OPEC chief says oil market may have upside potential in 2020

OPEC’s production of crude oil and other liquids is expected to decline to 32.8 million barrels per day by 2024. (AFP)
Updated 06 November 2019

OPEC chief says oil market may have upside potential in 2020

  • Mohammed Barkindo appears to downplay the need to cut output more deeply

VIENNA: The oil market outlook for next year may have upside potential, the secretary-general of producer group OPEC said on Tuesday, appearing to downplay any need to cut output more deeply.

The Organization of the Petroleum Exporting Countries and its allies led by Russia will meet in December. The so-called OPEC+ alliance, seeking to boost oil prices, has since January implemented a deal to cut output by 1.2 million barrels per day until March 2020.

OPEC’s Mohammed Barkindo said he was more optimistic about the market outlook for next year than he had been in October, when he had said all options were open including a deeper cut to oil output amid forecasts of oversupply.

“Based on the preliminary numbers, 2020 looks like it will have upside potential,” he told a briefing on Tuesday. “There are definitely brighter spots. The numbers are looking more refined and the picture is looking brighter.”

“The other nonfundamental factors like trade issues that have been impacting negatively on the global economy, the news coming out is more optimistic. We have seen the biggest economy in the world, the US, continuing to defy projections, racing ahead.”

OPEC’s figures suggest there will be excess supply next year due to rising production outside the group. This prospect and issues such as the US-China trade dispute have weighed on oil prices, which at around $62.70 a barrel are down from a 2019 high above $75.

On whether the market looked oversupplied for next year, Barkindo said: “We are not there yet. We will not be able to at this point preempt all the steps that we are working through.”

Those steps, he said, include upcoming meetings of OPEC technical committees, such as its Economic Commission Board, and the next OPEC monthly oil market report, which looks at global demand and supply, due on Nov. 14.

Earlier, Barkindo also said Brazil would be welcome to join the 14-country oil producer group but had not yet made an official request to do so.

“They would be most welcome to join,” he told reporters, adding that consultations had taken place in Riyadh.

Brazilian President Jair Bolsonaro said last month that he wants his country to join OPEC, a move that would add the most significant new producer to the oil cartel for years but met with skepticism in Brazil’s energy industry.

OPEC on Tuesday released its 2019 World Oil Outlook, in which the producer group said it would supply a diminishing amount of oil in the next 5 years as output of US shale and other rival sources expanded. 


France ready to take Trump’s tariff threat to WTO

Updated 08 December 2019

France ready to take Trump’s tariff threat to WTO

  • Macron government will discuss a global digital tax with Washington at the OECD, says finance minister

PARIS: France is ready to go to the World Trade Organization to challenge US President Donald Trump’s threat to put tariffs on French goods in a row over a French tax on internet companies, its finance minister said on Sunday.

“We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches US companies in the same way as EU or French companies or Chinese. It is not discriminatory,” Finance Minister Bruno Le Maire told France 3 television. Paris has long complained about US digital companies not paying enough tax on revenues earned in France.

In July, the French government decided to apply a 3 percent levy on revenue from digital services earned in France by firms with more than €25 million in French revenue and €750 million ($845 million) worldwide. It is due to kick in retroactively from the start of 2019.

Washington is threatening to retaliate with heavy duties on imports of French cheeses and luxury handbags, but France and the EU say they are ready to retaliate in turn if Trump carries out the threat. Le Maire said France was willing to discuss a global digital tax with the US at the Organization for Economic Cooperation and Development (OECD), but that such a tax could not be optional for internet companies.

“If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” Le Maire said.

He added that new EU Commissioner for Economy Paolo Gentiloni had already proposed to restart such talks.

France pushed ahead with its digital tax after EU member states, under the previous executive European Commission, failed to agree on a levy valid across the bloc after opposition from Ireland, Denmark, Sweden and Finland.

The new European Commission assumed office on Dec. 1.