Why the World Can’t Afford an Oil War - Bloomberg
It wouldn’t be an oil meeting without brinkmanship, but the stakes are high for the world economy as OPEC+ ministers resume talks today on an output agreement.
Until a last-minute objection by the United Arab Emirates, the oil cartel and its allies thought they had a deal to boost monthly supplies by 400,000 barrels a day between August and December to ease crude prices amid a revival in global demand.
As Salma El Wardany, Grant Smith, Dina Khrennikova and Javier Blas report, that sparked bitter infighting and raised the specter of last year’s output war between Saudi Arabia and Russia, which combined with slumping demand during Covid-19 lockdowns to briefly turn crude prices negative.
Failure to reach agreement would mean OPEC+ continues with existing output terms until April, adding to pressures that have already pushed prices up around 50% this year.
That risks stoking inflationary concerns in the global economy and may trigger a backlash toward the cartel from the U.S. and other major oil consumers fearful of the impact on the recovery.
There are other unpredictable factors. A deal to revive the Iranian nuclear pact may bring new oil supplies into the market if the U.S. lifts sanctions. The spread of the delta variant of Covid-19 is sending some nations back into lockdowns that may dampen demand.
As diplomatic channels buzz between the key players, the 23-nation alliance is facing a test with ramifications far beyond its members. It may take high-level political intervention to break the deadlock.
Friday, 2 July 2021
OPEC+ to resume oil policy talks on Monday after #UAE roadblock | Reuters
OPEC+ to resume oil policy talks on Monday after UAE roadblock | Reuters
OPEC+ will resume talks on Monday after failing to reach a deal on oil output policy for a second day running on Friday because the United Arab Emirates blocked some aspects of the pact.
The standoff could delay plans to pump more oil through to the end of the year to cool oil prices that have soared to 2-1/2 year highs.
Without a deal, the OPEC+ alliance could keep tighter restraints on output with oil prices now trading around $75 a barrel , more than 40% up this year. Consumers want more crude to aid a global recovery from the COVID-19 pandemic.
The rise in oil prices is contributing to global inflation, slowing the economic recovery from the coronavirus crisis.
OPEC+, which groups the Organization of the Petroleum Exporting Countries, Russia and their allies, voted on Friday to increase output by around 2 million barrels per day (bpd) from August to December 2021 and to extend remaining cuts to the end of 2022, instead of ending in April 2022, OPEC+ sources said.
The UAE agreed to releasing more oil into the market but refused to support the extension of the cuts.
OPEC+ will resume talks on Monday after failing to reach a deal on oil output policy for a second day running on Friday because the United Arab Emirates blocked some aspects of the pact.
The standoff could delay plans to pump more oil through to the end of the year to cool oil prices that have soared to 2-1/2 year highs.
Without a deal, the OPEC+ alliance could keep tighter restraints on output with oil prices now trading around $75 a barrel , more than 40% up this year. Consumers want more crude to aid a global recovery from the COVID-19 pandemic.
The rise in oil prices is contributing to global inflation, slowing the economic recovery from the coronavirus crisis.
OPEC+, which groups the Organization of the Petroleum Exporting Countries, Russia and their allies, voted on Friday to increase output by around 2 million barrels per day (bpd) from August to December 2021 and to extend remaining cuts to the end of 2022, instead of ending in April 2022, OPEC+ sources said.
The UAE agreed to releasing more oil into the market but refused to support the extension of the cuts.
Oil steady, traders on sidelines as OPEC+ talks drag on | Reuters
Oil steady, traders on sidelines as OPEC+ talks drag on | Reuters
Oil prices steadied on Friday after OPEC+ ministers resumed talks on raising oil output the day after the United Arab Emirates blocked a deal, which could delay plans to pump more oil through the end of the year.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are meeting again after UAE opposed the proposals, saying it wanted its quota to be higher, sources said. The long rally in prices could be undermined if OPEC+ nations go their separate ways and add to supply as they see fit. read more
Brent crude futures rose 33 cents to settle at $76.17 a barrel, after rising 1.6% on Thursday.
U.S. West Texas Intermediate (WTI) crude futures fell 7 cents to settle at $75.16 a barrel, having jumped 2.4% on Thursday to close at their highest since October 2018.
"We're in wait-and-see mode here with OPEC," said John Kilduff, partner at Again Capital in New York. "We'll have to see where the Saudis want to come out in terms of holding the group together."
Oil prices steadied on Friday after OPEC+ ministers resumed talks on raising oil output the day after the United Arab Emirates blocked a deal, which could delay plans to pump more oil through the end of the year.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are meeting again after UAE opposed the proposals, saying it wanted its quota to be higher, sources said. The long rally in prices could be undermined if OPEC+ nations go their separate ways and add to supply as they see fit. read more
Brent crude futures rose 33 cents to settle at $76.17 a barrel, after rising 1.6% on Thursday.
U.S. West Texas Intermediate (WTI) crude futures fell 7 cents to settle at $75.16 a barrel, having jumped 2.4% on Thursday to close at their highest since October 2018.
"We're in wait-and-see mode here with OPEC," said John Kilduff, partner at Again Capital in New York. "We'll have to see where the Saudis want to come out in terms of holding the group together."
#AbuDhabi's stock market continues bull run
Abu Dhabi's stock market continues bull run
The Abu Dhabi Securities Market index closed the week up 4.9 per cent on Thursday, taking its gains since the start of the year to 36.75 per cent. Over the past year, the bourse has soared 68 per cent.
ADX now has a market capitalisation of Dh1.18 trillion ($321.6bn), with the most recent impetus coming from the listing of Alpha Dhabi, a broad investment group with 40,000 employees and revenue of Dh3.8bn.
The company's shares listed on Sunday and have gained 16.4 per cent since, giving It a valuation of Dh174.6 billion. That makes it the fourth-biggest company on the exchange by market cap, behind International Holdings Company (which owns 44 per cent of Alpha Dhabi and is valued at Dh224bn), Etisalat (valued at Dh193.1bn) and First Abu Dhabi Bank (Dh183.2bn).
"It's been an excellent year for ADX," said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital. "May was a strong month for many markets and June continued to be for ADX. It has continued to lead the MSCI Emerging Market Index," he added.
MSCI's emerging market index comprises the biggest and most liquid stocks listed on emerging market exchanges around the world.
The Abu Dhabi Securities Market index closed the week up 4.9 per cent on Thursday, taking its gains since the start of the year to 36.75 per cent. Over the past year, the bourse has soared 68 per cent.
ADX now has a market capitalisation of Dh1.18 trillion ($321.6bn), with the most recent impetus coming from the listing of Alpha Dhabi, a broad investment group with 40,000 employees and revenue of Dh3.8bn.
The company's shares listed on Sunday and have gained 16.4 per cent since, giving It a valuation of Dh174.6 billion. That makes it the fourth-biggest company on the exchange by market cap, behind International Holdings Company (which owns 44 per cent of Alpha Dhabi and is valued at Dh224bn), Etisalat (valued at Dh193.1bn) and First Abu Dhabi Bank (Dh183.2bn).
"It's been an excellent year for ADX," said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital. "May was a strong month for many markets and June continued to be for ADX. It has continued to lead the MSCI Emerging Market Index," he added.
MSCI's emerging market index comprises the biggest and most liquid stocks listed on emerging market exchanges around the world.
MGM Resorts to own CityCenter, buys partner #Dubai World's stake for over $2 bln | Reuters
MGM Resorts to own CityCenter, buys partner Dubai World's stake for over $2 bln | Reuters
MGM Resorts (MGM.N) will buy the remaining 50% stake in its joint venture on the Las Vegas Strip from a unit of investment firm Dubai World for $2.12 billion, the U.S. casino operator said on Thursday.
The venture, CityCenter Holdings, is an urban complex comprising Aria Resort and Casino and Vdara Hotel and Spa.
After buying it from Infinity World Development Corp, MGM said it will sell the two properties to private equity firm Blackstone (BX.N) for $3.89 billion in cash.
The deal is part of MGM's 'asset light' strategy to generate cash by selling real estate and use it for growth avenues such as sports betting and casino development in Japan.
"We expect to continue executing on our asset-light strategy and utilizing the proceeds from our real estate transactions to...secure new growth opportunities," MGM Resorts Chief Executive Bill Hornbuckle said.
Blackstone will lease the Aria and Vdara properties to MGM for an initial annual rent of $215 million, the company said. The deals are expected to close in the third quarter.
MGM's purchase price for CityCenter values the complex at about $5.8 billion, including net debt of $1.5 billion.
MGM shares were up 2.7% after having gained about 35% up to Wednesday's close this year.
MGM Resorts (MGM.N) will buy the remaining 50% stake in its joint venture on the Las Vegas Strip from a unit of investment firm Dubai World for $2.12 billion, the U.S. casino operator said on Thursday.
The venture, CityCenter Holdings, is an urban complex comprising Aria Resort and Casino and Vdara Hotel and Spa.
After buying it from Infinity World Development Corp, MGM said it will sell the two properties to private equity firm Blackstone (BX.N) for $3.89 billion in cash.
The deal is part of MGM's 'asset light' strategy to generate cash by selling real estate and use it for growth avenues such as sports betting and casino development in Japan.
"We expect to continue executing on our asset-light strategy and utilizing the proceeds from our real estate transactions to...secure new growth opportunities," MGM Resorts Chief Executive Bill Hornbuckle said.
Blackstone will lease the Aria and Vdara properties to MGM for an initial annual rent of $215 million, the company said. The deals are expected to close in the third quarter.
MGM's purchase price for CityCenter values the complex at about $5.8 billion, including net debt of $1.5 billion.
MGM shares were up 2.7% after having gained about 35% up to Wednesday's close this year.
#Qatar Investment Authority Holding in Credit Suisse to Rebound - Bloomberg
Qatar Investment Authority Holding in Credit Suisse to Rebound - Bloomberg
The Qatar Investment Authority’s stake in Credit Suisse Group AG is set to rebound after it subscribed to two convertible bonds, taking its holding to over 6%
Earlier this week, the Gulf nation cut its existing holding of 133 million shares to about 128 million shares or 4.8% of Credit Suisse. However, subscription to notes that convert to shares in November grants rights to another 1.168% stake, or an approximate 31 million in shares, according to a regulatory filing.
The Swiss lender raised $2 billion earlier this year from investors through the sale of the notes, in an effort to alleviate any concerns after the firm was hit by a pair of scandals that left it the worst-performing major bank stock in Europe.
Credit Suisse has been hit this year by the blow-ups of Archegos Capital Management and Greensill Capital, which caused billions of dollars in losses and further dents to its reputation.
The Qatar Investment Authority’s stake in Credit Suisse Group AG is set to rebound after it subscribed to two convertible bonds, taking its holding to over 6%
Earlier this week, the Gulf nation cut its existing holding of 133 million shares to about 128 million shares or 4.8% of Credit Suisse. However, subscription to notes that convert to shares in November grants rights to another 1.168% stake, or an approximate 31 million in shares, according to a regulatory filing.
The Swiss lender raised $2 billion earlier this year from investors through the sale of the notes, in an effort to alleviate any concerns after the firm was hit by a pair of scandals that left it the worst-performing major bank stock in Europe.
Credit Suisse has been hit this year by the blow-ups of Archegos Capital Management and Greensill Capital, which caused billions of dollars in losses and further dents to its reputation.
#Kuwait’s Life-After-Oil Fund Swells to a Record $700 Billion - Bloomberg
Kuwait’s Life-After-Oil Fund Swells to a Record $700 Billion - Bloomberg
Kuwait is making strides in an effort to invest its way out of dependency on oil money.
The Future Generations Fund, a national savings pot designed to help the country prepare for life after oil, has risen to about $700 billion, according to a person with knowledge of the matter. Its assets were valued at about $670 billion at the close of the last fiscal year on March 31, the person said, asking not to be named discussing confidential information.
The fund, which is managed by the Kuwait Investment Authority, has more than 50% of its investments in the U.S., where equity markets have been on a tear. The benchmark S&P 500 Index surged more than 8% last quarter, its fifth consecutive three-monthly gain, while the MSCI World Index gained more than 7%.
The portfolio boosted its holdings of U.S. assets when global markets plunged last year as the pandemic spread around the world, the person said. The fund invested in several of the most badly hit U.S. indexes, the person said.
KIA officials couldn’t immediately be reached for comment.
The recent gains follow a record 33% increase during the last fiscal year, according to Finance Minister Khalifa Hamada on Thursday. Growth in the fund over the past five years has exceeded the country’s total revenue from oil for the same period, he said.
Kuwait recorded 66.7 billion dinars ($221 billion) in total oil revenue in the last five years.
The KIA, which also manages the nation’s General Reserve Fund, is the world’s oldest sovereign fund and among the largest, with stakes in ports, airports and power distribution systems around the world. The Future Generations Fund can’t be touched without approval from parliament.
Norway’s Government Pension Fund is the world’s biggest sovereign wealth fund with $1.3 trillion of assets, according to rankings by the Sovereign Wealth Fund Institute. That’s followed by the China Investment Corporation, which manages $1 trillion, and the Abu Dhabi Investment Authority, known as ADIA, with $649 billion.
Kuwait is making strides in an effort to invest its way out of dependency on oil money.
The Future Generations Fund, a national savings pot designed to help the country prepare for life after oil, has risen to about $700 billion, according to a person with knowledge of the matter. Its assets were valued at about $670 billion at the close of the last fiscal year on March 31, the person said, asking not to be named discussing confidential information.
The fund, which is managed by the Kuwait Investment Authority, has more than 50% of its investments in the U.S., where equity markets have been on a tear. The benchmark S&P 500 Index surged more than 8% last quarter, its fifth consecutive three-monthly gain, while the MSCI World Index gained more than 7%.
The portfolio boosted its holdings of U.S. assets when global markets plunged last year as the pandemic spread around the world, the person said. The fund invested in several of the most badly hit U.S. indexes, the person said.
KIA officials couldn’t immediately be reached for comment.
The recent gains follow a record 33% increase during the last fiscal year, according to Finance Minister Khalifa Hamada on Thursday. Growth in the fund over the past five years has exceeded the country’s total revenue from oil for the same period, he said.
Kuwait recorded 66.7 billion dinars ($221 billion) in total oil revenue in the last five years.
The KIA, which also manages the nation’s General Reserve Fund, is the world’s oldest sovereign fund and among the largest, with stakes in ports, airports and power distribution systems around the world. The Future Generations Fund can’t be touched without approval from parliament.
Norway’s Government Pension Fund is the world’s biggest sovereign wealth fund with $1.3 trillion of assets, according to rankings by the Sovereign Wealth Fund Institute. That’s followed by the China Investment Corporation, which manages $1 trillion, and the Abu Dhabi Investment Authority, known as ADIA, with $649 billion.
OPEC+ Oil Deal Hangs in the Balance as Key Member Rebels - Bloomberg #UAE
OPEC+ Oil Deal Hangs in the Balance as Key Member Rebels - Bloomberg
The OPEC+ alliance descended into bitter infighting after a key member blocked a deal at the last minute, forcing the group to postpone its meeting and casting doubt on an agreement that could ease a surge in oil prices.
The standoff between the United Arab Emirates and the rest of the cartel could ultimately mean that OPEC+ won’t increase production at all, according to a delegate. Without a deal it would fall back on existing terms that call for output to remain unchanged until April 2022. That would squeeze an already tight market, risking an inflationary price spike.
The dramatic turn of events leaves the market in limbo -- just as inflationary pressures are fixating investors with oil above $75. It also tarnishes the cartel’s carefully reconstructed reputation, raising the specter of the destructive Saudi-Russia price war of last year.
On Thursday, the Organization of Petroleum Exporting Countries and its allies appeared to have an agreement in principle to boost output by 400,000 barrels a day each month from August to December. It would also have extended the duration of the broader OPEC+ accord, setting the final expiry of the cuts in December 2022 instead of April.
That preliminary agreement was upended by the United Arab Emirates, which said it will block the deal until the baseline for its own cuts is adjusted, effectively raising its production quota, delegates said. Oil prices jumped in response.
The OPEC+ alliance descended into bitter infighting after a key member blocked a deal at the last minute, forcing the group to postpone its meeting and casting doubt on an agreement that could ease a surge in oil prices.
The standoff between the United Arab Emirates and the rest of the cartel could ultimately mean that OPEC+ won’t increase production at all, according to a delegate. Without a deal it would fall back on existing terms that call for output to remain unchanged until April 2022. That would squeeze an already tight market, risking an inflationary price spike.
The dramatic turn of events leaves the market in limbo -- just as inflationary pressures are fixating investors with oil above $75. It also tarnishes the cartel’s carefully reconstructed reputation, raising the specter of the destructive Saudi-Russia price war of last year.
On Thursday, the Organization of Petroleum Exporting Countries and its allies appeared to have an agreement in principle to boost output by 400,000 barrels a day each month from August to December. It would also have extended the duration of the broader OPEC+ accord, setting the final expiry of the cuts in December 2022 instead of April.
That preliminary agreement was upended by the United Arab Emirates, which said it will block the deal until the baseline for its own cuts is adjusted, effectively raising its production quota, delegates said. Oil prices jumped in response.
Oil dips after OPEC+ delays meeting on supply decision | Reuters
Oil dips after OPEC+ delays meeting on supply decision | Reuters
Oil prices inched lower on Friday after OPEC+ ministers delayed a meeting on output policy as the United Arab Emirates balked at a plan to add back 2 million barrels per day (bpd) in the second half of the year.
U.S. West Texas Intermediate (WTI) crude futures were down 10 cents at $75.13 a barrel at 0501 GMT, having jumped 2.4% on Thursday to close at their highest since October 2018.
Brent crude futures inched down 7 cents to $75.77 a barrel, after rising 1.6% on Thursday.
Both benchmark contracts posted strong gains on Thursday over a plan backed by Saudi Arabia and Russia for the Organization of Petroleum Countries and allies, together known as OPEC+, that was more cautious than investors had expected. The proposal was for the producer group to add back 400,000 bpd each month from August through December 2021.
Oil prices inched lower on Friday after OPEC+ ministers delayed a meeting on output policy as the United Arab Emirates balked at a plan to add back 2 million barrels per day (bpd) in the second half of the year.
U.S. West Texas Intermediate (WTI) crude futures were down 10 cents at $75.13 a barrel at 0501 GMT, having jumped 2.4% on Thursday to close at their highest since October 2018.
Brent crude futures inched down 7 cents to $75.77 a barrel, after rising 1.6% on Thursday.
Both benchmark contracts posted strong gains on Thursday over a plan backed by Saudi Arabia and Russia for the Organization of Petroleum Countries and allies, together known as OPEC+, that was more cautious than investors had expected. The proposal was for the producer group to add back 400,000 bpd each month from August through December 2021.
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