Oil falls 1% on weaker oil demand growth, surprise gain in US crude stocks

The US Energy Information Administration lowered its 2019 world oil demand growth forecast by 160,000 barrels per day (bpd) to 1.22 million bpd. (Reuters)
Updated 12 June 2019

Oil falls 1% on weaker oil demand growth, surprise gain in US crude stocks

  • The US Energy Information Administration lowered its 2019 world oil demand growth forecast by 160,000 barrels per day (bpd) to 1.22 million bpd

SEOUL: Oil prices fell more than 1 percent on Wednesday, weighed down by a weaker oil demand outlook and a rise in US crude inventories despite growing expectations of ongoing OPEC-led supply cuts.
Brent crude futures, the international benchmark for oil prices, were down 87 cents, or 1.4 percent, at $61.42 a barrel by 0231 GMT.
US West Texas Intermediate (WTI) crude futures were down 85 cents, or 1.6 percent, at $52.41 per barrel.
The US Energy Information Administration (EIA) cut its forecasts for 2019 world oil demand growth and US crude oil production in a monthly report released on Tuesday.
The EIA lowered its 2019 world oil demand growth forecast by 160,000 barrels per day (bpd) to 1.22 million bpd and wound back its forecast for 2019 US crude production to 12.32 million bpd, 140,000 bpd less than the May forecast.
A surprise increase in US crude stockpiles also kept oil prices under pressure.
“Investors have been concerned about the recent rise in stockpiles in the US,” ANZ bank said in a note.
US crude inventories rose by 4.9 million barrels in the week ended June 7 to 482.8 million barrels, according to data from the American Petroleum Institute (API) on Tuesday. That compared with analysts’ expectations for a decrease of 481,000 barrels.
Official data from the Energy Information Administration is due at 10:30 A.M. EDT (1430 GMT) on Wednesday.
Alongside concerns about rising supply, ongoing trade tensions between the United States and China, the world’s two biggest oil consumers, weighed on prices. US President Donald Trump said on Tuesday he was holding up a trade deal with China.
“Oil prices have struggled to retain bullish gains as traders stay cautious over heightened geopolitical risks and persistent weakness in the global economic backdrop,” said Benjamin Lu, commodities analyst at Phillips Future in Singapore.
With the next meeting of the Organization of the Petroleum Exporting Countries (OPEC) set for the end of June, the market is eyeing whether the world’s major oil producers would prolong their supply cuts.
OPEC, along with non-members including Russia in a group called OPEC+, have limited their oil output by 1.2 million bpd since the start of the year to prop up prices.
The Energy Minister for the United Arab Emirates Suhail Al-Mazroui said on Tuesday that OPEC members were close to reaching an agreement on continuing production cuts.
OPEC is set to meet on June 25, followed by talks with its allies led by Russia on June 26. But Russia suggested a date change to July 3 to 4, sources within the group previously told Reuters.


Abu Dhabi carrier Etihad launches more fuel-efficient Boeing 787 Dreamliner

Updated 18 November 2019

Abu Dhabi carrier Etihad launches more fuel-efficient Boeing 787 Dreamliner

  • Etihad’s CEO Tony Douglas described the aircraft as a flying laboratory for testing that could benefit the entire industry
  • This year, Etihad flew the world’s first passenger flight using sustainable biofuel made from a plant that grows in saltwater

DUBAI: Abu Dhabi’s flagship carrier Etihad Airways announced on Monday it is launching one of the world’s most fuel-efficient long-haul airplanes as the company seeks to save costs on fuel and position itself as a more environmentally-conscious choice for travelers.
Etihad’s “Greenliner” is a Boeing 787 Dreamliner that will depart on its first route from Abu Dhabi to Brussels in January 2020. Etihad’s CEO Tony Douglas described the aircraft as a flying laboratory for testing that could benefit the entire industry.
With fuel costs eating up around a quarter of airline spending, Douglas said the goal of the Greenliner is to be 20 percent more fuel efficient than other aircraft in Etihad’s fleet.
“This is not just a box-ticking exercise,” he told reporters at the unveiling of the initiative at the Dubai Airshow alongside executives from Boeing.
Douglas said the aircraft “not only makes sense economically from a profit and loss account point of view, but because it also directly impacts the CO2 because of the fuel burn.”
Etihad has reported losses of $4.75 billion since 2016 as its strategy of aggressively buying stakes in airlines from Europe to Australia exposed the company to major risks.
Despite its financials, the airline continues to be among the most innovative.
This year, Etihad flew the world’s first passenger flight using sustainable biofuel made from a plant that grows in saltwater. It also became the first in the Middle East to operate a flight without any single-use plastics on board to raise awareness of the effects of plastic pollution.
Aviation accounts for a small but rapidly growing share of greenhouse-gas emissions — about 2.5 percent worldwide. But forecasters expect air travel to grow rapidly in the coming years.
Etihad says it plans to make the Greenliner a “social media star” to bring under sharper focus its developments and achievements worldwide. Douglas said anything that Eithad learns with Boeing from this aircraft’s operations will be open domain knowledge “because it’s about moving the industry forward in a responsible fashion.”
“We’re like a millennial and like all good millennials, they’re really focused on the environment and the sustainability agenda,” Douglas said, referring to Etihad’s 16 years in operation.
The Greenliner will be the only aircraft of its kind in Etihad’s fleet of Dreamliners. The company currently has 36 of the 787s in its fleet with plans to operate 50.
“This is a small step today, but in a very, very long journey,” Douglas said.