Oil falls in biggest weekly decline in months on demand worries | Reuters
Oil prices fell about 1% lower on Friday, posting to their steepest weekly losses in months, on worries that travel restrictions to curb the spread of the Delta variant of COVID-19 will derail the global recovery in energy demand.
Crude futures also came under pressure as the dollar strengthened after monthly U.S. job growth came in higher than expected. A stronger dollar makes greenback-denominated oil more expensive for buyers in other currencies. read more
Brent crude oil futures settled down 59 cents, or 0.8%,at $70.70, while U.S. West Texas Intermediate (WTI) crude futures fell 81, or 1.2%, to settle at $68.28 a barrel.
For the week, global benchmark Brent shed more than 6%, its largest week of losses in four months, and WTI tumbled nearly 7% in its biggest weekly decline in nine months.
"The price action we see now is really a function of the macro picture," said Howie Lee, an economist at Singapore bank OCBC. "The Delta variant is now really starting to hit home and you see risk aversion in many markets, not just oil."
Friday, 6 August 2021
#Qatar Airways grounds Airbus jets because of worries over fuselage | Financial Times
Qatar Airways grounds Airbus jets because of worries over fuselage | Financial Times
Qatar Airways has grounded 13 A350s on the orders of its regulator, saying it will refuse to receive any more of the passenger jets until Airbus resolves what the Gulf carrier described as “accelerated” degrading of the fuselage.
The move is the latest instalment of a public spat rumbling between the long-haul specialist and the European manufacturer, which has led to Qatar Airways threatening to halt deliveries unless Airbus fixes the alleged deterioration of the fuselage’s surface underneath the paint.
“With this latest development, we sincerely expect that Airbus treats this matter with the proper attention that it requires,” said Akbar Al Baker, Qatar Airways’ chief executive.
“Qatar Airways expects Airbus to have established the root cause and permanently corrected the underlying condition to the satisfaction of Qatar Airways and our regulator before we take delivery of any further A350 aircraft,” he added.
Why graduates don’t want careers in gas and oil | Financial Times
Why graduates don’t want careers in gas and oil | Financial Times
In the undying scene from the 1967 film The Graduate, the young Benjamin Braddock is at a gruesome party hosted by his parents when he is ambushed by the besuited middle-aged Mr McGuire. Throwing an arm around Benjamin, McGuire guides him through the suburban splendour of the house to the pool. “I just want to say one word to you. Just one word,” begins McGuire. Then, with the air of initiating Benjamin into the great grown-up secret: “Plastics.” A silence falls. Benjamin (played by Dustin Hoffman) eyes McGuire as if he’s deranged and asks, politely: “Exactly how do you mean?” McGuire urges, “There’s a great future in plastics. Think about it. Will you think about it?”
This classic scene of the 1960s’ generational clash — the materialistic old square versus the spiritual young baby boomer — resonates today. We too find ourselves in a burgeoning generational clash, albeit this time with Benjamin’s boomers as the old guard. So far, the clash has mostly been over issues of money, climate and the amorphous concept of “woke”. But, as in the 1960s, it’s also about something closer to home: career choice. Some major professions — and the boomers in them — are becoming taboo for young people.
For decades from the 1970s, the generational clash lapsed. Boomers had been shaped by the 1960s, so when they started families, they didn’t want to be joyless anti-sex authoritarians like some of their own parents. They tried to understand their children rather than merely discipline them. The parent-child relationship evolved into something akin to friendship.
#Saudi Oil Challenged in Asia by Delta and Cheap Alternatives - Bloomberg
Saudi Oil Challenged in Asia by Delta and Cheap Alternatives - Bloomberg
Saudi Arabia’s move to push up the cost of its oil in Asia may backfire as an outbreak of the delta virus variant in China damps demand, while the U.S. and Russia offer more competitively priced alternatives.
Saudi Aramco raised its Arab Medium and Heavy grades by 20 to 30 cents a barrel to the highest in at least four months for September sales to the region. While that’s less than the difference in the Dubai structure Aramco references in its pricing, demand for these medium and heavy-sour barrels may suffer as China battles an outbreak of the highly infectious Covid-19 strain.
U.S. varieties such as Mars -- of a comparable medium quality -- are being offered at rates that are lower than last month, while Russia’s Urals is also becoming cheaper, according to traders who buy and sell those barrels. Brent’s premium to Dubai oil was at $3.38 a barrel as of early Friday, compared with $4.36 a month earlier.
That could lead to Asian refiners seeking to buy lower amounts of contracted volumes from Aramco. Nominations were due Thursday and Aramco will likely notify buyers of their allocations next week. It could also see the spot market stay sluggish after a fairly lackluster July. Cargoes of some Middle Eastern medium and heavy-sour crudes have been falling to discounts against their official selling prices.
The market is also starting to see prompt cargoes offered as the Organization of Petroleum Exporting Countries and its allies restore more production.
China National Petroleum Corp. forecast that the latest Covid-19 wave could wipe out 5% of short-term oil demand in the country, the world’s largest crude importer. Local governments rushed to close off some cities and traffic is already thinner in virus-hit locations.
Saudi Arabia’s move to push up the cost of its oil in Asia may backfire as an outbreak of the delta virus variant in China damps demand, while the U.S. and Russia offer more competitively priced alternatives.
Saudi Aramco raised its Arab Medium and Heavy grades by 20 to 30 cents a barrel to the highest in at least four months for September sales to the region. While that’s less than the difference in the Dubai structure Aramco references in its pricing, demand for these medium and heavy-sour barrels may suffer as China battles an outbreak of the highly infectious Covid-19 strain.
U.S. varieties such as Mars -- of a comparable medium quality -- are being offered at rates that are lower than last month, while Russia’s Urals is also becoming cheaper, according to traders who buy and sell those barrels. Brent’s premium to Dubai oil was at $3.38 a barrel as of early Friday, compared with $4.36 a month earlier.
That could lead to Asian refiners seeking to buy lower amounts of contracted volumes from Aramco. Nominations were due Thursday and Aramco will likely notify buyers of their allocations next week. It could also see the spot market stay sluggish after a fairly lackluster July. Cargoes of some Middle Eastern medium and heavy-sour crudes have been falling to discounts against their official selling prices.
The market is also starting to see prompt cargoes offered as the Organization of Petroleum Exporting Countries and its allies restore more production.
China National Petroleum Corp. forecast that the latest Covid-19 wave could wipe out 5% of short-term oil demand in the country, the world’s largest crude importer. Local governments rushed to close off some cities and traffic is already thinner in virus-hit locations.
The Era of Cheap Natural Gas Ends as Prices Surge by 1,000% - Bloomberg
The Era of Cheap Natural Gas Ends as Prices Surge by 1,000% - Bloomberg
The era of cheap natural gas is over, giving way to an age of far more costly energy that will create ripple effects across the global economy.
Natural gas, used to generate electricity and heat homes, was abundant and cheap during much of the last decade amid a boom in supply from the U.S. to Australia. That came crashing to a halt this year as demand drastically outpaced new supply. European gas rates reached a record this week, while deliveries of the liquefied fuel to Asia are near an all-time high for this time of year.
With few other options, the world is expected to depend more on cleaner-burning gas as a replacement to coal to help achieve near-term green goals. But as producers curb investments into new supply amid calls from climate-conscious investors and governments, it is becoming apparent that expensive energy is here to stay.
“No matter how you look at it, gas will be the transition fuel for decades to come as major economies are committed to reach carbon emission targets,” said Chris Weafer, chief executive officer of Moscow-based Macro-Advisory Ltd. “The price of gas is more likely to stay elevated over the medium-term and to rise over the longer-term.”
Natural gas, used to generate electricity and heat homes, was abundant and cheap during much of the last decade amid a boom in supply from the U.S. to Australia. That came crashing to a halt this year as demand drastically outpaced new supply. European gas rates reached a record this week, while deliveries of the liquefied fuel to Asia are near an all-time high for this time of year.
With few other options, the world is expected to depend more on cleaner-burning gas as a replacement to coal to help achieve near-term green goals. But as producers curb investments into new supply amid calls from climate-conscious investors and governments, it is becoming apparent that expensive energy is here to stay.
“No matter how you look at it, gas will be the transition fuel for decades to come as major economies are committed to reach carbon emission targets,” said Chris Weafer, chief executive officer of Moscow-based Macro-Advisory Ltd. “The price of gas is more likely to stay elevated over the medium-term and to rise over the longer-term.”
#Saudi Aramco’s $75 Billion Dividend Isn’t Enough, Says BofA - Bloomberg
Saudi Aramco’s $75 Billion Dividend Isn’t Enough, Says BofA - Bloomberg
Saudi Aramco’s annual dividend of $75 billion is already the world’s biggest, but the oil producer may have to raise it to follow peers, according to Bank of America.
“A dividend increase is needed to stay competitive,” BofA analysts led by Karen Kostanian said in a research note, ahead of the company’s second-quarter results on Sunday. “Especially given that higher oil prices and OPEC+-driven production increases should support a significant free cash flow increase over the next couple of years.”
The analysts said one option is for Aramco to keep the payout unchanged for the government, which owns 98% of the stock, but raise it for minority shareholders.
Aramco declined to comment.
Saudi Aramco’s annual dividend of $75 billion is already the world’s biggest, but the oil producer may have to raise it to follow peers, according to Bank of America.
“A dividend increase is needed to stay competitive,” BofA analysts led by Karen Kostanian said in a research note, ahead of the company’s second-quarter results on Sunday. “Especially given that higher oil prices and OPEC+-driven production increases should support a significant free cash flow increase over the next couple of years.”
The analysts said one option is for Aramco to keep the payout unchanged for the government, which owns 98% of the stock, but raise it for minority shareholders.
Aramco declined to comment.
#AbuDhabi ADIA's units invest in $1.1bln Brazil Development Fund | ZAWYA MENA Edition
Abu Dhabi ADIA's units invest in $1.1bln Brazil Development Fund | ZAWYA MENA Edition
GLP, a logistics market leader in Brazil, has closed one of the largest logistics-focused funds in Latin America, GLP Brazil Development Partners II (GLP BDP II), whose investors are wholly owned subsidiaries of the Abu Dhabi Investment Authority (ADIA) and Canada Pension Plan Investment Board (CPP Investments).
With BRL 2.63 billion ($530 million) of total equity commitments, GLP BDP II is expected to reach BRL 5.2 billion ($1.1 billion) in assets under management (AUM) when fully leveraged and invested, according to a recent press release.
CPP Investments has allocated BRL 1.04 billion ($210 million) of equity, representing a 39.6% interest.
GLP BDP II will develop nine Class-A logistics parks in prime S?o Paulo submarkets, driven by strong growth in e-commerce.
The Managing Director of Fund Management at GLP, Ralf Wessel, said: "This transaction builds upon our market-leading business in Brazil and provides GLP an opportunity to expand our existing relationships with ADIA and CPP Investments."
Meanwhile, the Managing Director of Global Head of Real Estate at CPP Investments, Peter Ballon, commented: "We expect the GLP BDP II developments to meet an existing market need for high-quality, well-located assets, and to perform well over the long term as demand for logistics facilities and same-day delivery continues to grow."
GLP, a logistics market leader in Brazil, has closed one of the largest logistics-focused funds in Latin America, GLP Brazil Development Partners II (GLP BDP II), whose investors are wholly owned subsidiaries of the Abu Dhabi Investment Authority (ADIA) and Canada Pension Plan Investment Board (CPP Investments).
With BRL 2.63 billion ($530 million) of total equity commitments, GLP BDP II is expected to reach BRL 5.2 billion ($1.1 billion) in assets under management (AUM) when fully leveraged and invested, according to a recent press release.
CPP Investments has allocated BRL 1.04 billion ($210 million) of equity, representing a 39.6% interest.
GLP BDP II will develop nine Class-A logistics parks in prime S?o Paulo submarkets, driven by strong growth in e-commerce.
The Managing Director of Fund Management at GLP, Ralf Wessel, said: "This transaction builds upon our market-leading business in Brazil and provides GLP an opportunity to expand our existing relationships with ADIA and CPP Investments."
Meanwhile, the Managing Director of Global Head of Real Estate at CPP Investments, Peter Ballon, commented: "We expect the GLP BDP II developments to meet an existing market need for high-quality, well-located assets, and to perform well over the long term as demand for logistics facilities and same-day delivery continues to grow."
Oil up, but heads for largest weekly loss since March on demand worries | Reuters
Oil up, but heads for largest weekly loss since March on demand worries | Reuters
Oil prices extended gains on Friday, but remained on track for their biggest weekly decline since March as travel restrictions to curb the spread of the COVID-19 Delta variant are raising concerns about fuel demand.
Brent crude oil futures were up 47 cents at $71.76 a barrel at 0640 GMT while U.S. West Texas Intermediate (WTI) crude futures rose 45 cents to $69.54 a barrel, but both contracts have given up 6% this week, the most since March.
"The price action we see now is really a function of the macro picture," said Howie Lee, an economist at Singapore's OCBC bank.
"The Delta variant is now really starting to hit home and you see risk aversion in many markets, not just oil."
Japan is poised to expand emergency restrictions to more prefectures while China, the world's second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand. read more
Oil prices extended gains on Friday, but remained on track for their biggest weekly decline since March as travel restrictions to curb the spread of the COVID-19 Delta variant are raising concerns about fuel demand.
Brent crude oil futures were up 47 cents at $71.76 a barrel at 0640 GMT while U.S. West Texas Intermediate (WTI) crude futures rose 45 cents to $69.54 a barrel, but both contracts have given up 6% this week, the most since March.
"The price action we see now is really a function of the macro picture," said Howie Lee, an economist at Singapore's OCBC bank.
"The Delta variant is now really starting to hit home and you see risk aversion in many markets, not just oil."
Japan is poised to expand emergency restrictions to more prefectures while China, the world's second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand. read more