Oil slips as focus shifts from Saudi supply to global demand concerns

Workers start clearing up the damaged facilities at Saudi Aramco’s site in Abqaiq. (Reuters)
Updated 24 September 2019

Oil slips as focus shifts from Saudi supply to global demand concerns

  • ‘The demand side of the equation is back in focus’
  • Saudi Arabia has restored more than 75 percent of crude output lost after the attacks on its facilities

SINGAPORE: Oil prices eased on Tuesday as weak manufacturing data from Europe and Japan focused market attention on the gloomy outlook for demand and away from uncertainty around supply disruptions in Saudi Arabia.
Brent crude futures fell 35 cents to $64.42 a barrel by 0408 GMT, while US West Texas Intermediate (WTI) futures were at $58.36, down 28 cents.
“The demand side of the equation is back in focus,” said Michael McCarthy, senior market analyst at CMC Markets in Sydney, pointing to sluggish manufacturing numbers in leading economies in Europe as well as Japan.
“That’s why we’re seeing a little bit more (downward) pressure on Brent than West Texas at the moment.”
Still, oil prices remained at comparatively elevated levels for the year in the wake of the Sept. 14 attack on Saudi Arabia’s largest oil processing facility that halved output in the world’s top oil exporter.
Reuters reported that Saudi Arabia has restored more than 75 percent of crude output lost after the attacks on its facilities and will return to full volumes by early next week. But the Wall Street Journal reported on Monday that repairs at the plants could take months longer than anticipated.
“Nine days after the oil facility attack in Saudi Arabia (SA), we still see divergent market views on when the damaged supplies will be restored,” analysts at Nomura said in a note.
“While the damaged plants may be repaired in the next couple of weeks, increasing actual oil supplies may require monitoring.”
European powers — Britain, Germany and France — backed the United States in blaming Iran for the Saudi oil attack, urging Tehran to agree to new talks with world powers on its nuclear and missile programs and regional security issues.
Meanwhile a preliminary Reuters poll found on Monday that US crude oil and distillate stockpiles were expected to have dropped last week.
Seven analysts polled by Reuters estimated, on average, that crude inventories fell 800,000 barrels in the week to Sept. 20.
The poll was conducted ahead of key reports from the American Petroleum Institute, an industry group, to be released on Tuesday and from the Energy Information Administration on Wednesday.


Telenor says Huawei will still play a role in 5G rollout

Updated 14 min 54 sec ago

Telenor says Huawei will still play a role in 5G rollout

  • The Norwegian company to continue working with the Chinese tech firm amid US pressure

BRUSSELS: Telenor will use equipment from Huawei in building Norway’s 5G network, the telecoms operator said on Sunday, one of several companies to continue working with the Chinese company despite US pressure.

Huawei faces increased official scrutiny in Europe amid US allegations that it poses a security threat. The company rejects the charges.

State-controlled Telenor on Friday picked Sweden’s Ericsson to help roll out its fifth-generation (5G) telecoms network.

Huawei, with which Telenor has collaborated for more than a decade on 4G, will continue to play a role in modernizing its infrastructure, Hanne Knudsen, Telenor vice president for communications, told Reuters.

“Ericsson has been introduced as a new vendor for 5G RAN, but we will also work with Huawei both to maintain the 4G network and also upgrade to 5G coverage in selected areas of Norway,” Knudsen said in response to written questions.

“Huawei has delivered hardware for RAN, but not for the core network. When they will build 5G in selected areas for the modernization, this is also for RAN, not core,” she said.

Telenor’s Finnish subsidiary DNA also uses Huawei as one of several vendors for 5G RAN, Knudsen said.

RAN, or radio access network, refers to the radios and antenna that connect smartphones to the mobile network, and accounts for the bulk of the cost of a new network. It is not the core.

Telenor is using Finnish company Nokia and Ericsson for building its core network.

Telenor Norway boss Petter-Boerre Furberg told Reuters on Friday that Huawei network components would be phased out over the next four to five years.

Last week, Telefonica Deutschland picked Nokia and Huawei to build its 5G network.