Oil prices fall 1% on U.S.-China trade doubts, OPEC+ talks - Reuters:
Oil prices fell about 1% on Thursday after a media report cast doubt on the possibility of an interim U.S.-China trade deal and as a meeting of the OPEC+ alliance yielded no decision on deepening crude supply cuts.
Oil was pressured further after the European Central Bank cut its deposit rate to a record low -0.5% from -0.4% and said it will restart bond purchases of 20 billion euros a month from November to prop up euro zone growth.
Brent crude LCOc1 futures settled at $60.38 a barrel, shedding 43 cents, or 0.71%. WTI crude CLc1 futures settled at $55.09 a barrel, losing 66 cents, or 1.18%.
Oil futures extended losses after a senior White House official denied a Bloomberg News report that the United States was considering a temporary trade agreement with China, according to CNBC.
Thursday 12 September 2019
Breakingviews - Some Aramco IPO banks look more equal than others - Reuters
Breakingviews - Some Aramco IPO banks look more equal than others - Reuters:
All Saudi Aramco’s listing advisers are equal, at least in name. The oil giant has hired nine banks to lead its revived initial public offering and given them the grand-sounding title of global coordinator, Reuters reported on Wednesday. That means they all get bragging rights. But they will not all be doing the same thing.
Hiring a boatload of investment banks is not unheard of, and with a market capitalisation of $1 trillion to $2 trillion Aramco will almost certainly become the world’s largest listed company. But that was the case back in 2017, when JPMorgan, Morgan Stanley and HSBC were the leading players. Now Bank of America Merrill Lynch, Goldman Sachs, Credit Suisse and Citigroup have been added to the roster, along with Saudi Arabian lenders National Commercial Bank and Samba Financial.
In practice, however, the three lead banks will have done most of the work already. It will be surprising if JPMorgan, whose Saudi relationships go back decades and which has comfortably topped Dealogic’s list of investment-bank revenue generators so far this year, does not remain the de facto top dog.
All Saudi Aramco’s listing advisers are equal, at least in name. The oil giant has hired nine banks to lead its revived initial public offering and given them the grand-sounding title of global coordinator, Reuters reported on Wednesday. That means they all get bragging rights. But they will not all be doing the same thing.
Hiring a boatload of investment banks is not unheard of, and with a market capitalisation of $1 trillion to $2 trillion Aramco will almost certainly become the world’s largest listed company. But that was the case back in 2017, when JPMorgan, Morgan Stanley and HSBC were the leading players. Now Bank of America Merrill Lynch, Goldman Sachs, Credit Suisse and Citigroup have been added to the roster, along with Saudi Arabian lenders National Commercial Bank and Samba Financial.
In practice, however, the three lead banks will have done most of the work already. It will be surprising if JPMorgan, whose Saudi relationships go back decades and which has comfortably topped Dealogic’s list of investment-bank revenue generators so far this year, does not remain the de facto top dog.
#Saudi Prince Abdulaziz: oil hawk with soft diplomacy touch - Reuters
Saudi Prince Abdulaziz: oil hawk with soft diplomacy touch - Reuters:
OPEC is notorious for arguing over production policies - but Prince Abdulaziz bin Salman has effectively managed to deliver his first output cut just four days after becoming the new Saudi energy minister.
With an impending listing of state oil giant Saudi Aramco and rising Saudi budget needs, the issue of higher oil prices is looming large for Prince Abdulaziz.
But when he first met fellow Gulf oil ministers and OPEC officials this week, his first message wasn’t about oil prices.
Prince Abdulaziz said first and foremost he was keen to rebuild trust with oil neighbors Kuwait, the United Arab Emirates, Oman and other OPEC members, sources familiar with the meetings in Abu Dhabi said.
OPEC is notorious for arguing over production policies - but Prince Abdulaziz bin Salman has effectively managed to deliver his first output cut just four days after becoming the new Saudi energy minister.
With an impending listing of state oil giant Saudi Aramco and rising Saudi budget needs, the issue of higher oil prices is looming large for Prince Abdulaziz.
But when he first met fellow Gulf oil ministers and OPEC officials this week, his first message wasn’t about oil prices.
Prince Abdulaziz said first and foremost he was keen to rebuild trust with oil neighbors Kuwait, the United Arab Emirates, Oman and other OPEC members, sources familiar with the meetings in Abu Dhabi said.
IEA warns Opec it faces huge oil surplus in 2020 | Financial Times
IEA warns Opec it faces huge oil surplus in 2020 | Financial Times:
Opec faces a growing surplus in the oil market next year that will push prices lower, the International Energy Agency said on Thursday, in a forecast likely to increase pressure on the Saudi Arabian oil minister to consider deeper production cuts.
The IEA monthly report said that, while the oil market will face a small deficit in the second half of this year, supplies are expected to surge later in 2019 and into 2020.
That will leave supplies outstripping demand for Opec’s crude by approximately 1.4m barrels a day in early 2020, the IEA said, if the group maintains current production levels.
Opec faces a growing surplus in the oil market next year that will push prices lower, the International Energy Agency said on Thursday, in a forecast likely to increase pressure on the Saudi Arabian oil minister to consider deeper production cuts.
The IEA monthly report said that, while the oil market will face a small deficit in the second half of this year, supplies are expected to surge later in 2019 and into 2020.
That will leave supplies outstripping demand for Opec’s crude by approximately 1.4m barrels a day in early 2020, the IEA said, if the group maintains current production levels.
Citigroup Sees Mideast, Africa Revenue Growth Even as Oil Weighs - Bloomberg
Citigroup Sees Mideast, Africa Revenue Growth Even as Oil Weighs - Bloomberg:
Citigroup Inc. expects revenue from its Middle East and Africa business to keep growing this year even as lower oil prices and political uncertainty weighs on the region.
“We typically do much better than the economic growth rate, given our business model,” Atiq Rehman, chief executive officer of Citigroup’s new EMEA emerging markets cluster, said in an interview. “I am cautiously optimistic on emerging markets” and falling interest rates in the U.S. will be positive overall.
The U.S. bank’s income in the region may rise by a high single-digit this year driven by its markets, cash management and investment banking businesses, Rehman said. Revenue growth may slow to a mid-single digit rate in 2020 after climbing at a compound annual rate of 10% in recent years.
Citigroup Inc. expects revenue from its Middle East and Africa business to keep growing this year even as lower oil prices and political uncertainty weighs on the region.
“We typically do much better than the economic growth rate, given our business model,” Atiq Rehman, chief executive officer of Citigroup’s new EMEA emerging markets cluster, said in an interview. “I am cautiously optimistic on emerging markets” and falling interest rates in the U.S. will be positive overall.
The U.S. bank’s income in the region may rise by a high single-digit this year driven by its markets, cash management and investment banking businesses, Rehman said. Revenue growth may slow to a mid-single digit rate in 2020 after climbing at a compound annual rate of 10% in recent years.
#Kuwait Finance Plans to Buy #Bahrain AUB in $8.8 Billion Deal - Bloomberg
Kuwait Finance Plans to Buy Bahrain AUB in $8.8 Billion Deal - Bloomberg:
Kuwait Finance House KSCP offered to buy Bahrain’s Ahli United Bank BSC in an all-share deal that’s valued at about $8.8 billion.
The Kuwaiti lender plans to issue 1 share for every 2.325581 shares of Ahli United, according to a statement. In January, the banks’ advisers had recommended the same swap ratio.
The combined entity will potentially become the Gulf’s sixth-biggest lender with $100 billion in assets and the deal value was based on the lenders’ closing price on Thursday. Kuwait Finance House shares have gained 27% this year to 707 fils, while AUB shares are up 51% to 94.1 U.S. cents.
Kuwait Finance House KSCP offered to buy Bahrain’s Ahli United Bank BSC in an all-share deal that’s valued at about $8.8 billion.
The Kuwaiti lender plans to issue 1 share for every 2.325581 shares of Ahli United, according to a statement. In January, the banks’ advisers had recommended the same swap ratio.
The combined entity will potentially become the Gulf’s sixth-biggest lender with $100 billion in assets and the deal value was based on the lenders’ closing price on Thursday. Kuwait Finance House shares have gained 27% this year to 707 fils, while AUB shares are up 51% to 94.1 U.S. cents.
Aramco 1% Stake Sale May Equal a Decade of #Saudi IPO Proceeds - Bloomberg
Aramco 1% Stake Sale May Equal a Decade of Saudi IPO Proceeds - Bloomberg:
If Saudi Arabia moves ahead with plans to float 1% of the world’s most profitable company, Saudi Aramco, it could raise proceeds equivalent to the last 10 years of initial public offerings in the country.
There are still moving parts in what could be a game-changing IPO, but this week the company selected banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., to work on the sale of a stake as soon as November, people with knowledge of the matter said.
The oil exploration company may start with a 1% stake in the domestic market, possibly adding another chunk later, before ultimately launching an overseas listing, they said. While Aramco’s valuation isn’t known, Crown Prince Mohammed bin Salman’s pegged it at about $2 trillion, a number many consider to be inflated. Bloomberg Intelligence, for example, estimates the value at about $1.1 trillion, while other analysts’ forecasts are around $1.5 trillion.
If Saudi Arabia moves ahead with plans to float 1% of the world’s most profitable company, Saudi Aramco, it could raise proceeds equivalent to the last 10 years of initial public offerings in the country.
There are still moving parts in what could be a game-changing IPO, but this week the company selected banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., to work on the sale of a stake as soon as November, people with knowledge of the matter said.
The oil exploration company may start with a 1% stake in the domestic market, possibly adding another chunk later, before ultimately launching an overseas listing, they said. While Aramco’s valuation isn’t known, Crown Prince Mohammed bin Salman’s pegged it at about $2 trillion, a number many consider to be inflated. Bloomberg Intelligence, for example, estimates the value at about $1.1 trillion, while other analysts’ forecasts are around $1.5 trillion.
MIDEAST STOCKS- #Saudi market extends losing streak, Egypt up again | Reuters.com
Columns | Reuters.com:
Saudi Arabian stocks widened losses on Thursday, having hit an eight-month low in the previous session, while Egypt's blue-chip index rose for a third day after inflation dropped to a multi-year low in August.
The Saudi index closed 0.3% down in its third straight day of losses. Riyad Bank shed 1.8% and the kingdom's largest lender, National Commercial Bank, lost 1.2%.
The market fell as much as 2.5% on Wednesday, wiping out all its gains this year before clawing back some losses to close 0.4% up in the year to date.
With Thursday's losses, the market is now trading only 0.1% higher than the start of the year.
Saudi Arabian stocks widened losses on Thursday, having hit an eight-month low in the previous session, while Egypt's blue-chip index rose for a third day after inflation dropped to a multi-year low in August.
The Saudi index closed 0.3% down in its third straight day of losses. Riyad Bank shed 1.8% and the kingdom's largest lender, National Commercial Bank, lost 1.2%.
The market fell as much as 2.5% on Wednesday, wiping out all its gains this year before clawing back some losses to close 0.4% up in the year to date.
With Thursday's losses, the market is now trading only 0.1% higher than the start of the year.
#UAE says output curb compliance will mean more oil removed from market - Reuters
UAE says output curb compliance will mean more oil removed from market - Reuters:
More oil will be removed from global markets if producers comply fully with agreed supply curbs, the United Arab Emirates energy minister said on Thursday.
“Additional volumes will be removed as a result of full conformity,” Minister of Energy and Industry Suhail al-Mazrouei told reporters after a meeting of some OPEC+ ministers in Abu Dhabi, which comes ahead of a formal gathering in December.
More oil will be removed from global markets if producers comply fully with agreed supply curbs, the United Arab Emirates energy minister said on Thursday.
“Additional volumes will be removed as a result of full conformity,” Minister of Energy and Industry Suhail al-Mazrouei told reporters after a meeting of some OPEC+ ministers in Abu Dhabi, which comes ahead of a formal gathering in December.
Oil prices fall after OPEC+ talks, ECB rate cut - Reuters
Oil prices fall after OPEC+ talks, ECB rate cut - Reuters:
Oil prices fell on Thursday after a meeting of the OPEC+ alliance yielded no decision on deepening supply cuts but focused instead on bringing Nigerian and Iraqi output down to their agreed quotas.
Oil came under further pressure after the European Central Bank cut its deposit rate to a record low -0.5% from -0.4% and said it will restart bond purchases of 20 billion euros a month from November to prop up euro zone growth.
Brent crude futures LCOc1 were down $1.20 cents at $59.61 a barrel by 1237 GMT. U.S. West Texas Intermediate futures CLc1 fell 96 cents to $54.79. Both were heading for a third session of losses.
Saudi Arabia’s new energy minister, Prince Abdulaziz bin Salman, said deeper cuts would not be decided before a meeting of the Organization of the Petroleum Exporting Countries planned for December.
Oil prices fell on Thursday after a meeting of the OPEC+ alliance yielded no decision on deepening supply cuts but focused instead on bringing Nigerian and Iraqi output down to their agreed quotas.
Oil came under further pressure after the European Central Bank cut its deposit rate to a record low -0.5% from -0.4% and said it will restart bond purchases of 20 billion euros a month from November to prop up euro zone growth.
Brent crude futures LCOc1 were down $1.20 cents at $59.61 a barrel by 1237 GMT. U.S. West Texas Intermediate futures CLc1 fell 96 cents to $54.79. Both were heading for a third session of losses.
Saudi Arabia’s new energy minister, Prince Abdulaziz bin Salman, said deeper cuts would not be decided before a meeting of the Organization of the Petroleum Exporting Countries planned for December.
#Saudi retailer BinDawood asks banks to pitch for IPO - sources - Reuters
Saudi retailer BinDawood asks banks to pitch for IPO - sources - Reuters:
Saudi Arabian retailer BinDawood Group has asked banks to pitch for roles in a potential initial public offering (IPO) of its supermarket business, two sources told Reuters, in a deal which may raise around 1.5 billion riyals ($399.9 million).
The group, which owns the Danube and BinDawood supermarket brands, has hired Moelis as an independent financial advisor, said the sources, who declined to be named because the talks are private.
The group aimed to appoint two joint global coordinators, one local and one international, and wanted to list on the Riyadh stock market at the beginning of 2020, the sources said.
Saudi Arabian retailer BinDawood Group has asked banks to pitch for roles in a potential initial public offering (IPO) of its supermarket business, two sources told Reuters, in a deal which may raise around 1.5 billion riyals ($399.9 million).
The group, which owns the Danube and BinDawood supermarket brands, has hired Moelis as an independent financial advisor, said the sources, who declined to be named because the talks are private.
The group aimed to appoint two joint global coordinators, one local and one international, and wanted to list on the Riyadh stock market at the beginning of 2020, the sources said.
MIDEAST STOCKS- #Saudi stocks extend losses led by banks, major Gulf markets slip - Reuters
MIDEAST STOCKS-Saudi stocks extend losses led by banks, major Gulf markets slip - Reuters:
Saudi Arabian stocks dropped further in early trading on Thursday, after hitting an eight-month low in the last session, with banks weighing most heavily on the index, while other major Gulf markets also traded lower.
The Saudi index was down 0.3%, down for a third straight session. The market fell as much as 2.5% on Wednesday, wiping out all its gains this year before clawing back some losses to close just 0.4% up year-to-date.
The market is now trading just 0.1% higher for the year. It jumped as much as 20% between January and May, led by foreign investors who have been net buyers every month this year as Saudi stocks joined the MSCI and FTSE Russell emerging market indexes.
Saudi Arabian stocks dropped further in early trading on Thursday, after hitting an eight-month low in the last session, with banks weighing most heavily on the index, while other major Gulf markets also traded lower.
The Saudi index was down 0.3%, down for a third straight session. The market fell as much as 2.5% on Wednesday, wiping out all its gains this year before clawing back some losses to close just 0.4% up year-to-date.
The market is now trading just 0.1% higher for the year. It jumped as much as 20% between January and May, led by foreign investors who have been net buyers every month this year as Saudi stocks joined the MSCI and FTSE Russell emerging market indexes.
U.S. Beats #SaudiArabia to Become Top Oil Exporter on Shale Boom - Bloomberg
U.S. Beats Saudi Arabia to Become Top Oil Exporter on Shale Boom - Bloomberg:
The U.S. briefly became the world’s No. 1 oil exporter as record shale production found its way to global customers, and there are prospects for more.
Surging output from shale helped America ship almost 9 million barrels a day of crude and oil products in June, surpassing Saudi Arabia, the International Energy Agency said in a report, citing gross export figures. There’s room to send even more supply overseas as companies add infrastructure to transport the burgeoning production from fields in Texas and New Mexico to the coast.
Gains in U.S. supply are undermining efforts by the Organization of Petroleum Exporting Countries and its allies, whose production cuts are in their third year in a bid to drain stockpiles. The swelling American output, as well as deepening concerns over global demand fueled by a prolonged U.S.-China trade war, have prompted a drop of almost 20% in benchmark Brent crude from an April high.
The U.S. briefly became the world’s No. 1 oil exporter as record shale production found its way to global customers, and there are prospects for more.
Surging output from shale helped America ship almost 9 million barrels a day of crude and oil products in June, surpassing Saudi Arabia, the International Energy Agency said in a report, citing gross export figures. There’s room to send even more supply overseas as companies add infrastructure to transport the burgeoning production from fields in Texas and New Mexico to the coast.
Gains in U.S. supply are undermining efforts by the Organization of Petroleum Exporting Countries and its allies, whose production cuts are in their third year in a bid to drain stockpiles. The swelling American output, as well as deepening concerns over global demand fueled by a prolonged U.S.-China trade war, have prompted a drop of almost 20% in benchmark Brent crude from an April high.
Aramco May Shun Direct IPO Marketing to U.S. Funds on Legal Risk - Bloomberg
Aramco May Shun Direct IPO Marketing to U.S. Funds on Legal Risk - Bloomberg:
Saudi Aramco is considering a structure for its initial public offering that would prevent it from marketing the deal directly to fund managers in the U.S., people with knowledge of the matter said.
The state-owned oil giant wants to avoid litigation risks that could result from selling the deal to U.S.-based institutions, according to the people, who asked not to be identified because the information is private. Aramco is consulting with its bankers on the pros and cons of different deal structures, and it hasn’t made any final decision, the people said.
Many foreign IPOs rely on the “Rule 144A” structure, which allows overseas companies to market offerings to institutional investors in the U.S. The method being considered by Aramco is a so-called “Regulation S only” transaction, which would limit it to selling stock to foreign buyers and overseas units of U.S. fund houses, the people said.
Saudi Aramco is considering a structure for its initial public offering that would prevent it from marketing the deal directly to fund managers in the U.S., people with knowledge of the matter said.
The state-owned oil giant wants to avoid litigation risks that could result from selling the deal to U.S.-based institutions, according to the people, who asked not to be identified because the information is private. Aramco is consulting with its bankers on the pros and cons of different deal structures, and it hasn’t made any final decision, the people said.
Many foreign IPOs rely on the “Rule 144A” structure, which allows overseas companies to market offerings to institutional investors in the U.S. The method being considered by Aramco is a so-called “Regulation S only” transaction, which would limit it to selling stock to foreign buyers and overseas units of U.S. fund houses, the people said.
Oil gains on signs of thaw in U.S.-China trade war, inventory fall - Reuters
Oil gains on signs of thaw in U.S.-China trade war, inventory fall - Reuters:
Oil prices rose on Thursday, recouping some of the heavy losses in the previous session, on signs of easing trade tensions between Washington and Beijing and a fall in U.S. crude stockpiles to their lowest in nearly a year.
Brent crude futures LCOc1 rose 23 cents, or 0.4%, to $61.04 a barrel by 0650 GMT. U.S. West Texas Intermediate (WTI) futures CLc1 was up 28 cents, or 0.5%, to $56.03 a barrel.
The rise came after China moved to exempt some U.S. anti-cancer drugs and other goods from tariffs and U.S. President Donald Trump announced a delay to scheduled tariff hikes on billions of dollars’ worth of Chinese goods.
Oil prices rose on Thursday, recouping some of the heavy losses in the previous session, on signs of easing trade tensions between Washington and Beijing and a fall in U.S. crude stockpiles to their lowest in nearly a year.
Brent crude futures LCOc1 rose 23 cents, or 0.4%, to $61.04 a barrel by 0650 GMT. U.S. West Texas Intermediate (WTI) futures CLc1 was up 28 cents, or 0.5%, to $56.03 a barrel.
The rise came after China moved to exempt some U.S. anti-cancer drugs and other goods from tariffs and U.S. President Donald Trump announced a delay to scheduled tariff hikes on billions of dollars’ worth of Chinese goods.
New #Saudi energy minister calls for OPEC 'cohesiveness'
New Saudi energy minister calls for OPEC 'cohesiveness':
Saudi Arabia’s new energy minister on Thursday reiterated calls for “cohesiveness” in OPEC ahead of a key meeting in Abu Dhabi.
“To achieve market stability, it’s imperative we maintain a high degree of cohesiveness within OPEC and within also our partners in OPEC,” said Prince Abdulaziz bin Salman, speaking at a meeting of the organization’s Joint Ministerial Monitoring Committee in Abu Dhabi, the capital of the United Arab Emirates.
Crude oil sold for over $100 a barrel in the summer of 2014 before bottoming out below $30 a barrel in January 2016. That fall largely came from a boom in U.S. shale oil and countries like Saudi Arabia keeping their production high to hold onto market share.
Saudi Arabia’s new energy minister on Thursday reiterated calls for “cohesiveness” in OPEC ahead of a key meeting in Abu Dhabi.
“To achieve market stability, it’s imperative we maintain a high degree of cohesiveness within OPEC and within also our partners in OPEC,” said Prince Abdulaziz bin Salman, speaking at a meeting of the organization’s Joint Ministerial Monitoring Committee in Abu Dhabi, the capital of the United Arab Emirates.
Crude oil sold for over $100 a barrel in the summer of 2014 before bottoming out below $30 a barrel in January 2016. That fall largely came from a boom in U.S. shale oil and countries like Saudi Arabia keeping their production high to hold onto market share.
RPT-UPDATE 1- #Saudi, Russia call for compliance with OPEC+ supply curbs - Reuters
RPT-UPDATE 1-Saudi, Russia call for compliance with OPEC+ supply curbs - Reuters:
The energy ministers of Saudi Arabia and Russia called on all producers to comply with oil output cuts under an OPEC-led supply deal, ahead of a meeting of a joint monitoring committee on Thursday.
Saudi Energy Minister Prince Abdulaziz bin Salman said every country should comply with the cuts to achieve market stability and cohesiveness among producers.
He said the course of action decided by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, would be shared after the committee meeting being held in the United Arab Emirates.
The energy ministers of Saudi Arabia and Russia called on all producers to comply with oil output cuts under an OPEC-led supply deal, ahead of a meeting of a joint monitoring committee on Thursday.
Saudi Energy Minister Prince Abdulaziz bin Salman said every country should comply with the cuts to achieve market stability and cohesiveness among producers.
He said the course of action decided by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, would be shared after the committee meeting being held in the United Arab Emirates.