Column: Fear of China virus outstrips crude oil supply outages: Russell - Reuters:
A question for the crude oil market. Why is the potential loss of a few hundred thousand barrels per day of demand from the coronavirus in China more important than the actual loss of about 1 million bpd of supply from Libya?
Benchmark Brent crude futures LCOc1 have slumped around 10% since Jan. 20, the last day prices rose before the current losing streak, with the contract ending at $59.32 a barrel on Monday, the weakest close in three months.
The hit to oil prices has come as the number of cases of the new coronavirus outbreak, centered around the Chinese city of Wuhan, has soared and the disease has spread to several other countries.
At least 106 people have died and more than 2,800 have been infected with the virus, and Chinese authorities have effectively locked down Wuhan, a city of some 10 million people, and several other cities.
Tuesday 28 January 2020
Oil edges up as stock markets rebound after virus-related selloff - Reuters
Oil edges up as stock markets rebound after virus-related selloff - Reuters:
Oil futures edged up on Tuesday after falling for five days, gaining support from a rebound in Wall Street stocks and talk that OPEC and its allies might tighten the market amid fears the coronavirus could weigh on oil demand.
U.S. stocks rose as gains in technology and financial shares helped major indexes recover from their biggest selloff in about four months on worries over a coronavirus outbreak and its possible impact on global growth.
Brent LCOc1 futures rose 19 cents, or 0.3%, to $59.51 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 gained 34 cents, or 0.6%, to $53.48.
“The bulk of today’s oil market advance appeared to reflect spillover from the strong rebound in the equities,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report, noting the strong dollar also restricted “buying enthusiasm in the energy complex.”
Oil futures edged up on Tuesday after falling for five days, gaining support from a rebound in Wall Street stocks and talk that OPEC and its allies might tighten the market amid fears the coronavirus could weigh on oil demand.
U.S. stocks rose as gains in technology and financial shares helped major indexes recover from their biggest selloff in about four months on worries over a coronavirus outbreak and its possible impact on global growth.
Brent LCOc1 futures rose 19 cents, or 0.3%, to $59.51 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 gained 34 cents, or 0.6%, to $53.48.
“The bulk of today’s oil market advance appeared to reflect spillover from the strong rebound in the equities,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report, noting the strong dollar also restricted “buying enthusiasm in the energy complex.”
Adnoc’s $15 Billion Gas Pipeline Said to Attract BlackRock, GIP - Bloomberg
Adnoc’s $15 Billion Gas Pipeline Said to Attract BlackRock, GIP - Bloomberg:
BlackRock Inc., Global Infrastructure Partners and KKR & Co. are among suitors considering bidding for a stake in natural gas pipelines being sold by Abu Dhabi’s state-owned energy giant, people familiar with the matter said.
Australia’s IFM Investors Pty and Ontario Teachers’ Pension Plan are also weighing offers for a stake in Abu Dhabi National Oil Co.’s gas pipeline unit, according to the people. A deal could value the business at as much as $15 billion including debt, the people said, asking not to be identified because the information is private.
The oil giant expects to receive first-round bids in mid-February, the people said. Adnoc is seeking to sell as much as 49% of the business through a lease structure, according to the people.
Abu Dhabi, the capital of the United Arab Emirates, is among Persian Gulf oil producers that are opening up their operations to outside investment to attract fresh capital and diversify their economies. Adnoc has raised billions of dollars by bringing in partners for businesses including its refining unit and drilling business.
BlackRock Inc., Global Infrastructure Partners and KKR & Co. are among suitors considering bidding for a stake in natural gas pipelines being sold by Abu Dhabi’s state-owned energy giant, people familiar with the matter said.
Australia’s IFM Investors Pty and Ontario Teachers’ Pension Plan are also weighing offers for a stake in Abu Dhabi National Oil Co.’s gas pipeline unit, according to the people. A deal could value the business at as much as $15 billion including debt, the people said, asking not to be identified because the information is private.
The oil giant expects to receive first-round bids in mid-February, the people said. Adnoc is seeking to sell as much as 49% of the business through a lease structure, according to the people.
Abu Dhabi, the capital of the United Arab Emirates, is among Persian Gulf oil producers that are opening up their operations to outside investment to attract fresh capital and diversify their economies. Adnoc has raised billions of dollars by bringing in partners for businesses including its refining unit and drilling business.
Brent crude steadies just under $60/bbl, China oil demand in focus - Reuters
Brent crude steadies just under $60/bbl, China oil demand in focus - Reuters:
Oil futures steadied somewhat on Tuesday after a five-day losing streak as OPEC sources said the group and its allies might tighten the market amid fears that the coronavirus, which has claimed over 100 lives in China, could weigh on oil demand.
Brent crude LCOc1, which oscillated between positive and negative territory during European trading, was down 20 cents at $59.12 a barrel at 1416 GMT, having hit a three-month low of $58.50 on Monday. [MKTS/GLOB]
U.S. West Texas Intermediate CLc1 rose 7 cents to $53.21 a barrel, after slipping to its lowest since early October in the previous session. Both contracts are still on track for their worst monthly falls since May.
Oil futures steadied somewhat on Tuesday after a five-day losing streak as OPEC sources said the group and its allies might tighten the market amid fears that the coronavirus, which has claimed over 100 lives in China, could weigh on oil demand.
Brent crude LCOc1, which oscillated between positive and negative territory during European trading, was down 20 cents at $59.12 a barrel at 1416 GMT, having hit a three-month low of $58.50 on Monday. [MKTS/GLOB]
U.S. West Texas Intermediate CLc1 rose 7 cents to $53.21 a barrel, after slipping to its lowest since early October in the previous session. Both contracts are still on track for their worst monthly falls since May.
#Kuwait's KFH plans to drop assets of about 100 million dinars this year - CEO - Reuters
Kuwait's KFH plans to drop assets of about 100 million dinars this year - CEO - Reuters:
Kuwait Finance House (KFH) , the country’s largest Islamic bank, plans to shed assets worth about 100 million dinars ($329.5 million) in 2020 as it finalises the acquisition of Bahrain’s Ahli United Bank .
The step to exit assets including real estate, stocks and other direct investments comes “as part of KFH’s strategy to focus on the core business” of the bank, CEO Mazin Al-Nahedh said on Tuesday.
He said no profit would likely be made from the exits.
KFH has sold assets worth 137 million dinars in 2019 and achieved a profit of 40.1 million dinars, Nahedh said.
Kuwait Finance House (KFH) , the country’s largest Islamic bank, plans to shed assets worth about 100 million dinars ($329.5 million) in 2020 as it finalises the acquisition of Bahrain’s Ahli United Bank .
The step to exit assets including real estate, stocks and other direct investments comes “as part of KFH’s strategy to focus on the core business” of the bank, CEO Mazin Al-Nahedh said on Tuesday.
He said no profit would likely be made from the exits.
KFH has sold assets worth 137 million dinars in 2019 and achieved a profit of 40.1 million dinars, Nahedh said.
OPEC aims to extend oil output cuts through June, alarmed by China virus - Reuters
OPEC aims to extend oil output cuts through June, alarmed by China virus - Reuters:
OPEC wants to extend current oil output cuts until at least June, with the possibility of deeper reductions on the table if oil demand in China is significantly impacted by the spread of a new coronavirus, OPEC sources said.
The quick slide in oil prices over the past few days has alarmed OPEC officials, the sources say, as the new virus found in China and several other countries raised concerns about a hit to economic growth and oil demand.
Oil futures were on course for a sixth day of losses with Brent crude staying below $60 per barrel. On Monday it hit a three-month low of $58.50, as the virus outbreak triggered a global selloff of riskier assets.
Saudi Arabia, OPEC’s de-facto leader, joined by key oil producers such as the United Arab Emirates, Algeria and Oman, sought to calm market jitters on Monday - urging caution against gloomy expectations on the impact of the virus on the global economy and oil demand.
OPEC wants to extend current oil output cuts until at least June, with the possibility of deeper reductions on the table if oil demand in China is significantly impacted by the spread of a new coronavirus, OPEC sources said.
The quick slide in oil prices over the past few days has alarmed OPEC officials, the sources say, as the new virus found in China and several other countries raised concerns about a hit to economic growth and oil demand.
Oil futures were on course for a sixth day of losses with Brent crude staying below $60 per barrel. On Monday it hit a three-month low of $58.50, as the virus outbreak triggered a global selloff of riskier assets.
Saudi Arabia, OPEC’s de-facto leader, joined by key oil producers such as the United Arab Emirates, Algeria and Oman, sought to calm market jitters on Monday - urging caution against gloomy expectations on the impact of the virus on the global economy and oil demand.
Mideast Stocks: Corporate earnings lift #UAE; other major markets extend losses | ZAWYA MENA Edition
Mideast Stocks: Corporate earnings lift UAE; other major markets extend losses | ZAWYA MENA Edition:
Stock markets in the United Arab Emirates rose on Tuesday as positive corporate earnings outweighed pessimism about the coronavirus outbreak in China, while other major markets extended losses.
The Abu Dhabi index ended 0.2% hhigher, supported by a 7.2% surge in International Holding Company before its board meeting on Wednesday to approve fiscal-year earnings.
First Abu Dhabi Bank added 0.3% after posting a 5% increase in fourth-quarter profit. The United Arab Emirates' largest bank recorded a net profit of 3.08 billion dirhams ($838.60 million) in the fourth quarter, compared with 2.93 billion year ago.
Dubai's main share index edged up 0.1%, ending four days of losses as National Central Cooling Co (Tabreed) jumped 6.3%, its biggest intraday gain since December 2018.
Tabreed's annual profit rose more than 10% to 472.5 million dirhams and proposed a cash dividend of 10.5 fils per share for the year 2019.
Stock markets in the United Arab Emirates rose on Tuesday as positive corporate earnings outweighed pessimism about the coronavirus outbreak in China, while other major markets extended losses.
The Abu Dhabi index ended 0.2% hhigher, supported by a 7.2% surge in International Holding Company before its board meeting on Wednesday to approve fiscal-year earnings.
First Abu Dhabi Bank added 0.3% after posting a 5% increase in fourth-quarter profit. The United Arab Emirates' largest bank recorded a net profit of 3.08 billion dirhams ($838.60 million) in the fourth quarter, compared with 2.93 billion year ago.
Dubai's main share index edged up 0.1%, ending four days of losses as National Central Cooling Co (Tabreed) jumped 6.3%, its biggest intraday gain since December 2018.
Tabreed's annual profit rose more than 10% to 472.5 million dirhams and proposed a cash dividend of 10.5 fils per share for the year 2019.
Oil turns positive after five-day rout as OPEC might act - Reuters
Oil turns positive after five-day rout as OPEC might act - Reuters:
Oil futures on Tuesday broke a five-day losing streak after OPEC sources said the group and its allies might tighten the market amid fears that the coronavirus which has claimed over 100 lives in China, might weigh on oil demand.
Brent crude LCOc1 reversed earlier losses to trade up 18 cents at $59.50 a barrel at 1245 GMT, after having hit a three-month low of $58.50 on Monday. [MKTS/GLOB]
U.S. West Texas Intermediate CLc1 rose 30 cents at $53.44 a barrel, after slipping to its lowest since early October in the previous session. Both contracts are still on track for their worst monthly falls since May.
Oil futures on Tuesday broke a five-day losing streak after OPEC sources said the group and its allies might tighten the market amid fears that the coronavirus which has claimed over 100 lives in China, might weigh on oil demand.
Brent crude LCOc1 reversed earlier losses to trade up 18 cents at $59.50 a barrel at 1245 GMT, after having hit a three-month low of $58.50 on Monday. [MKTS/GLOB]
U.S. West Texas Intermediate CLc1 rose 30 cents at $53.44 a barrel, after slipping to its lowest since early October in the previous session. Both contracts are still on track for their worst monthly falls since May.
Virus panic makes OPEC cat-herding even harder – Breakingviews
Virus panic makes OPEC cat-herding even harder – Breakingviews:
Oil prices are packing a year’s worth of ructions into less than two months. Brent crude futures soared from just above $60 a barrel in early December to $70 a month later, amid supply fears following the U.S. drone strike on Iranian general Qassem Soleimani. They’ve now slumped below $60 on fears of a coronavirus-linked demand implosion – and rendered the job of the producer club that nominally controls oil prices much harder.
The Organization of the Petroleum Exporting Countries had looked to be in control. In early December, Saudi Arabia’s oil minister Prince Abdulaziz bin Salman managed to get the 14 members of OPEC and 10 more allies collectively known as OPEC+ to increase pre-existing cuts amounting to 1.2 million barrels per day to as much as 2.1 million bpd. The unity of purpose reflected concern about a price-sapping period of supply outstripping demand. Even after the cuts, the market could be 0.7 million bpd oversupplied in the first half of 2020, Jefferies reckons.
Still, as Saudi well knows, managing OPEC is like herding cats. There’s no guarantee that producers will do what they say – Nigeria is just one of several perennial agreement-flouters. Russia, the world’s second-largest producer, is already irked at having to pump less, given its budget breaks even with oil prices below $50 a barrel, against $80 for Saudi. Hence December’s cuts were only agreed until March.
Oil prices are packing a year’s worth of ructions into less than two months. Brent crude futures soared from just above $60 a barrel in early December to $70 a month later, amid supply fears following the U.S. drone strike on Iranian general Qassem Soleimani. They’ve now slumped below $60 on fears of a coronavirus-linked demand implosion – and rendered the job of the producer club that nominally controls oil prices much harder.
The Organization of the Petroleum Exporting Countries had looked to be in control. In early December, Saudi Arabia’s oil minister Prince Abdulaziz bin Salman managed to get the 14 members of OPEC and 10 more allies collectively known as OPEC+ to increase pre-existing cuts amounting to 1.2 million barrels per day to as much as 2.1 million bpd. The unity of purpose reflected concern about a price-sapping period of supply outstripping demand. Even after the cuts, the market could be 0.7 million bpd oversupplied in the first half of 2020, Jefferies reckons.
Still, as Saudi well knows, managing OPEC is like herding cats. There’s no guarantee that producers will do what they say – Nigeria is just one of several perennial agreement-flouters. Russia, the world’s second-largest producer, is already irked at having to pump less, given its budget breaks even with oil prices below $50 a barrel, against $80 for Saudi. Hence December’s cuts were only agreed until March.
Barclays sees $2/bbl impact to oil prices as virus fears threaten demand - Reuters
Barclays sees $2/bbl impact to oil prices as virus fears threaten demand - Reuters:
Barclays said on Tuesday oil prices will be impacted by $2 per barrel on the potential economic fallout from the coronavirus outbreak in China.
More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China, leading authorities to increase preventive measures, impose travel restrictions and also extend the Lunar New Year holidays to limit the spread of the virus.
The bank sees a $2 per barrel downside to their full-year Brent and WTI forecasts of $62 per barrel and $57 per barrel, respectively.
Compounding the effects of the spillover to economic growth from China and the region, Barclays expects transitory oil demand erosion of about 0.6-0.8 million barrels per day (mb/d) in the first quarter of this year, or 0.2 mb/d for the full year.
Barclays said on Tuesday oil prices will be impacted by $2 per barrel on the potential economic fallout from the coronavirus outbreak in China.
More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China, leading authorities to increase preventive measures, impose travel restrictions and also extend the Lunar New Year holidays to limit the spread of the virus.
The bank sees a $2 per barrel downside to their full-year Brent and WTI forecasts of $62 per barrel and $57 per barrel, respectively.
Compounding the effects of the spillover to economic growth from China and the region, Barclays expects transitory oil demand erosion of about 0.6-0.8 million barrels per day (mb/d) in the first quarter of this year, or 0.2 mb/d for the full year.
#Qatar Emir Replaces Prime Minister With Close Aide - Bloomberg
Qatar Emir Replaces Prime Minister With Close Aide - Bloomberg:
Qatar’s prime minister has resigned and been replaced by a close aide of the emir.
Khalid bin Khalifa Al Thani, who was the head of the emir’s court, will succeed Abdullah bin Naser bin Khalifa, the state-run Qatar News Agency reported on Tuesday. No reason was given for the previous prime minister’s resignation.
Abdullah bin Naser bin Khalifa had been premier since the current emir, Sheikh Tamim bin Hamad Al Thani assumed power in June 2013.
The appointment comes at a delicate time for Qatar. A three-year standoff with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt continues to cast a pall over regional politics, despite some signs late last year that the countries were moving closer to rapprochement.
Qatar’s prime minister has resigned and been replaced by a close aide of the emir.
Khalid bin Khalifa Al Thani, who was the head of the emir’s court, will succeed Abdullah bin Naser bin Khalifa, the state-run Qatar News Agency reported on Tuesday. No reason was given for the previous prime minister’s resignation.
Abdullah bin Naser bin Khalifa had been premier since the current emir, Sheikh Tamim bin Hamad Al Thani assumed power in June 2013.
The appointment comes at a delicate time for Qatar. A three-year standoff with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt continues to cast a pall over regional politics, despite some signs late last year that the countries were moving closer to rapprochement.
#Lebanon News: Cabinet to Decide on Debt Crisis Bond Payment - Bloomberg
Lebanon News: Cabinet to Decide on Debt Crisis Bond Payment - Bloomberg:
Crisis-ridden Lebanon finally has a government again and top of its agenda will be whether to repay a Eurobond maturing in six weeks.
After lawmakers passed the 2020 budget on Monday, the new cabinet’s next major decision will be what to do about the $1.2 billion of bonds due on March 9.
The team of 20, led by Prime Minister Hassan Diab, a computing-engineering professor, will meet this week with nationwide protests continuing, the central bank’s foreign reserves falling and the diaspora inflows that have kept the economy afloat for decades slowing to a trickle. Government debt stands at more than 150% of gross domestic product, one of the highest levels for any country.
For most investors, it’s a question of when, not if, Lebanon defaults on its debt, which includes more than $30 billion of Eurobonds. Around a third are held by foreigners, with the rest owned by the central bank and local lenders, according to Oxford Economics. Lebanese banks also have billions of dollars of foreign-currency deposits parked at the central bank.
Crisis-ridden Lebanon finally has a government again and top of its agenda will be whether to repay a Eurobond maturing in six weeks.
After lawmakers passed the 2020 budget on Monday, the new cabinet’s next major decision will be what to do about the $1.2 billion of bonds due on March 9.
The team of 20, led by Prime Minister Hassan Diab, a computing-engineering professor, will meet this week with nationwide protests continuing, the central bank’s foreign reserves falling and the diaspora inflows that have kept the economy afloat for decades slowing to a trickle. Government debt stands at more than 150% of gross domestic product, one of the highest levels for any country.
For most investors, it’s a question of when, not if, Lebanon defaults on its debt, which includes more than $30 billion of Eurobonds. Around a third are held by foreigners, with the rest owned by the central bank and local lenders, according to Oxford Economics. Lebanese banks also have billions of dollars of foreign-currency deposits parked at the central bank.
Oil steadies after multi-day rout over China virus - Reuters
Oil steadies after multi-day rout over China virus - Reuters:
Oil futures steadied on Tuesday after five days of declines on concerns a virus outbreak in China could dent demand for oil, with some analysts suggesting the falls may be overdone.
Brent crude LCOc1 was down 4 cents at $59.28 at around 0540 GMT. On Monday it hit a three-month low of $58.50, as the virus outbreak triggered a global selloff of riskier assets.
U.S. West Texas Intermediate CLc1 was up 4 cents at $53.18, having spent most of Tuesday in negative territory after slipping to its lowest since early October in the previous session at $52.13.
The United States warned against travel to China and other countries put out advisories as the death toll from the spreading coronavirus outbreak rose to more than 100 people and left millions of Chinese stranded during the biggest holiday of the year.
Oil futures steadied on Tuesday after five days of declines on concerns a virus outbreak in China could dent demand for oil, with some analysts suggesting the falls may be overdone.
Brent crude LCOc1 was down 4 cents at $59.28 at around 0540 GMT. On Monday it hit a three-month low of $58.50, as the virus outbreak triggered a global selloff of riskier assets.
U.S. West Texas Intermediate CLc1 was up 4 cents at $53.18, having spent most of Tuesday in negative territory after slipping to its lowest since early October in the previous session at $52.13.
The United States warned against travel to China and other countries put out advisories as the death toll from the spreading coronavirus outbreak rose to more than 100 people and left millions of Chinese stranded during the biggest holiday of the year.
UPDATE 1-First #AbuDhabi Bank reports rise in Q4 profit, and impairments - Reuters
UPDATE 1-First Abu Dhabi Bank reports rise in Q4 profit, and impairments - Reuters:
First Abu Dhabi Bank, the biggest lender in the United Arab Emirates (UAE), reported a 5% rise in quarterly profit due to an increase in non-interest income, but like other rivals also saw a steep jump in impairment charges.
UAE lenders are seeing rising bad debt charges as they navigate a property downturn notably in Dubai, which has hit contractors and real estate firms.
Emirates NBD saw impairments rise more than three times, partly due to bad debt charges at its newly acquired Turkish unit, DenizBank, while similar charges climbed 48% at Abu Dhabi Commercial Bank.
Dubai house prices have fallen by at least a quarter since mid-2014, the peak from its recovery from the 2009 debt crisis, and the end of this latest bout of weakness is not yet near.
First Abu Dhabi Bank, the biggest lender in the United Arab Emirates (UAE), reported a 5% rise in quarterly profit due to an increase in non-interest income, but like other rivals also saw a steep jump in impairment charges.
UAE lenders are seeing rising bad debt charges as they navigate a property downturn notably in Dubai, which has hit contractors and real estate firms.
Emirates NBD saw impairments rise more than three times, partly due to bad debt charges at its newly acquired Turkish unit, DenizBank, while similar charges climbed 48% at Abu Dhabi Commercial Bank.
Dubai house prices have fallen by at least a quarter since mid-2014, the peak from its recovery from the 2009 debt crisis, and the end of this latest bout of weakness is not yet near.
MIDEAST STOCKS-Gulf stocks rebound in early trade on Tuesday | Nasdaq
MIDEAST STOCKS-Gulf stocks rebound in early trade on Tuesday | Nasdaq:
Major Gulf stock markets rebounded in early trade on Tuesday as robust financial results outweighed pessimism over the impact of the coronavirus outbreak in China.
Oil prices fell for a sixth session on Tuesday on concern the spread of the virus could weaken economic growth and demand for oil. But Saudi Energy Minister Prince Abdulaziz bin Salman said the market impact was "primarily driven by psychological factors and extremely negative expectations ... despite its very limited impact on global oil demand."
In Abu Dhabi, the index .ADI rose 0.6% as the biggest bank in the United Arab Emirates, First Abu Dhabi Bank FAB, advanced 0.8% after posting a 5% increase in fourth-quarter profit. Emirates Telecom Group ETISALAT.AD was up 0.9%.
Dubai's index .DFMGI edged up 0.1% after four days of declines. Dubai Islamic Bank DISB.DU gained 0.4% and National Central Cooling Co (Tabreed) TABR.DU jumped 5.3%.
Major Gulf stock markets rebounded in early trade on Tuesday as robust financial results outweighed pessimism over the impact of the coronavirus outbreak in China.
Oil prices fell for a sixth session on Tuesday on concern the spread of the virus could weaken economic growth and demand for oil. But Saudi Energy Minister Prince Abdulaziz bin Salman said the market impact was "primarily driven by psychological factors and extremely negative expectations ... despite its very limited impact on global oil demand."
In Abu Dhabi, the index .ADI rose 0.6% as the biggest bank in the United Arab Emirates, First Abu Dhabi Bank FAB, advanced 0.8% after posting a 5% increase in fourth-quarter profit. Emirates Telecom Group ETISALAT.AD was up 0.9%.
Dubai's index .DFMGI edged up 0.1% after four days of declines. Dubai Islamic Bank DISB.DU gained 0.4% and National Central Cooling Co (Tabreed) TABR.DU jumped 5.3%.
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