LONDON: OPEC warned on Tuesday that an oil supply glut could emerge in 2019 as the world economy slows and supply from rival producers rises more quickly than expected, building a case for cutting output at a meeting next month.
Worried by a price drop and rising supplies, OPEC is talking again of reducing production just months after increasing it. Such a shift would worsen relations with US President Donald Trump, who on Monday urged OPEC not to cut supply.
In a monthly report, the Organization of the Petroleum Exporting Countries said world oil demand next year would rise by 1.29 million barrels per day, 70,000 bpd less than predicted last month and the fourth consecutive reduction in its forecast.
Non-OPEC supply would rise by 2.23 million bpd, the Vienna-based organization said, 120,000 bpd more than previously thought.
“Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market,” OPEC said in the report.
“The recent downward revision to the global economic growth forecast and associated uncertainties confirm the emerging pressure on oil demand observed in recent months.”
Together with Russia and other non-OPEC producers, OPEC had agreed in June to boost supply after pressure from Trump to lower prices, partially unwinding output cuts that began in January 2017.
The group meets on December 6 to set policy for 2019.
OPEC warns of 2019 oil glut as demand slows, rival supply rises
OPEC warns of 2019 oil glut as demand slows, rival supply rises
- OPEC is talking again of reducing production just months after increasing it
- The group meets on December 6 to set policy for 2019
New Saudi draft project to regulate direct market entry of listed companies’ subsidiaries
RIYADH: The Saudi Capital Market Authority has launched a draft regulation for the direct listing of subsidiaries of companies already listed on the main market, inviting stakeholders to provide feedback over a 30-day period, according to a statement issued today.
The proposed framework aims to allow subsidiaries of main-market companies to list their shares directly on the main market without undergoing an initial public offering, thereby shortening timelines, streamlining procedures, and reducing the costs associated with listing on the Saudi stock market.
It also seeks to create more investment opportunities in the Saudi financial market, contributing to market depth and product diversification, while maintaining high levels of transparency and protecting investors’ rights.
The proposals enable the issuer and its financial advisor to share information about the company and its financial statements with a select group of potential investors before obtaining CMA approval for the share registration request, allowing them to assess their interest in a direct listing on the main market.
They also allow a specific group of licensed financial advisory firms to prepare research and financial reports, provided these are not published before CMA approval.
The proposed framework emphasizes the importance of proper disclosure by setting out requirements for registering shares on the main market, including submitting a registration document to the CMA.
It also specifies the information that must be included in the registration document, such as the method for determining the reference share price and the risks associated with this method.
Under the draft regulation, securities offering rules, ongoing obligations, and the CMA’s glossary of terms and regulations will be updated to allow this type of listing.
This approach is expected to bring multiple benefits, including maximizing the overall value of the main market with lower risk by listing companies that have greater knowledge and experience of market regulations, as well as deepening the market by increasing the number of listed companies across multiple sectors.
