Deeper oil supply cut ‘an option,’ says OPEC chief

Oil prices have failed to gain a lasting boost from supply disruptions this year, including the attack on the Saudi Aramco oil installations in Abqaiq, Saudi Arabia. (Reuters)
Updated 10 October 2019

Deeper oil supply cut ‘an option,’ says OPEC chief

  • Slowing global growth raises prospect of long-term production cutbacks ahead of policy summit

LONDON: A deeper cut in oil supplies is among options for OPEC and its allies to consider in December, its secretary general said on Thursday as the producer group’s forecasts pointed to slower global growth and lower demand next year.

OPEC, Russia and other producers, an alliance known as OPEC+, have since January implemented a deal to cut oil output by 1.2 million barrels per day to support the market. The pact runs to March 2020 and the producers meet to set policy on Dec. 5-6.

“The conference will take appropriate, strong, positive decisions that will set us on the path of heightened and sustained stability for 2020,” Mohammad Barkindo said at a briefing in London.

“All options are open,” he said, when asked about the prospect of a deeper oil supply cut.

Oil prices have failed to gain a lasting boost from supply disruptions this year, including the attack last month on Saudi Arabian oil installations that briefly shut down more than half of production in the world’s top exporter.

HIGHLIGHTS

• OPEC, allies meet on Dec. 5-6 in Vienna.

• Options on the table include deeper oil supply cut.

• December meeting likely to set policy for 2020.

Brent crude was trading near $58 a barrel, down from a 2019 high near $75 in April. Concern about weaker economies and demand due to uncertainties such as Brexit and the US-China trade dispute have overshadowed lower supply.

While the last meetings of OPEC and its allies in July decided on supply for the next nine months, the next meeting in Vienna will likely take a longer view.

“We will be faced with real data for 2020 that will enable us to review the current arrangement and come up with a decision that probably will cover the whole of the year,” Barkindo said.

OPEC separately released its October monthly oil market report on Thursday in which it trimmed its forecast for world economic growth in 2020 to 3 percent from 3.1 percent, saying “it seems increasingly likely that the slowing growth momentum in the US will carry over to 2020.”

Barkindo sounded a more upbeat tone, saying data was preliminary and could surprise to the upside.

In a forecast that could press the case for further supply restraint, OPEC predicts a drop in demand for OPEC crude next year due to higher supply from rivals such as the US.


Canadian firm pulls out of Carrefour takeover after France insists ‘No’

Updated 16 January 2021

Canadian firm pulls out of Carrefour takeover after France insists ‘No’

  • Carrefour has more than 12,300 stores in more than 30 countries and employs 320,000 people worldwide
  • Canada's Couche-Tard has offered to take over the French supermarket giant for 16 billion euro ($19.5 billion)

PARIS: Canadian convenience store chain Couche-Tard has reportedly pulled out of a multi-billion euro takeover of supermarket giant Carrefour after the French government said it would veto the deal.
Negotiations over the 16 billion euro ($19.5 billion) deal ended after a meeting between the French Minister of the Economy Bruno Le Maire and the founder of Couche-Tard Alain Bouchard, Bloomberg news agency said, citing sources.
French ministers had insisted Friday they would not agree to the takeover because it could jeopardize food security, an even more important consideration given the coronavirus pandemic.
In an attempt to reassure ministers, Bouchard had promised to invest billions in Carrefour, said he would maintain employment for two years and that the group would be listed on the Paris Stock Exchange in parallel with Canada, Bloomberg reported.
Contacted by AFP, neither Couche-Tard nor Carrefour had confirmed the information on Friday evening.
Although talks had stopped, anonymous sources cited by Bloomberg said negotiations could resume if the French government changes its position.
But on Friday, France’s Economy Minister made his choice public, telling BMTV and RMC: “My position is a polite, but clear and definitive ‘No’.”
“Food security is a strategic consideration for our country and one does not just hand over one of the large French distributors like that,” Le Maire said.
“Carrefour is the biggest private sector employer in France with nearly 100,000 employees,” he noted, and the group accounts for 20 percent of the food distribution market in the country.
The French statements have not convinced the Canadian government.
A Canadian federal source said while they could understand concerns over allowing a foreign firm to take over such a large national employer, concerns over food security were unsubstantiated.
“But we cannot accuse a leading Canadian company like Couche-Tard of endangering the food sovereignty of an entire country,” the source, who requested anonymity, told AFP.

'Food sovereignty'
On Wednesday, Couche-Tard submitted a non-binding offer for Carrefour, valuing the group at more than 16 billion euros ($19.5 billion).
Le Maire made clear immediately that he was not in favor of a deal involving “an essential link in food security for the French, of food sovereignty.”
The government’s reaction had caused “surprise” at Carrefour itself, according to sources who said the comments were “premature” given that merger discussions had barely begun.
“We haven’t decided yet whether the interest shown is attractive for us,” one company official said on condition of anonymity earlier in the week.
Carrefour has more than 12,300 stores of various formats in more than 30 countries and in 2019 generated a net profit of 1.3 billion euros ($1.5 billion) on revenue of 80.7 billion euros ($97.4 billion).
It employs 320,000 people worldwide.
Couche-Tard has a worldwide network of more than 14,200 stores and earned a net profit of $2.4 billion on sales of $54 billion in its last complete year.
In the United States and several European countries, as well as in Latin America and southeast Asia, it operates under Circle K and other brands.