Brent oil inches up on Iran tensions and OPEC, while US crude falls

A trade war between the United States and China has dampened prospects of global economic growth and oil demand. (AFP/File Photo)
Updated 05 July 2019

Brent oil inches up on Iran tensions and OPEC, while US crude falls

  • Both benchmarks were set for their biggest weekly falls in five weeks
  • In the US, new orders for factory goods fell for a second straight month in May

LONDON: Brent oil ticked higher on Friday, supported by tensions over Iran and the decision by OPEC and its allies to extend a supply cut deal until next year, while US benchmark crude prices fell on weak economic indicators.
Brent was up 53 cents at $63.83 per barrel by 1330 GMT. US West Texas Intermediate (WTI) slipped 18 cents to $57.16. The US market was closed on Thursday for a holiday.
Both benchmarks were set for their biggest weekly falls in five weeks.
A trade war between the United States and China has dampened prospects of global economic growth and oil demand, but talks between the two nations resume next week in a bid to resolve the deadlock.
“The truce between the United States and China is not translating into anything in the real economy in the short term,” Petromatrix oil analyst Olivier Jakob said.
“The negotiations still have to happen and until then we will be looking at very weak manufacturing PMIs,” he said referring to Purchasing Managers’ Indices which indicate companies’ optimism about their sector.
German industrial orders fell far more than expected in May, and the Economy Ministry said this sector of Europe’s largest economy was likely to remain weak in the coming months.
In the US, new orders for factory goods fell for a second straight month in May, government data showed, stoking the economic concerns.
The US Energy Information Administration reported on Wednesday a weekly decline of 1.1 million barrels in crude stocks, smaller than the 5 million barrel draw reported by the American Petroleum Institute and less than analyst expectations.
The Organization of the Petroleum Exporting Countries and other producers such as Russia, a grouping known as OPEC+, supported prices by extending their deal on supply cuts.
Tension in the Middle East also offered some support. Iran, already embroiled in a row with the United States, threatened on Friday to capture a British ship after British forces seized an Iranian tanker in Gibraltar over accusations the ship was violating EU sanctions on Syria.
“It is just another sign that the market sentiment is not strong enough to react to those headlines and events, which is quite unusual,” Jakob said.
A Reuters survey found OPEC oil output sank to a new five-year low in June, as a rise in Saudi supply did not offset losses in Iran and Venezuela due to US sanctions and other outages elsewhere in the group.
Oil production by Saudi Arabia, the world’s top crude exporter, was 9.782 million barrels per day (bpd) in June, an OPEC source said, slightly up from 9.67 million bpd in May.


Air Arabia in $14bn deal to buy 120 Airbus A320s

Updated 18 November 2019

Air Arabia in $14bn deal to buy 120 Airbus A320s

  • Air Arabia currently operates a total fleet of 53 Airbus A320 and A321 aircraft
  • The new carrier, Air Arabia Abu Dhabi, will be launched in “due course,” Etihad said at the time

DUBAI: Air Arabia said Monday it would buy 120 Airbus A320s in a deal worth $14 billion that represents a major expansion for the United Arab Emirates low-cost carrier.

“The first delivery is expected to start in 2024,” said Adel Al-Ali, the CEO of Air Arabia, based in the emirate of Sharjah which borders Dubai.

Air Arabia currently operates a total fleet of 53 Airbus A320 and A321 aircraft.

Last month it announced an agreement with Abu Dhabi-based giant Etihad Airways to launch a new low-cost airline based in the UAE capital.

The new carrier, Air Arabia Abu Dhabi, will be launched in “due course,” Etihad said at the time.

Etihad, established in 2003 by the oil-rich Gulf emirate’s government, has faced stiff competition from Dubai aviation giant Emirates and Doha-based Qatar Airways.