Oil rebounds as market seizes on discounted prices | Reuters
Crude oil futures rebounded on Tuesday as market participants vied to take advantage of oil's two-month low touched in the previous session.
Monday's selloff, spurred by demand destruction fears amid rising COVID-19 cases, pushed oil about 7% lower and hit other riskier assets. The oil market was also lower on news that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, had reached a deal to boost supply in coming months. read more
"There are bottom pickers trying to get into this dip," said Bob Yawger, director of energy futures at Mizuho in New York.
Brent crude settled up 73 cents, or 1.1%, to $69.35 a barrel after sliding 6.8% on Monday. The global benchmark has fallen from its peak at more than $77 hit in early July - its highest since late 2018.
U.S. crude ended up $1, or 1.5%, to $67.42 in its final day of trading, after hitting a low of $65.21 on Tuesday. The contract fell 7.5% on Monday.
Tuesday, 20 July 2021
Goldman cuts Q3 Brent forecast to $75 a barrel on Delta demand hit | Reuters
Goldman cuts Q3 Brent forecast to $75 a barrel on Delta demand hit | Reuters
Goldman Sachs on Tuesday reduced its forecast for Brent crude oil to $75 a barrel for the third quarter, $5 lower than its previous estimate, as a surge in Delta variant COVID-19 cases takes a toll on demand.
Oil prices fell $5 a barrel on Monday in response to fears over the hit to demand from rising Delta coronavirus infections and an OPEC+ agreement to boost output. [O/R]
“Our oil balances are slightly tighter in 2H21 than previously, with an assumed two-month 1 mb/d demand hit from Delta more than offset by OPEC+ slower production ramp-up,” Goldman said.
The bank now projects a third-quarter deficit of 1.5 million bpd versus 1.9 million bpd forecast previously.
Goldman expects Brent oil prices to average $80 per barrel in the fourth quarter from its previous forecast of $75 and sees a deficit of 1.7 million bpd in the final quarter of this year.
“The oil market repricing to a higher equilibrium is far from over, with the bullish impulse shifting from the demand to the supply side,” the bank said.
Even if vaccinations fail to curb hospitalisation rates, which could drive a longer slump to demand, the decline would be offset by lower OPEC+ and U.S. shale output given current prices, Goldman added.
“Oil prices may continue to gyrate wildly in the coming weeks, given the uncertainties around Delta variant and the slow velocity of supply developments relative to the recent demand gains,” it said.
Goldman also said progress on a U.S.-Iran nuclear deal has stalled leading to increased risks that the potential ramp-up in Iran exports is later than its October base-case.
Goldman Sachs on Tuesday reduced its forecast for Brent crude oil to $75 a barrel for the third quarter, $5 lower than its previous estimate, as a surge in Delta variant COVID-19 cases takes a toll on demand.
Oil prices fell $5 a barrel on Monday in response to fears over the hit to demand from rising Delta coronavirus infections and an OPEC+ agreement to boost output. [O/R]
“Our oil balances are slightly tighter in 2H21 than previously, with an assumed two-month 1 mb/d demand hit from Delta more than offset by OPEC+ slower production ramp-up,” Goldman said.
The bank now projects a third-quarter deficit of 1.5 million bpd versus 1.9 million bpd forecast previously.
Goldman expects Brent oil prices to average $80 per barrel in the fourth quarter from its previous forecast of $75 and sees a deficit of 1.7 million bpd in the final quarter of this year.
“The oil market repricing to a higher equilibrium is far from over, with the bullish impulse shifting from the demand to the supply side,” the bank said.
Even if vaccinations fail to curb hospitalisation rates, which could drive a longer slump to demand, the decline would be offset by lower OPEC+ and U.S. shale output given current prices, Goldman added.
“Oil prices may continue to gyrate wildly in the coming weeks, given the uncertainties around Delta variant and the slow velocity of supply developments relative to the recent demand gains,” it said.
Goldman also said progress on a U.S.-Iran nuclear deal has stalled leading to increased risks that the potential ramp-up in Iran exports is later than its October base-case.
Oil resumes drop as COVID-19 and supply concerns weigh | Reuters
Oil resumes drop as COVID-19 and supply concerns weigh | Reuters
Oil dropped towards $68 a barrel on Tuesday, extending the previous session's steep slide, pressured by concern that rising COVID-19 infections could weaken demand again just when OPEC+ is increasing supply.
Monday's selloff had pushed oil to a two-month low and hit other riskier assets. While equities avoided a new selloff on Tuesday, U.S. Treasury and German bond yields also slipped as a reminder that investors remained worried.
"As things stand, it is hard to see prices staging a comeback unless virus jitters are brought back under control," said Stephen Brennock of oil broker PVM.
"The market is clearly unsettled about the demand outlook."
Brent crude fell 23 cents, or 0.3%, to $68.39 a barrel by 1353 GMT, having slid by 6.8% on Monday. U.S. crude for August , which expires later on Tuesday, was down by $1.19, or 1.8%, at $65.23 after falling 7.5% on Monday. The September U.S. crude contract was down 1.6% at $65.31.
Oil dropped towards $68 a barrel on Tuesday, extending the previous session's steep slide, pressured by concern that rising COVID-19 infections could weaken demand again just when OPEC+ is increasing supply.
Monday's selloff had pushed oil to a two-month low and hit other riskier assets. While equities avoided a new selloff on Tuesday, U.S. Treasury and German bond yields also slipped as a reminder that investors remained worried.
"As things stand, it is hard to see prices staging a comeback unless virus jitters are brought back under control," said Stephen Brennock of oil broker PVM.
"The market is clearly unsettled about the demand outlook."
Brent crude fell 23 cents, or 0.3%, to $68.39 a barrel by 1353 GMT, having slid by 6.8% on Monday. U.S. crude for August , which expires later on Tuesday, was down by $1.19, or 1.8%, at $65.23 after falling 7.5% on Monday. The September U.S. crude contract was down 1.6% at $65.31.
Oil Holds Near Eight-Week Low After Selloff on Delta Concern - Bloomberg
Oil Holds Near Eight-Week Low After Selloff on Delta Concern - Bloomberg
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GlobalFoundries CEO Says Chipmaker Sticking to 2022 IPO Plan - Bloomberg video
GlobalFoundries CEO Says Chipmaker Sticking to 2022 IPO Plan - Bloomberg
GlobalFoundries Inc., a chipmaker owned by an investment arm of the Abu Dhabi government, is sticking with its plan for an initial public offering next year, according to Chief Executive Officer Tom Caulfield.
Reports that GlobalFoundries is the subject of a takeover bid by Intel Corp. are speculation, he said.
“There’s nothing there in that discussion,” Caulfield said Monday in an interview with Bloomberg Television. Because the chipmaker is moving toward a share sale, “you can expect a lot of speculation to take place,” he said.
Intel has studied the feasibility of buying U.S.-based GlobalFoundries, people familiar with the matter said last week, asking not to be identified because deliberations are private. But no formal takeover approach has been made to GlobalFoundries owner Mubadala Investment Co. and the two sides are not engaged in active talks, the people said.
Mubadala created GlobalFoundries by purchasing the manufacturing operations of Advanced Micro Devices Inc. in 2009 and later combining it with Singapore’s Chartered Semiconductor. The fund continues to work with advisers on plans to list the business at a value of around $30 billion, the people said.
“I think they are interested in holding onto GF,” Caulfield said. “They think this asset has become a star in their portfolio.”
Last week a spokesperson for Malta, New York-based GlobalFoundries said there are no talks with Intel. Representatives for Intel and Mubadala declined to comment following a report by the Wall Street Journal that the world’s largest chipmaker was planning a bid.
Contract chipmakers like GlobalFoundries fabricate semiconductors for large technology companies such as Apple Inc., Nvidia Corp. and Amazon.com Inc. Intel, under Chief Executive Office Pat Gelsinger, has stated its ambition to spend heavily to get into that market and challenge Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., two companies that have taken the U.S. company’s manufacturing lead.
Reports that GlobalFoundries is the subject of a takeover bid by Intel Corp. are speculation, he said.
“There’s nothing there in that discussion,” Caulfield said Monday in an interview with Bloomberg Television. Because the chipmaker is moving toward a share sale, “you can expect a lot of speculation to take place,” he said.
Intel has studied the feasibility of buying U.S.-based GlobalFoundries, people familiar with the matter said last week, asking not to be identified because deliberations are private. But no formal takeover approach has been made to GlobalFoundries owner Mubadala Investment Co. and the two sides are not engaged in active talks, the people said.
Mubadala created GlobalFoundries by purchasing the manufacturing operations of Advanced Micro Devices Inc. in 2009 and later combining it with Singapore’s Chartered Semiconductor. The fund continues to work with advisers on plans to list the business at a value of around $30 billion, the people said.
“I think they are interested in holding onto GF,” Caulfield said. “They think this asset has become a star in their portfolio.”
Last week a spokesperson for Malta, New York-based GlobalFoundries said there are no talks with Intel. Representatives for Intel and Mubadala declined to comment following a report by the Wall Street Journal that the world’s largest chipmaker was planning a bid.
Contract chipmakers like GlobalFoundries fabricate semiconductors for large technology companies such as Apple Inc., Nvidia Corp. and Amazon.com Inc. Intel, under Chief Executive Office Pat Gelsinger, has stated its ambition to spend heavily to get into that market and challenge Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., two companies that have taken the U.S. company’s manufacturing lead.
#Qatar Air Ready to Buy Boeing (BA:US), Airbus (AIR:FP) Freighters, Urges Launch - Bloomberg
Qatar Air Ready to Buy Boeing (BA:US), Airbus (AIR:FP) Freighters, Urges Launch - Bloomberg
Qatar Airways Chief Executive Officer Akbar Al Baker said he’s ready to order wide-body freighter planes from Airbus SE or Boeing Co. within a month or two if a new model is made available.
The Gulf carrier could place a “large customer order” for an A350 freighter planned by European manufacturer Airbus or a new 777F from its U.S. rival before the end of the third quarter, Al Baker told the FlightPlan III webinar.
Al Baker has lobbied for the aircraft before, but neither planemaker has committed to making a freighter version of the passenger jumbo-jets. His urgency highlights how important burgeoning cargo demand has become to airlines whose long-haul passenger markets remain blighted by the coronavirus crisis.
Qatar Airways Chief Executive Officer Akbar Al Baker said he’s ready to order wide-body freighter planes from Airbus SE or Boeing Co. within a month or two if a new model is made available.
The Gulf carrier could place a “large customer order” for an A350 freighter planned by European manufacturer Airbus or a new 777F from its U.S. rival before the end of the third quarter, Al Baker told the FlightPlan III webinar.
Al Baker has lobbied for the aircraft before, but neither planemaker has committed to making a freighter version of the passenger jumbo-jets. His urgency highlights how important burgeoning cargo demand has become to airlines whose long-haul passenger markets remain blighted by the coronavirus crisis.
Trucks Stuck as #Saudi-#UAE Competition Spreads to Trade - Bloomberg
Trucks Stuck as Saudi-UAE Competition Spreads to Trade - Bloomberg
Trucks are lined up for hours at the border between Saudi Arabia and the United Arab Emirates as some international manufacturers find their goods snarled up in a deepening economic rivalry that’s raised the cost of doing business and complicated growth plans.
Saudi Arabia, the UAE’s fifth-largest trading partner, has imposed new rules excluding items made in free zones from preferential tariff arrangements meant to facilitate the free flow of goods within the six-member Gulf Cooperation Council.
The measures are having the greatest impact on some companies operating out of free zones in the UAE, home to Middle East business hub Dubai. They’re already affecting a bilateral trading relationship that was worth a total $15.26 billion last year.
Confusion over the rules means trucks have been delayed for clearance at the border since they came into effect on July 9, with some shipments already being turned away, the head of a regional haulage company and manager at an international freight forwarder said. The volumes of cargo heading into Saudi Arabia from the UAE have dropped significantly as a result, the haulage chief said, declining to be named because of the sensitivities over the new rules.
Saudi authorities are looking out for free zone for products that have a “Made in UAE” stamp on them but don’t have added UAE production value, they said. Firms must satisfy requirements including a workforce of 10%-25% citizens to avoid fees, which is particularly tough for any business in the UAE -- where 90% of the population are expatriates -- to fulfill.
While the Gulf neighbors have, for now, managed to end an impasse over oil policy that roiled global energy markets in recent weeks, the frictions over trade suggests their broader competition isn’t yet abating.
Trucks are lined up for hours at the border between Saudi Arabia and the United Arab Emirates as some international manufacturers find their goods snarled up in a deepening economic rivalry that’s raised the cost of doing business and complicated growth plans.
Saudi Arabia, the UAE’s fifth-largest trading partner, has imposed new rules excluding items made in free zones from preferential tariff arrangements meant to facilitate the free flow of goods within the six-member Gulf Cooperation Council.
The measures are having the greatest impact on some companies operating out of free zones in the UAE, home to Middle East business hub Dubai. They’re already affecting a bilateral trading relationship that was worth a total $15.26 billion last year.
Confusion over the rules means trucks have been delayed for clearance at the border since they came into effect on July 9, with some shipments already being turned away, the head of a regional haulage company and manager at an international freight forwarder said. The volumes of cargo heading into Saudi Arabia from the UAE have dropped significantly as a result, the haulage chief said, declining to be named because of the sensitivities over the new rules.
Saudi authorities are looking out for free zone for products that have a “Made in UAE” stamp on them but don’t have added UAE production value, they said. Firms must satisfy requirements including a workforce of 10%-25% citizens to avoid fees, which is particularly tough for any business in the UAE -- where 90% of the population are expatriates -- to fulfill.
While the Gulf neighbors have, for now, managed to end an impasse over oil policy that roiled global energy markets in recent weeks, the frictions over trade suggests their broader competition isn’t yet abating.
Oil rises but COVID-19, supply concerns cloud outlook | Reuters
Oil rises but COVID-19, supply concerns cloud outlook | Reuters
Oil prices stabilised on Tuesday after slumping around 7% in the previous session amid a broader market retreat led by concerns about rising COVID-19 infections, which came just as producers inked a new supply deal.
Brent crude gained 70 cents, or 1%, to $69.32 a barrel by 0651 GMT. The U.S. crude contract for August delivery, which expires later on Tuesday, was up 86 cents, or 1.3%, at $67.28 a barrel. U.S. crude for September delivery was up around 1.2% at $67.14 a barrel.
The selloff, which pushed prices to their lowest in two months, was driven by concerns about the Delta variant of the coronavirus that is rampaging through populations, analysts said, with equities falling and bonds rising.
“Rising cases of the Delta variant of the coronavirus in some Asian and European countries and possibilities of travel restrictions have increased crude oil demand uncertainty to some extent,” analysts at ING Economics said in a note.
“However, the crude oil physical market has been tight over recent months, with the ongoing economic recovery likely to remain supportive for oil demand over the second half of the year,” they said.
Oil prices stabilised on Tuesday after slumping around 7% in the previous session amid a broader market retreat led by concerns about rising COVID-19 infections, which came just as producers inked a new supply deal.
Brent crude gained 70 cents, or 1%, to $69.32 a barrel by 0651 GMT. The U.S. crude contract for August delivery, which expires later on Tuesday, was up 86 cents, or 1.3%, at $67.28 a barrel. U.S. crude for September delivery was up around 1.2% at $67.14 a barrel.
The selloff, which pushed prices to their lowest in two months, was driven by concerns about the Delta variant of the coronavirus that is rampaging through populations, analysts said, with equities falling and bonds rising.
“Rising cases of the Delta variant of the coronavirus in some Asian and European countries and possibilities of travel restrictions have increased crude oil demand uncertainty to some extent,” analysts at ING Economics said in a note.
“However, the crude oil physical market has been tight over recent months, with the ongoing economic recovery likely to remain supportive for oil demand over the second half of the year,” they said.
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