.77 a barrel at 0908 GMT. The global benchmark is up almost 3 percent this week, having ended last week steady and fallen the week before. U.S. West Texas Intermediate crude added 24 cents to $63.11.
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