Oil gains over 1% on strong U.S., China economic data | Reuters
Strong economic data from China and the United States helped lift oil prices by more than 1% on Tuesday, recouping some of the previous session’s losses.
Brent gained 83 cents, or 1.3%, to $62.98 a barrel by 1:19 p.m. EDT (1719 GMT). U.S. West Texas Intermediate (WTI) crude rose 91 cents, or 1.6%, to $59.56 a barrel.
Prices were buoyed as March data showed U.S. services activity touched a record high. China’s service sector has also gathered steam with the sharpest increase in sales in three months.
In addition, England is set to ease more coronavirus restrictions on April 12, allowing businesses including all shops, gyms, hair salons and outdoor hospitality venues to reopen.
The market is recovering from steep losses on Monday, when both oil price benchmarks fell by about $3 on Monday because of increasing OPEC+ oil supply and rising COVID-19 infections in India and parts of Europe.
Tuesday, 6 April 2021
Shale Giant Occidental (OXY) Praises ‘Brilliant’ OPEC for Rebalancing Oil Market - Bloomberg
Shale Giant Occidental (OXY) Praises ‘Brilliant’ OPEC for Rebalancing Oil Market - Bloomberg
Occidental Petroleum Corp. praised OPEC and its allies for managing crude markets out of last year’s historic crash and said the U.S. shale industry is thankful for its efforts.
“They’ve been brilliant in the way they’ve handled it, the way they’ve been doing it,” Chief Executive Officer Vicki Hollub said at a conference hosted by the Texas Independent Producers & Royalty Owners Association Tuesday. “Every U.S. oil and gas company are appreciating their efforts.”
OPEC+ and U.S. shale have been rivals for much of the last decade, with the Americans’ rapid growth eating away at the cartel’s share of the oil market and power to control it. But the U.S. has lost about 2 million barrels a day, or 15% of its production, over the past year and future growth is severely challenged by producers’ diminished access to capital and shareholder demands for cash returns over more output.
Hollub says “too much investment” would be required for the U.S. to return to its peak of around 13 million barrels a day achieved in the first quarter of 2020. As such, Hollub sees OPEC bringing back some of its curtailed barrels but not enough to exceed global demand in the second half of the year.
“They’re trying to get back to a supply-demand situation,” Hollub said. “Many of the countries worldwide need 60 or 70 or 80 dollars to break even and so ultimately I think in 2022 we’ll get to $70 or better.”
Brent crude has risen about 20% this year to over $62 a barrel.
Occidental Petroleum Corp. praised OPEC and its allies for managing crude markets out of last year’s historic crash and said the U.S. shale industry is thankful for its efforts.
“They’ve been brilliant in the way they’ve handled it, the way they’ve been doing it,” Chief Executive Officer Vicki Hollub said at a conference hosted by the Texas Independent Producers & Royalty Owners Association Tuesday. “Every U.S. oil and gas company are appreciating their efforts.”
OPEC+ and U.S. shale have been rivals for much of the last decade, with the Americans’ rapid growth eating away at the cartel’s share of the oil market and power to control it. But the U.S. has lost about 2 million barrels a day, or 15% of its production, over the past year and future growth is severely challenged by producers’ diminished access to capital and shareholder demands for cash returns over more output.
Hollub says “too much investment” would be required for the U.S. to return to its peak of around 13 million barrels a day achieved in the first quarter of 2020. As such, Hollub sees OPEC bringing back some of its curtailed barrels but not enough to exceed global demand in the second half of the year.
“They’re trying to get back to a supply-demand situation,” Hollub said. “Many of the countries worldwide need 60 or 70 or 80 dollars to break even and so ultimately I think in 2022 we’ll get to $70 or better.”
Brent crude has risen about 20% this year to over $62 a barrel.
Apollo Raises $1.8 Billion in Push for Big Corporate Loans - Bloomberg
Apollo Raises $1.8 Billion in Push for Big Corporate Loans - Bloomberg
Apollo Global Management Inc. sees an increasing opportunity to make large corporate loans, a business long dominated by the biggest global banks.
The firm has raised $1.8 billion for Apollo Origination Partnership, a new direct-lending fund that’s seeking an internal rate of return of 8% to 10%, excluding leverage, and 12% to 14% with borrowed money, according to a letter sent to investors Tuesday.
The first investment will be a senior secured term loan facility to an insurance-broking platform based in the U.K., Apollo told investors. The alternative asset manager expects to raise $3 billion for the fund by the first quarter of next year, according to a person familiar with the matter. That adds to a $12 billion platform started last year and backed by Abu Dhabi state fund Mubadala Investment Co.
An spokeswoman for New York-based Apollo declined to comment.
Institutional investors have been pouring cash into private credit. Just a year or two ago, large deals were rare. Now lenders estimate that 10% of new U.S. leveraged corporate loans could end up happening in the private market over the next five years.
Apollo and some rivals, including Ares Management and Blackstone Group Inc.’s GSO Capital Partners, are moving into terrain traditionally controlled by the biggest banks, which arrange private deals exceeding $1 billion and sell them to institutional investors. Apollo has already made about $3 billion in giant corporate loans over the past two years.
“The shift in corporate finance from public to private markets is set to continue and accelerate,” John Zito, deputy chief investment officer of Apollo’s $320 billion credit business, said in a white paper that was sent to investors along with the letter.
Apollo Global Management Inc. sees an increasing opportunity to make large corporate loans, a business long dominated by the biggest global banks.
The firm has raised $1.8 billion for Apollo Origination Partnership, a new direct-lending fund that’s seeking an internal rate of return of 8% to 10%, excluding leverage, and 12% to 14% with borrowed money, according to a letter sent to investors Tuesday.
The first investment will be a senior secured term loan facility to an insurance-broking platform based in the U.K., Apollo told investors. The alternative asset manager expects to raise $3 billion for the fund by the first quarter of next year, according to a person familiar with the matter. That adds to a $12 billion platform started last year and backed by Abu Dhabi state fund Mubadala Investment Co.
An spokeswoman for New York-based Apollo declined to comment.
Institutional investors have been pouring cash into private credit. Just a year or two ago, large deals were rare. Now lenders estimate that 10% of new U.S. leveraged corporate loans could end up happening in the private market over the next five years.
Apollo and some rivals, including Ares Management and Blackstone Group Inc.’s GSO Capital Partners, are moving into terrain traditionally controlled by the biggest banks, which arrange private deals exceeding $1 billion and sell them to institutional investors. Apollo has already made about $3 billion in giant corporate loans over the past two years.
“The shift in corporate finance from public to private markets is set to continue and accelerate,” John Zito, deputy chief investment officer of Apollo’s $320 billion credit business, said in a white paper that was sent to investors along with the letter.
Qatari Royal Among Investors in Credit Suisse’s Greensill Funds - Bloomberg
Qatari Royal Among Investors in Credit Suisse’s Greensill Funds - Bloomberg
Qatar’s former prime minister is one of the wealthy Middle Eastern investors exposed to Credit Suisse Group AG’s troubled supply-chain finance funds, according to people familiar with the matter.
Vehicles linked to Sheikh Hamad bin Jassim Al Thani invested approximately $200 million in the funds that bought loans from Greensill Capital, the financial firm that collapsed in early March, said the people, asking not to be named because they are not authorized to speak on the matter.
It’s unclear how much Sheikh Hamad, also the former head of Qatar’s sovereign wealth fund, stands to lose, and the preliminary estimates of his exposure could change. Representatives for Credit Suisse and Sheikh Hamad declined to comment.
The bank is in a tough spot as it’s seeking to retain the relationship with wealthy clients while leaning toward letting investors foot the bill if it can’t recover the full amount of the loans held in the Greensill-linked funds. Out of $10 billion managed by the funds, Credit Suisse had sold more than $1 billion through its private banking arm in the Middle East, Bloomberg reported earlier.
Qatar’s former prime minister is one of the wealthy Middle Eastern investors exposed to Credit Suisse Group AG’s troubled supply-chain finance funds, according to people familiar with the matter.
Vehicles linked to Sheikh Hamad bin Jassim Al Thani invested approximately $200 million in the funds that bought loans from Greensill Capital, the financial firm that collapsed in early March, said the people, asking not to be named because they are not authorized to speak on the matter.
It’s unclear how much Sheikh Hamad, also the former head of Qatar’s sovereign wealth fund, stands to lose, and the preliminary estimates of his exposure could change. Representatives for Credit Suisse and Sheikh Hamad declined to comment.
The bank is in a tough spot as it’s seeking to retain the relationship with wealthy clients while leaning toward letting investors foot the bill if it can’t recover the full amount of the loans held in the Greensill-linked funds. Out of $10 billion managed by the funds, Credit Suisse had sold more than $1 billion through its private banking arm in the Middle East, Bloomberg reported earlier.
#Qatar Airways CEO says passenger demand unlikely to recover until 2024 | Reuters
Qatar Airways CEO says passenger demand unlikely to recover until 2024 | Reuters
Qatar Airways Chief Executive Akbar al-Baker said on Tuesday he agreed with industry forecasts that passenger demand for air travel would not return to pre-pandemic levels until 2024.
“We need to get borders safely reopened so people will fly again and with airlines expected to bleed cash at least until the fourth quarter of 2021 there is no time to lose,” he told an online event hosted by the U.S. Chamber of Commerce.
Qatar Airways Chief Executive Akbar al-Baker said on Tuesday he agreed with industry forecasts that passenger demand for air travel would not return to pre-pandemic levels until 2024.
“We need to get borders safely reopened so people will fly again and with airlines expected to bleed cash at least until the fourth quarter of 2021 there is no time to lose,” he told an online event hosted by the U.S. Chamber of Commerce.
#AbuDhabi index extends gains for eighth session; other markets flat | Reuters
Abu Dhabi index extends gains for eighth session; other markets flat | Reuters
The Abu Dhabi stock market ended higher on Tuesday as aquaculture company International Holding continued its advance, while other major Gulf markets were little changed.
In Abu Dhabi, the index climbed 1.1%, extending gains for an eighth consecutive session, boosted by a 12.8% rise in International Holding.
On Sunday, the company said it planned to divest all its shares in defence supplier Trust International Holding for 350 million dirhams ($95.30 million).
“Profits in 2020 jumped six times over the numbers in 2019, with International Holdings benefiting from various acquisitions in different sectors,” Daniel Takieddine, market analyst at FxPRIMUS, said. “With the market returning to good health, International Holdings is definitely a stock to watch.”
So far this year, International Holding has risen more than 60%.
Saudi Arabia’s benchmark index added 0.2%, with Banque Saudi Fransi jumping 4.5%, while Advanced Petrochemical advanced 4.2% after it reported strong quarterly earnings.
Saudi Arabia’s Yanbu Cement, however, declined 1.4% after saying that it was postponing a recommendation to decrease its capital to support Saudi government plans requiring the private sector to invest in the local economy.
In Dubai, the main share index reversed earlier losses to close flat.
The Abu Dhabi stock market ended higher on Tuesday as aquaculture company International Holding continued its advance, while other major Gulf markets were little changed.
In Abu Dhabi, the index climbed 1.1%, extending gains for an eighth consecutive session, boosted by a 12.8% rise in International Holding.
On Sunday, the company said it planned to divest all its shares in defence supplier Trust International Holding for 350 million dirhams ($95.30 million).
“Profits in 2020 jumped six times over the numbers in 2019, with International Holdings benefiting from various acquisitions in different sectors,” Daniel Takieddine, market analyst at FxPRIMUS, said. “With the market returning to good health, International Holdings is definitely a stock to watch.”
So far this year, International Holding has risen more than 60%.
Saudi Arabia’s benchmark index added 0.2%, with Banque Saudi Fransi jumping 4.5%, while Advanced Petrochemical advanced 4.2% after it reported strong quarterly earnings.
Saudi Arabia’s Yanbu Cement, however, declined 1.4% after saying that it was postponing a recommendation to decrease its capital to support Saudi government plans requiring the private sector to invest in the local economy.
In Dubai, the main share index reversed earlier losses to close flat.
#Dubai DFM to launch futures contracts for Air Arabia, Aramex, Du stocks | ZAWYA MENA Edition
Dubai DFM to launch futures contracts for Air Arabia, Aramex, Du stocks | ZAWYA MENA Edition
The Dubai Financial Market (DFM) is planning to launch new equity futures contracts on stocks of three listed companies on April 18, 2021, as part of moves to diversify investment opportunities.
The stocks are Aramex, Air Arabia and Emirates Integrated Telecommunications Company (or Du) and the new contracts will have tenures of 1, 2 and 3 months, the bourse operator said in a statement Tuesday.
This is similar to the inaugural equity futures contracts launched by DFM on in October last year on stocks of five listed companies—Emaar Properties, Dubai Islamic Bank, Emirates NBD, Emaar Development and Emaar Malls.
The total value of trading on contracts of five leading listed companies reached 57 million dirhams ($15.5 million) with 184,345 contracts, according to the statement.
The Dubai Financial Market (DFM) is planning to launch new equity futures contracts on stocks of three listed companies on April 18, 2021, as part of moves to diversify investment opportunities.
The stocks are Aramex, Air Arabia and Emirates Integrated Telecommunications Company (or Du) and the new contracts will have tenures of 1, 2 and 3 months, the bourse operator said in a statement Tuesday.
This is similar to the inaugural equity futures contracts launched by DFM on in October last year on stocks of five listed companies—Emaar Properties, Dubai Islamic Bank, Emirates NBD, Emaar Development and Emaar Malls.
The total value of trading on contracts of five leading listed companies reached 57 million dirhams ($15.5 million) with 184,345 contracts, according to the statement.
#SaudiArabia's SABIC picks HSBC, Morgan Stanley for specialty unit IPO - sources | Reuters
Saudi Arabia's SABIC picks HSBC, Morgan Stanley for specialty unit IPO - sources | Reuters
Saudi Basic Industries Corp (SABIC) has selected HSBC and Morgan Stanley to work on the planned initial public offering (IPO) of its specialty chemicals business, two sources familiar with the matter said.
SABIC, the world’s fourth-biggest petrochemicals firm, hired Saudi investment bank NCB Capital earlier this year to work on the public share sale, which sources said could raise several hundred million dollars.
The specialty chemicals business brings in about $2 billion in sales each year for SABIC, which is controlled by state oil giant Saudi Aramco, one of the sources, and a third source, said.
The unit produces speciality engineering thermoplastic resins and compounds, composites, thermosets and additives, according to information on its website.
SABIC, HSBC and Morgan Stanley declined to comment.
The country had a flurry of public offerings last year as companies tap into Saudi demand for shares since oil giant Aramco’s record IPO in 2019.
Saudi Basic Industries Corp (SABIC) has selected HSBC and Morgan Stanley to work on the planned initial public offering (IPO) of its specialty chemicals business, two sources familiar with the matter said.
SABIC, the world’s fourth-biggest petrochemicals firm, hired Saudi investment bank NCB Capital earlier this year to work on the public share sale, which sources said could raise several hundred million dollars.
The specialty chemicals business brings in about $2 billion in sales each year for SABIC, which is controlled by state oil giant Saudi Aramco, one of the sources, and a third source, said.
The unit produces speciality engineering thermoplastic resins and compounds, composites, thermosets and additives, according to information on its website.
SABIC, HSBC and Morgan Stanley declined to comment.
The country had a flurry of public offerings last year as companies tap into Saudi demand for shares since oil giant Aramco’s record IPO in 2019.
Finablr bidders hire Alvarez and Marsal to advise on restructuring and acquisitions | The National
Finablr bidders hire Alvarez and Marsal to advise on restructuring and acquisitions | The National
The consortium that agreed a deal in December to buy the UAE's foreign exchange and digital payments group Finablr has hired Alvarez & Marsal Middle East to advise on the company's restructuring and on future acquisitions.
Alvarez & Marsal has already provided Switzerland-based Prism Group and Royal Strategic Partners with an assessment of Finablr's current state and business planning advice.
It will also work on a turnaround programme to improve Finablr's operational performance and efficiency, including strengthening its management team, the consortium said in a statement on Tuesday.
Former Deloitte partner Robert Miller was appointed as Finablr's new chief executive in December.
“We are pleased to confirm that our initial due diligence on the acquisition of Finablr is complete and we are looking forward to winning regulatory approval for the deal so that we can stabilise the business and implement our ambitious expansion plans," Prism Group chief executive Amir Nagammy said.
The consortium that agreed a deal in December to buy the UAE's foreign exchange and digital payments group Finablr has hired Alvarez & Marsal Middle East to advise on the company's restructuring and on future acquisitions.
Alvarez & Marsal has already provided Switzerland-based Prism Group and Royal Strategic Partners with an assessment of Finablr's current state and business planning advice.
It will also work on a turnaround programme to improve Finablr's operational performance and efficiency, including strengthening its management team, the consortium said in a statement on Tuesday.
Former Deloitte partner Robert Miller was appointed as Finablr's new chief executive in December.
“We are pleased to confirm that our initial due diligence on the acquisition of Finablr is complete and we are looking forward to winning regulatory approval for the deal so that we can stabilise the business and implement our ambitious expansion plans," Prism Group chief executive Amir Nagammy said.
How #SaudiArabia Can Thrive in a Post-Oil World - Bloomberg
How Saudi Arabia Can Thrive in a Post-Oil World - Bloomberg
On the face of it, no country has more to lose from the transition away from fossil fuels than Saudi Arabia.
Before the discovery of oil, it barely existed as a nation. Its founding monarch Ibn Saud’s 1933 oil concession to Standard Oil Co. of California came just months after he was proclaimed king of a land that hadn’t been unified in 1,000 years.
Those concession payments, and later oil revenues, allowed Ibn Saud to cement his control by bestowing patronage on the peninsula’s fractious tribal groups, according to Ellen Wald, a fellow at the Atlantic Council and historian of the kingdom. The same sense of noblesse oblige lives on in the modern country’s cradle-to-grave welfare state.
“The concession legitimized him as the ruler of Saudi Arabia,” says Wald. “It’s very hard to conceive of a Saudi state without oil.”
On the face of it, no country has more to lose from the transition away from fossil fuels than Saudi Arabia.
Before the discovery of oil, it barely existed as a nation. Its founding monarch Ibn Saud’s 1933 oil concession to Standard Oil Co. of California came just months after he was proclaimed king of a land that hadn’t been unified in 1,000 years.
Those concession payments, and later oil revenues, allowed Ibn Saud to cement his control by bestowing patronage on the peninsula’s fractious tribal groups, according to Ellen Wald, a fellow at the Atlantic Council and historian of the kingdom. The same sense of noblesse oblige lives on in the modern country’s cradle-to-grave welfare state.
“The concession legitimized him as the ruler of Saudi Arabia,” says Wald. “It’s very hard to conceive of a Saudi state without oil.”
#Saudi Aramco Global IPO Looks Unlikely Under New Shareek Plan - Bloomberg
Saudi Aramco Global IPO Looks Unlikely Under New Shareek Plan - Bloomberg
Saudi Aramco has been invited by Crown Prince Mohammed bin Salman to participate in a new initiative whereby it will invest tens of billions of dollars in the future of Saudi Arabia. To which one might respond: Doesn’t Aramco do that already?
It’s a fair question. The “Shareek,” or “partnership,” plan was announced in a late-night teleconference last week. Large companies, including Saudi Arabian Oil Co., are to invest 5 trillion riyals ($1.33 trillion) in the domestic economy over this decade, reducing the dividends paid to the government in order to do so. Bloomberg News reports Aramco and chemicals firm Saudi Basic Industries Corp. — majority-owned by Aramco after a recent acquisition — would contribute 60% of the investment.
Exactly how it will work is TBD; the company didn’t respond to a request for details. But one implication is that hopes for a splashy international listing of Aramco look dead.
Aramco’s IPO in December 2019 was the biggest ever but also confined to the small domestic market. This enabled Saudi Arabia to deliver on MBS’s objective of an optically high price but at the cost of mostly skipping international capital. The latter was less likely to overlook Aramco’s state ownership and would therefore have sought a discount. In the end, the IPO bore a resemblance to domestic taxation. Nonetheless, Aramco and the government took several notably investor-friendly steps. One was guaranteeing minority investors their share of an annual $75 billion dividend payment for five years (see this). Another was adjusting the royalties Aramco pays, boosting free cash flow while preserving the state’s overall take (see this).
The Shareek announcement runs counter to this in a number of ways. In the absence of further guidance, I am assuming the implied annual spending by a combined Aramco-SABIC of roughly $80 billion would include the $40 billion budgeted already for its oil and gas business. This would mean redirecting an extra $40 billion of cash flow that would otherwise flow as dividends to the government toward capital expenditure. 1 In one sense, who cares: Rather than dividend the money to the state, which then spends it, the spending happens under Aramco’s aegis instead. It’s all the same money.
And that would be the end of it if Aramco was still just a 100% state-owned company.
Saudi Aramco has been invited by Crown Prince Mohammed bin Salman to participate in a new initiative whereby it will invest tens of billions of dollars in the future of Saudi Arabia. To which one might respond: Doesn’t Aramco do that already?
It’s a fair question. The “Shareek,” or “partnership,” plan was announced in a late-night teleconference last week. Large companies, including Saudi Arabian Oil Co., are to invest 5 trillion riyals ($1.33 trillion) in the domestic economy over this decade, reducing the dividends paid to the government in order to do so. Bloomberg News reports Aramco and chemicals firm Saudi Basic Industries Corp. — majority-owned by Aramco after a recent acquisition — would contribute 60% of the investment.
Exactly how it will work is TBD; the company didn’t respond to a request for details. But one implication is that hopes for a splashy international listing of Aramco look dead.
Aramco’s IPO in December 2019 was the biggest ever but also confined to the small domestic market. This enabled Saudi Arabia to deliver on MBS’s objective of an optically high price but at the cost of mostly skipping international capital. The latter was less likely to overlook Aramco’s state ownership and would therefore have sought a discount. In the end, the IPO bore a resemblance to domestic taxation. Nonetheless, Aramco and the government took several notably investor-friendly steps. One was guaranteeing minority investors their share of an annual $75 billion dividend payment for five years (see this). Another was adjusting the royalties Aramco pays, boosting free cash flow while preserving the state’s overall take (see this).
The Shareek announcement runs counter to this in a number of ways. In the absence of further guidance, I am assuming the implied annual spending by a combined Aramco-SABIC of roughly $80 billion would include the $40 billion budgeted already for its oil and gas business. This would mean redirecting an extra $40 billion of cash flow that would otherwise flow as dividends to the government toward capital expenditure. 1 In one sense, who cares: Rather than dividend the money to the state, which then spends it, the spending happens under Aramco’s aegis instead. It’s all the same money.
And that would be the end of it if Aramco was still just a 100% state-owned company.
Oil rebounds on robust economic data | Reuters
Oil rebounds on robust economic data | Reuters
Oil prices rose on Tuesday supported by strong economic data from China and the United States, recouping some of the losses from the previous session due to rising OPEC+ supply and infections in India and parts of Europe.
Brent rose 90 cents, or 1.5%, to $63.05 a barrel by 0840 GMT. U.S. West Texas Intermediate (WTI) crude rose 98 cents, or 1.7%, to $59.63.
Both contracts fell around $3 on Monday.
Coronavirus-related deaths worldwide crossed 3 million on Tuesday, according to a Reuters tally, as the latest global resurgence of COVID-19 infections is challenging vaccination efforts across the globe.
“The current situation is fragile, therefore re-visiting the recent highs (of oil prices)... is not imminent,” said PVM analyst Tamas Varga.
“Until there are palpable signs of falling infection rates the oil market is likely to remain violent and hectic,” he added.
Oil prices rose on Tuesday supported by strong economic data from China and the United States, recouping some of the losses from the previous session due to rising OPEC+ supply and infections in India and parts of Europe.
Brent rose 90 cents, or 1.5%, to $63.05 a barrel by 0840 GMT. U.S. West Texas Intermediate (WTI) crude rose 98 cents, or 1.7%, to $59.63.
Both contracts fell around $3 on Monday.
Coronavirus-related deaths worldwide crossed 3 million on Tuesday, according to a Reuters tally, as the latest global resurgence of COVID-19 infections is challenging vaccination efforts across the globe.
“The current situation is fragile, therefore re-visiting the recent highs (of oil prices)... is not imminent,” said PVM analyst Tamas Varga.
“Until there are palpable signs of falling infection rates the oil market is likely to remain violent and hectic,” he added.
Private Equity Sees Shale Escape Route by Building Cash Flow - Bloomberg
Private Equity Sees Shale Escape Route by Building Cash Flow - Bloomberg
Private-equity firms that bet big on shale for more than a decade finally are seeing glimmers of hope that their investments will bear fruit.
Pioneer Natural Resources Co. took analysts and investors by surprise with its $6.4 billion deal to buy DoublePoint Energy LLC, a Permian shale powerhouse backed by Apollo Global Management Inc., Quantum Energy Partners, Magnetar Capital and Blackstone Credit. It’s the largest acquisition of a closely held oil company since 2011.
Big funds were among the most-acquisitive suitors in North American shale fields such as the Permian Basin, planning to flip their holdings to giant public companies for quick profits. But the strategy collapsed as debt-fueled drillers contributed to a global crude glut, oil markets shuddered and would-be buyers of PE-backed explorers turned their backs.
Private-equity firms that bet big on shale for more than a decade finally are seeing glimmers of hope that their investments will bear fruit.
Pioneer Natural Resources Co. took analysts and investors by surprise with its $6.4 billion deal to buy DoublePoint Energy LLC, a Permian shale powerhouse backed by Apollo Global Management Inc., Quantum Energy Partners, Magnetar Capital and Blackstone Credit. It’s the largest acquisition of a closely held oil company since 2011.
Big funds were among the most-acquisitive suitors in North American shale fields such as the Permian Basin, planning to flip their holdings to giant public companies for quick profits. But the strategy collapsed as debt-fueled drillers contributed to a global crude glut, oil markets shuddered and would-be buyers of PE-backed explorers turned their backs.
Column: OPEC+ bets crude oil demand will recover as fast as output returns | Reuters
Column: OPEC+ bets crude oil demand will recover as fast as output returns | Reuters
The move by the OPEC+ group of oil exporters to ease their output restrictions from May onwards is effectively a bet that the current soft demand for crude will improve at the same pace as production returns.
If history is a guide, it will be extremely difficult to get that balance correct, especially in the wake of such a large disruption to the global oil market as the coronavirus pandemic.
With the impact of the pandemic still evident, the decision by OPEC+, the group that includes the Organization of the Petroleum Exporting Countries, Russia and their allies, to add back an effective 2.1 million barrels per day (bpd) of output by July seems brave.
The group decided at a meeting on April 1 to ease their output cuts of about 7 million bpd by 350,000 bpd in May, another 350,000 bpd in June and by 400,000 bpd in July.
In addition, OPEC+’s top exporter, Saudi Arabia, said it was phasing out its extra voluntary cuts by July, a move that will add 1 million bpd.
The move by the OPEC+ group of oil exporters to ease their output restrictions from May onwards is effectively a bet that the current soft demand for crude will improve at the same pace as production returns.
If history is a guide, it will be extremely difficult to get that balance correct, especially in the wake of such a large disruption to the global oil market as the coronavirus pandemic.
With the impact of the pandemic still evident, the decision by OPEC+, the group that includes the Organization of the Petroleum Exporting Countries, Russia and their allies, to add back an effective 2.1 million barrels per day (bpd) of output by July seems brave.
The group decided at a meeting on April 1 to ease their output cuts of about 7 million bpd by 350,000 bpd in May, another 350,000 bpd in June and by 400,000 bpd in July.
In addition, OPEC+’s top exporter, Saudi Arabia, said it was phasing out its extra voluntary cuts by July, a move that will add 1 million bpd.
Oil rebounds on robust economic data, bargain hunting | Reuters
Oil rebounds on robust economic data, bargain hunting | Reuters
Oil prices rose on Tuesday as investors looked for bargains following the previous day’s plunge of more than 4% on rising output from OPEC+ while strong economic data from the United States and China brightened recovery prospects.
Brent crude futures rose 38 cents, or 0.61%, to $62.53 a barrel at 0507 GMT, after falling 4.2% on Monday.
U.S. West Texas Intermediate (WTI) crude futures rose 34 cents, or 0.58%, to $58.99 barrel, after sliding 4.6% on Monday.
Market sentiment was buoyed by a survey from the Institute for Supply Management (ISM) on Monday showing activity in the U.S. services industry reached its highest level on record in March. The data came after a jobs report on Friday beat forecasts with 916,000 added to the U.S. economy last month.
The U.S. data “underscored growth momentum in the world’s largest economy, brightening the energy demand outlook,” said DailyFX strategist Margaret Yang.
Oil prices rose on Tuesday as investors looked for bargains following the previous day’s plunge of more than 4% on rising output from OPEC+ while strong economic data from the United States and China brightened recovery prospects.
Brent crude futures rose 38 cents, or 0.61%, to $62.53 a barrel at 0507 GMT, after falling 4.2% on Monday.
U.S. West Texas Intermediate (WTI) crude futures rose 34 cents, or 0.58%, to $58.99 barrel, after sliding 4.6% on Monday.
Market sentiment was buoyed by a survey from the Institute for Supply Management (ISM) on Monday showing activity in the U.S. services industry reached its highest level on record in March. The data came after a jobs report on Friday beat forecasts with 916,000 added to the U.S. economy last month.
The U.S. data “underscored growth momentum in the world’s largest economy, brightening the energy demand outlook,” said DailyFX strategist Margaret Yang.
MIDEAST STOCKS- #AbuDhabi outperforms major Gulf markets | Nasdaq
MIDEAST STOCKS-Abu Dhabi outperforms major Gulf markets | Nasdaq
The Abu Dhabi stock market advanced on Tuesday as aquaculture company International Holding continued its gains, while the Saudi index was bolstered by Advanced Petrochemical 2330.SE.
In Abu Dhabi, the index .ADI rose 1.3%, on track to extend gains for an eight consecutive session, boosted by a 13.6% rise in International Holding IHC.AD.
On Sunday, the company said it planned to divest all its shares in defence supplier Trust International Holding for 350 million dirhams ($95.30 million).
Saudi Arabia's benchmark index .TASI edged up 0.3%, with Advanced Petrochemical 2330.SE jumping more than 5%, after it reported strong quarterly earnings.
Saudi Arabia's Yanbu Cement 3060.SE, however, lost 0.8% after saying that it was postponing a recommendation to decrease its capital to support Saudi government plans requiring the private sector to invest in the local economy.
The capital decrease would have happened by cancelling 36.5% of its shares and compensating shareholders.
Meanwhile, the kingdom's non-oil private sector grew for the seventh straight month in March, albeit at a slower pace, with output and new orders expanding more moderately than a month earlier, a survey showed on Monday.
In Dubai, the benchmark index .ADI eased 0.3%, hit by a 1.1% fall in sharia-compliant lender Dubai Islamic Bank DISB.DU.
The Qatari index .QSI was flat in early trading.
The Abu Dhabi stock market advanced on Tuesday as aquaculture company International Holding continued its gains, while the Saudi index was bolstered by Advanced Petrochemical 2330.SE.
In Abu Dhabi, the index .ADI rose 1.3%, on track to extend gains for an eight consecutive session, boosted by a 13.6% rise in International Holding IHC.AD.
On Sunday, the company said it planned to divest all its shares in defence supplier Trust International Holding for 350 million dirhams ($95.30 million).
Saudi Arabia's benchmark index .TASI edged up 0.3%, with Advanced Petrochemical 2330.SE jumping more than 5%, after it reported strong quarterly earnings.
Saudi Arabia's Yanbu Cement 3060.SE, however, lost 0.8% after saying that it was postponing a recommendation to decrease its capital to support Saudi government plans requiring the private sector to invest in the local economy.
The capital decrease would have happened by cancelling 36.5% of its shares and compensating shareholders.
Meanwhile, the kingdom's non-oil private sector grew for the seventh straight month in March, albeit at a slower pace, with output and new orders expanding more moderately than a month earlier, a survey showed on Monday.
In Dubai, the benchmark index .ADI eased 0.3%, hit by a 1.1% fall in sharia-compliant lender Dubai Islamic Bank DISB.DU.
The Qatari index .QSI was flat in early trading.