Oil piles on losses following OPEC+ deal to boost supply, rising COVID cases | Reuters
Oil slumped $5 a barrel on Monday, closing out its worst day since March, after an OPEC+ agreement to boost output stoked fears of a surplus just as rising COVID-19 infections once again threaten demand.
Crude oil's year-long recovery has stalled out over the last two weeks due to the prospect of new supply undermining the case for higher prices. With the Delta variant of the coronavirus spreading worldwide - fuelling a 70% rise in U.S. infections last week - funds bailed out of long positions on Monday across multiple risk asset groups, including stocks and the dollar. (Graphic on U.S. cases) here
It is still unclear how the variant will affect oil demand. Consumption in the United States, the world’s largest consumer of fuel, has steadily strengthened in recent weeks, but India, the third-biggest importer, has cut back imports due to oversupply and fears of reduced demand.
“The market is very fixated on the potential for the Delta variant exploding,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Because of that, we’re getting a run on the bank.”
Brent crude settled at $68.62 a barrel, losing $4.97, or 6.8%. U.S. oil futures for August delivery, which expires on Tuesday, settled at $66.42, down $5.39, or 7.5%. The September U.S. crude oil futures contract settled at $66.35, down $5.21.
Monday, 19 July 2021
OPEC+ Compromise Deal Still Favors #SaudiArabia and #Russia - Bloomberg
OPEC+ Compromise Deal Still Favors Saudi Arabia and Russia - Bloomberg
Saudi Arabia and Russia clinched a deal for an OPEC+ production increase by partly submitting to the United Arab Emirates’ demands for a more generous quota. But the compromise still leaves Riyadh and Moscow on top.
Of all the adjustments agreed on Sunday to the cartel’s baselines -- the level from which each member’s cuts are measured -- the two largest OPEC+ members awarded themselves the biggest increases.
While the UAE’s baseline will rise by about 330,000 barrels a day to 3.5 million in May 2022 -- a 10% increase -- Moscow and Riyadh’s will jump by 500,000 barrels a day to 11.5 million
That may seem academic. Saudi Arabia has pumped that much only on the rarest of occasions, and the International Energy Agency sees Russia’s true capacity at 10.4 million barrels a day. Yet the generous headroom offered by these large numbers means the two countries will get back to pre-Covid output levels more quickly than fellow members, and keep going even higher if they are able.
As early as November, Saudi Arabia is on track to restore production to March 2020 levels -- before the worst effects of the Covid-19 pandemic and before the price war that briefly pushed the kingdom’s output to a record.
Russia will pass that milestone in April 2022, assuming the 400,000 barrel-a-day monthly production increases are shared out proportionally between the Organization of Petroleum Exporting Countries and its allies.
By September 2022, when OPEC+ expects to have revived all of the oil production halted because of the pandemic, the UAE’s quota limit may still be pumping less than it did before the Covid-19 crisis.
Saudi Arabia and Russia clinched a deal for an OPEC+ production increase by partly submitting to the United Arab Emirates’ demands for a more generous quota. But the compromise still leaves Riyadh and Moscow on top.
Of all the adjustments agreed on Sunday to the cartel’s baselines -- the level from which each member’s cuts are measured -- the two largest OPEC+ members awarded themselves the biggest increases.
While the UAE’s baseline will rise by about 330,000 barrels a day to 3.5 million in May 2022 -- a 10% increase -- Moscow and Riyadh’s will jump by 500,000 barrels a day to 11.5 million
That may seem academic. Saudi Arabia has pumped that much only on the rarest of occasions, and the International Energy Agency sees Russia’s true capacity at 10.4 million barrels a day. Yet the generous headroom offered by these large numbers means the two countries will get back to pre-Covid output levels more quickly than fellow members, and keep going even higher if they are able.
Russia will pass that milestone in April 2022, assuming the 400,000 barrel-a-day monthly production increases are shared out proportionally between the Organization of Petroleum Exporting Countries and its allies.
By September 2022, when OPEC+ expects to have revived all of the oil production halted because of the pandemic, the UAE’s quota limit may still be pumping less than it did before the Covid-19 crisis.
Oil slumps 6% amid OPEC+ deal to boost supply, rising COVID cases | Reuters
Oil slumps 6% amid OPEC+ deal to boost supply, rising COVID cases | Reuters
Oil prices plunged more than $4 a barrel on Monday, headed for its worst day since March, after OPEC+ agreed to boost output, stoking fears of a surplus as rising COVID-19 infections in many countries threaten demand.
Crude oil's year-long surge has been sputtering for most of the last two weeks with the prospect of new supply undermining the case for higher prices. With the Delta variant of the coronavirus spreading, funds bailed out of long positions on Monday.
Brent crude lost $4.23, or 5.8%, at $69.36 a barrel by 11:08 a.m. EDT (1508 GMT). U.S. oil futures were down $4.56, or 6.4%, at $67.25 a barrel.
The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, reached a compromise on Sunday to increase oil supply from August to cool prices, whichhad hit their highest level this month in more than two years.
Oil prices plunged more than $4 a barrel on Monday, headed for its worst day since March, after OPEC+ agreed to boost output, stoking fears of a surplus as rising COVID-19 infections in many countries threaten demand.
Crude oil's year-long surge has been sputtering for most of the last two weeks with the prospect of new supply undermining the case for higher prices. With the Delta variant of the coronavirus spreading, funds bailed out of long positions on Monday.
Brent crude lost $4.23, or 5.8%, at $69.36 a barrel by 11:08 a.m. EDT (1508 GMT). U.S. oil futures were down $4.56, or 6.4%, at $67.25 a barrel.
The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, reached a compromise on Sunday to increase oil supply from August to cool prices, whichhad hit their highest level this month in more than two years.
Oil falls more than $2 after OPEC+ producers agree to raise output | Reuters
Oil falls more than $2 after OPEC+ producers agree to raise output | Reuters
Oil prices fell sharply on Monday after OPEC+ overcame internal divisions and agreed to boost output, sparking concerns about a crude surplus as COVID-19 infections rise in many countries.
Brent crude was down $2.54, or 3.4%, at $71.05 a barrel by 1235 GMT. U.S. oil was down $2.64, or 3.6%, at $69.17 a barrel. Both benchmarks recorded their largest declines since early April.
OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices that this month hit their highest level in more than two years as the global economy recovers from the COVID-19 pandemic.
The group of members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia also agreed new production shares from May 2022.
Oil prices fell sharply on Monday after OPEC+ overcame internal divisions and agreed to boost output, sparking concerns about a crude surplus as COVID-19 infections rise in many countries.
Brent crude was down $2.54, or 3.4%, at $71.05 a barrel by 1235 GMT. U.S. oil was down $2.64, or 3.6%, at $69.17 a barrel. Both benchmarks recorded their largest declines since early April.
OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices that this month hit their highest level in more than two years as the global economy recovers from the COVID-19 pandemic.
The group of members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia also agreed new production shares from May 2022.
De facto #UAE leader arrives in #SaudiArabia amid tensions | Reuters
De facto UAE leader arrives in Saudi Arabia amid tensions | Reuters
The United Arab Emirates' de facto ruler arrived in Saudi Arabia on Monday, state media said, at a time of tensions between the two Gulf allies that led this month to an open standoff over oil policy.
Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan was met by Saudi Crown Prince Mohammed bin Salman in the capital Riyadh.
A public dispute this month between Riyadh and Abu Dhabi disrupted policy setting by OPEC+, an oil producers' group that comprises OPEC and a numver of allies. On Sunday, OPEC+ secured agreement to boost oil supplies after the two Gulf producers reached an understanding. read more
Analysts say increasing economic competition is laying bare differences between Saudi Arabia and the UAE as the kingdom moves to challenge its smaller neighbour's dominance as the region's business, trade and tourism hub.
State media did not say what the Emirati leader would do during the visit.
The United Arab Emirates' de facto ruler arrived in Saudi Arabia on Monday, state media said, at a time of tensions between the two Gulf allies that led this month to an open standoff over oil policy.
Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan was met by Saudi Crown Prince Mohammed bin Salman in the capital Riyadh.
A public dispute this month between Riyadh and Abu Dhabi disrupted policy setting by OPEC+, an oil producers' group that comprises OPEC and a numver of allies. On Sunday, OPEC+ secured agreement to boost oil supplies after the two Gulf producers reached an understanding. read more
Analysts say increasing economic competition is laying bare differences between Saudi Arabia and the UAE as the kingdom moves to challenge its smaller neighbour's dominance as the region's business, trade and tourism hub.
State media did not say what the Emirati leader would do during the visit.
How Cairo cracked down on one of Egypt’s leading businessmen | Financial Times
How Cairo cracked down on one of Egypt’s leading businessmen | Financial Times
Safwan Thabet has long enjoyed a reputation as one of Egypt’s most successful businessmen, nurturing his small family company into the country’s pre-eminent dairy producer despite the Arab state being rocked by social and political unrest over the past decade.
Safwan Thabet has long enjoyed a reputation as one of Egypt’s most successful businessmen, nurturing his small family company into the country’s pre-eminent dairy producer despite the Arab state being rocked by social and political unrest over the past decade.
But now a huge cloud of uncertainty hangs over Juhayna Food Industries as the 75-year-old who founded and chaired the group languishes in Cairo’s notorious Tora prison after being arrested in December over accusations of financing and being a member of a terrorist organisation.
The Cairo-listed company, which counts global fund managers among its investors, hoped Seif el-Din Thabet, Safwan’s son and the chief executive, would steady the ship. But in February, the acting chair was detained and charged with the same offences, leaving the group’s leadership in limbo.
The company’s directors have since had to explain to banks, investors and clients what is going on in the business, which is 51 per cent owned by the Thabet family, while Juhayna’s 4,000 employees fret about the future.
For analysts, the saga epitomises the unpredictability that the private sector faces in Egypt, where President Abdel Fattah al-Sisi’s regime has used the accusation of terrorism to target activists, academics, journalists and business people since ousting the Muslim Brotherhood in a 2013 coup.
At the same time, Sisi, a former army chief, has expanded the military’s footprint across the economy, cowing the private sector as companies find themselves having to contend with the state’s most powerful institution.
Oil Market: Oil Retreats With OPEC+ Deal to Boost Supply, Threat From Delta - Bloomberg video
Oil Market: Latest News in Crude Prices, Production, OPEC - Bloomberg
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#Kuwait said to mull tapping future generations fund to help balance budget | ZAWYA MENA Edition
Kuwait said to mull tapping future generations fund to help balance budget | ZAWYA MENA Edition
Kuwait’s finance ministry is working on a law to allow limited withdrawals from its Future Generations Reserve Fund, Al Anba newspaper reported, citing a document from the Kuwait Investment Authority (KIA).
The proposed legislation which would allow the government to tap the fund in times of need is one of a number of plans under consideration that include the sale of sovereign bonds.
Although the withdrawal from the future generations reserve will affect the reserve, the KIA said it would be a temporary measure that “will not affect the durability of this fund.”
The plan will proceed in tandem with other reforms to public finances according to the investment authority.
The Future Generations Fund, managed by KIA had more than $580 billion in foreign assets at the end of last year, according to ratings agency Fitch.
Kuwait’s finance ministry is working on a law to allow limited withdrawals from its Future Generations Reserve Fund, Al Anba newspaper reported, citing a document from the Kuwait Investment Authority (KIA).
The proposed legislation which would allow the government to tap the fund in times of need is one of a number of plans under consideration that include the sale of sovereign bonds.
Although the withdrawal from the future generations reserve will affect the reserve, the KIA said it would be a temporary measure that “will not affect the durability of this fund.”
The plan will proceed in tandem with other reforms to public finances according to the investment authority.
The Future Generations Fund, managed by KIA had more than $580 billion in foreign assets at the end of last year, according to ratings agency Fitch.
Column: OPEC+ deal should end $100 a barrel crude oil predictions | Reuters
Column: OPEC+ deal should end $100 a barrel crude oil predictions | Reuters
The OPEC+ deal to boost crude oil output from August was always the most likely outcome to the producer group’s earlier impasse, and it should be enough to end market talk of $100 a barrel oil, at least for now.
OPEC+ ministers agreed on Sunday to boost production by 400,000 barrels per day (bpd) from August to December, adding a total of 2 million bpd to global supply by the end of the year.
Additionally the group, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to new production allocations from May 2022, resolving the dispute sparked by the United Arab Emirates (UAE), which had wanted the baseline for its output quota raised.
The UAE will see its baseline gain by about 332,000 bpd from May, while Saudi Arabia and Russia will enjoy increases of 500,000 bpd each, with Iraq and Kuwait getting jumps of 150,000 bpd each.
OPEC+ also plans to end all output restrictions by September 2022, but this will depend on the state of the global oil market around that time.
With the impasse resolved, and more crude returning to global supply, the question for the market is now simple, but difficult to answer.
The OPEC+ deal to boost crude oil output from August was always the most likely outcome to the producer group’s earlier impasse, and it should be enough to end market talk of $100 a barrel oil, at least for now.
OPEC+ ministers agreed on Sunday to boost production by 400,000 barrels per day (bpd) from August to December, adding a total of 2 million bpd to global supply by the end of the year.
Additionally the group, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to new production allocations from May 2022, resolving the dispute sparked by the United Arab Emirates (UAE), which had wanted the baseline for its output quota raised.
The UAE will see its baseline gain by about 332,000 bpd from May, while Saudi Arabia and Russia will enjoy increases of 500,000 bpd each, with Iraq and Kuwait getting jumps of 150,000 bpd each.
OPEC+ also plans to end all output restrictions by September 2022, but this will depend on the state of the global oil market around that time.
With the impasse resolved, and more crude returning to global supply, the question for the market is now simple, but difficult to answer.
Oil drops as OPEC+ agreement raises prospect of more supply | Reuters
Oil drops as OPEC+ agreement raises prospect of more supply | Reuters
Oil prices recouped some losses on Monday, but were still down after OPEC+ overcame internal divisions and agreed to boost output, which sparked concerns about a crude surplus as COVID-19 infections continue to rise in many countries.
Brent crude was down 61 cents, or 0.8%, at $72.98 a barrel by 0617 GMT, after falling to $72.35 earlier in the session. U.S. oil was down 66 cents, or 0.9%, at $71.15 a barrel, having slipped to $70.64 earlier.
OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices that earlier this month climbed to the highest in around 2-1/2 years as the global economy recovers from the COVID-19 pandemic.
The group, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, agreed new production shares from May 2022.
“Oil prices may continue to gyrate in the coming weeks,” Goldman Sachs said after the agreement.
Oil prices recouped some losses on Monday, but were still down after OPEC+ overcame internal divisions and agreed to boost output, which sparked concerns about a crude surplus as COVID-19 infections continue to rise in many countries.
Brent crude was down 61 cents, or 0.8%, at $72.98 a barrel by 0617 GMT, after falling to $72.35 earlier in the session. U.S. oil was down 66 cents, or 0.9%, at $71.15 a barrel, having slipped to $70.64 earlier.
OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices that earlier this month climbed to the highest in around 2-1/2 years as the global economy recovers from the COVID-19 pandemic.
The group, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, agreed new production shares from May 2022.
“Oil prices may continue to gyrate in the coming weeks,” Goldman Sachs said after the agreement.