OPEC, allies face tough competition in 2020

Growing US crude inventories are putting pressure on oil prices. (AFP)
Updated 29 November 2019

OPEC, allies face tough competition in 2020

  • Shale oil could lose momentum as inventories increase, analysts’ poll warns on eve of major OPEC policy talks

BENGALURU: Oil prices will remain subdued in 2020 as growth concerns weigh on demand and fuel a glut of crude, a Reuters poll showed on Friday ahead of production-policy talks among OPEC and its allies next week.

The poll of 42 economists and analysts forecast Brent to average $62.50 a barrel next year, little changed from last month’s $62.38 outlook, which was the lowest prediction for 2020 in about two years.

The benchmark has averaged about $64 per barrel so far this year.

“There is simply too much oil in the market,” LBBW analyst Frank Schallenberger said.

The Organization of the Petroleum Exporting Countries and its allies face stiffening competition in 2020, the International Energy Agency said this month, predicting non-OPEC supply growth to surge next year.

OPEC’s own outlook reflected a surplus of around 70,000 barrels per day (bpd) next year, building a case for the group to maintain supply curbs when it meets on Dec. 5-6 in Vienna.

Analysts pegged demand growth at 0.8-1.4 million bpd (mbpd) next year. While most respondents said OPEC and its allies were likely to maintain output cuts, they did not anticipate deeper curbs.

“Saudi Arabia is likely to want to keep supporting oil prices to improve its fiscal position. However, the Kingdom probably won’t push for deeper cuts to avoid losing more market share to the US,” Capital Economics analyst Caroline Bain said. “We expect Russia to go pay lip service to Saudi’s decision, but to continue producing above quota.”

Since January, OPEC and its allies have been cutting output by 1.2 mbpd, and had agreed to do so until March 2020.

The first half of 2020 could see global inventory builds as weaker economic growth chips away demand, said Harry Tchilinguirian, global oil strategist at BNP Paribas.

US crude inventories are now about 3 percent above the five-year average for this time of year, the Energy Information Administration said on Wednesday.

Brent prices have been pressured by concerns about slowing global growth, exacerbated by the US-China trade conflict. Prices are down about 12 percent from a roughly four-month peak hit in September.

The 2020 outlook for West Texas Intermediate, however, rose to $57.30 per barrel from October’s $56.98 consensus.

While US production will remain high, overall shale output could lose some momentum, analysts said.

“US shale growth will slow in 2020 and with expectations that OPEC+ will continue with their production cuts, prices should be fairly supported in the first half of the year,” said Edward Moya, senior market analyst at OANDA.


Apple, Google drop Fortnite from app stores over payments

Updated 14 August 2020

Apple, Google drop Fortnite from app stores over payments

  • Google said Fortnite will remain available on Android, just not through its app store
  • Apple and Google both take a 30% cut from in-app revenue purchases in games

NEW YORK: Apple and Google dropped the popular game Fortnite from their app stores after the game’s developer introduced a direct payment plan that bypasses their platforms.
Apple and Google both take a 30% cut from in-app revenue purchases in games, which has long been a sore spot with developers.
Fortnite is free, but users can pay for in game accoutrements like weapons and skins. Its developer, Epic Games, said in a blog post Thursday that it was introducing Epic Direct payments, a direct payment plan for Apple’s iOS and Google Play. Epic said the system is the same payment system it already uses to process payments on PC and Mac computers and Android phones.
Apple and Google said the service violates their guidelines.
“Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services,” Apple said in statement.
Google said Fortnite will remain available on Android, just not through its app store. Android users can download the app from other app stores, although that’s generally not an option for iPhone users.
Epic Games did not immediately return a request for comment. Epic’s Fortnite Twitter account said the company would debut a new short film called “Nineteen Eighty-Fortnite,” a seeming parody of Apple’s iconic “1984” commercial that introduced the Macintosh computer. It has also filed a complaint against Apple in the US District Court in Northern California for dropping Fortnite.