Oil prices fall as US stockpiles rise, but Middle East tensions support

The UAE-flagged A. Michel, one of the four tankers damaged in alleged ‘sabotage attacks,’ off the coast of Fujairah in this photo released by the Emirati National Media Council. (Emirati National Media Council/AFP)
Updated 15 May 2019
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Oil prices fall as US stockpiles rise, but Middle East tensions support

  • US crude stockpiles unexpectedly rose last week, data from industry group the American Petroleum Institute show
  • Armed drones struck two of Saudi Arabia’s oil pumping stations, days after the sabotage of oil tankers near the UAE

TOKYO: Oil fell on Wednesday after data showed a surprise rise in US crude stockpiles and as Chinese industrial output grew less than expected in April, but prices were supported by mounting tensions in the Middle East.
Brent crude futures were at $71.06 a barrel at 0646 GMT, down 18 cents, or 0.3 percent, from their last close. Brent ended 1.4 percent higher on Tuesday.
US West Texas Intermediate (WTI) crude futures were at $61.33 per barrel, down 45 cents, or 0.7 percent, from their previous settlement. WTI closed up 1.2 percent in the previous session.
US crude stockpiles unexpectedly rose last week, while gasoline and distillate inventories increased, data from industry group the American Petroleum Institute showed on Tuesday.
Crude inventories climbed by 8.6 million barrels in the week to May 10 to 477.8 million, compared with analyst expectations for a decrease of 800,000 barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.1 million barrels, the API said.
The US Energy Department’s Energy Information Administration (EIA) reports official numbers later on Wednesday.
“If the EIA report confirms a strong build we could see that weigh on oil prices ... but too many geopolitical risks remain that should keep prices supported,” Edward Moya, senior market analyst at OANDA told Reuters by email.
Oil prices have drawn support after Saudi Arabia on Tuesday said armed drones struck two of its oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates, while the US military said it was braced for “possibly imminent threats to US forces in Iraq” from Iran-backed forces.
The attacks took place against a backdrop of US-Iranian tension following Washington’s decision this month to try to cut Iran’s oil exports to zero and to beef up its military presence in the Gulf in response to what it said were Iranian threats.
Meanwhile, the Organization of the Petroleum Exporting Countries on Tuesday said that world demand for its oil would be higher than expected this year as supply growth from rivals including US shale producers slows. That points to a tighter market if the exporter group refrains from raising output.
Elsewhere, growth in China’s industrial output slowed more than expected to 5.4 percent in April from a 4-1/2 year high in March, reinforcing views that Beijing will have to roll out more stimulus measures as a trade war with the United States intensifies.
US President Donald Trump on Tuesday called the trade war with China “a little squabble” and insisted talks between the world’s two largest economies had not collapsed.
“I think the markets are anxiously awaiting trade progress since the political damage of a catastrophic end of talks could cost President Trump re-election in 2020,” Moya said.
“Trump is motivated to make a deal happen and we should see a framework agreement reached by the G20 summit (next month),” he said.


British Airways to resume Pakistan flights next week after a decade

Updated 23 May 2019
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British Airways to resume Pakistan flights next week after a decade

  • BA halted service to Pakistan in the wake of the 2008 Marriott Hotel bombing in Islamabad
  • BA will begin the London Heathrow-Islamabad service with the Boeing 787 Dreamliner

ISLAMABAD: British Airways will resume flights to Pakistan next week a decade after it suspended operations following a major hotel bombing, becoming the first Western airline to restart flights to the South Asian country.

BA halted service to Pakistan in the wake of the 2008 Marriott Hotel bombing in the capital Islamabad that took place during a period of devastating Islamist militant violence in Pakistan.

Security has since improved, with militant attacks sharply down in the mainly Muslim country of 208 million people, reviving Pakistan as a destination for tourist and investors.

“The final touches are coming together for the airline’s return ahead of the first flight on Sunday June 2,” British Airways said in a statement. It will launch a three-per-week service to London Heathrow, it said.

“We’re on board,” Pakistani Civil Aviation spokeswoman Farah Hussain said about the flights resumption.

BA, which is owned by Spanish-registered IAG, will begin the London Heathrow-Islamabad service with the airline’s newest long-haul aircraft, the Boeing 787 Dreamliner.

At present, only loss-making national carrier Pakistan International Airlines (PIA) flies directly from Pakistan to Britain, but its ageing fleet of planes is a frequent source of complaints by passengers.

Middle Eastern carriers Qatar Airways, Etihad Airways and Emirates have a strong presence in Pakistan and have been eating into PIA’s dwindling market share. Turkish Airlines also lays on a regular service to Pakistan.

Islamabad has been running international advertising campaigns to rejuvenate its tourism sector, which was wiped out by Islamist violence that destabilised the country following the Sept. 11, 2001 attacks in the United States and the U.S.-led war in Afghanistan.

“We hope customers in both the UK and Pakistan will enjoy the classically British service we offer, with thoughtful bespoke touches,” Andrew Brem, Chief Commercial Officer at British Airways, said in BA’s statement.

BA said there will be a halal meal option in every cabin and the airline would also ensure sauces in every meal do not contain alcohol or pork.