Oil rises as Saudi Arabia signals OPEC cuts to continue under new energy minister

In the US, drilling companies cut the number of operating oil rigs for a third week in a row last week. (Reuters)
Updated 09 September 2019

Oil rises as Saudi Arabia signals OPEC cuts to continue under new energy minister

  • Prices on Monday were also supported by a rise in oil imports in China in August
  • In the US, drilling companies cut the number of operating oil rigs for a third week in a row last week

TOKYO: Oil rose on Monday on expectations that Saudi Arabia, the world’s largest oil exporter, will continue to support output cuts by OPEC and other producers to prop up prices under new energy minister Prince Abdulaziz bin Salman.
Prices climbed for a fourth day and were also supported by comments from the United Arab Emirates’ energy minister that OPEC and its allies are committed to balancing the crude market.
Global benchmark Brent was up 53 cents, or 0.9 percent, at $62.07 a barrel by 0425 GMT, while US West Texas Intermediate was 57 cents, or 1 percent, higher at $57.09 a barrel.
Salman, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), was named to the position on Sunday, replacing Khalid Al-Falih
“The change at the top doesn’t necessarily mean a shift in policy as much as it’s being viewed as a move to improve relations within OPEC and with non-OPEC producers in the wake of the latest Russian compliance fissures,” said Stephen Innes, Asia Pacific market strategist at Axi Trader.
Russia’s oil output in August exceeded its quota under the OPEC+ agreements.
Prices on Monday were also supported by a rise in oil imports in China in August, with shipments to the world’s biggest importer up 3 percent from July and nearly 10 percent higher in the first eight months of 2019 from a year earlier.
“With (refinery) maintenance season wrapping up, oil imports stayed buoyant. Attractive profit margins continue to favor higher imports; despite the industry burdened by higher products inventories,” ANZ Research said in a note.
In the US, drilling companies cut the number of operating oil rigs for a third week in a row last week.


Popeyes flexes its muscles in China as KFC feels the heat

Updated 56 min 49 sec ago

Popeyes flexes its muscles in China as KFC feels the heat

  • Popeyes signed a lease in Shanghai for its first store in China on Monday

SHANGHAI: US fried chicken chain Popeyes wants to become the top chicken brand in China, the chief executive of its parent company said on Tuesday, as it prepares to take on KFC, the leading player in the world’s most populous market.

Popeyes signed a lease in Shanghai for its first store in China on Monday, which is expected to open next year.

The company outlined plans in July to build 1,500 restaurants in China in the coming decade, becoming the last of Toronto-based Restaurant Brands International Inc’s main brands to enter the country.

By contrast, Yum China’s KFC has about 6,300 stores. Yum has said that it is acutely aware there is more opportunity to expand in China, noting that while it was in 1,300 Chinese cities, there are still as many as 800 cities without a KFC store.

Popeyes’ July plan was “just really to put a framework on the short-term potential business,” Jose Cil, RBI’s CEO said in an interview in Shanghai.

“I think we can be the No. 1 chicken brand here in China and all around Asia,” he said, adding that consumers in the region were looking for options. He dismissed concerns that a slowing China economy and trade tensions had dimmed prospects for growth in the long term.

Cil’s remarks comes as the Cajun-inspired fast food chicken chain experiences a surge in popularity in the US after a newly launched fried chicken sandwich went viral on social media.

Demand was such that Popeyes had to stop taking orders after only two weeks before relaunching it this month.

The sandwich will also be offered in China, he said.

Cil noted that RBI’s other two main brands had seen rapid growth in China.

Burger King has expanded to around 1,100 stores in China from less than 100 in 2012. “We think we’ll keep growing at a steady pace,” Cil said.

And Tim Hortons, its Canadian coffee chain, just opened its 28th store in China after launching there in February.

“We are preparing ourselves to be able to accelerate growth in the coming years,” Cil said of
the brand.