Oil up on weak dollar though US-China tensions weigh

A rancher walks past a pump jack in Loving County, Texas. Brent is on track for a fourth straight monthly gain in July and WTI is set to rise for a third month. (Reuters/File)
Short Url
Updated 28 July 2020

Oil up on weak dollar though US-China tensions weigh

  • Hurt by domestic economic concerns, dollar index reaches its lowest since Sept. 2018

SINGAPORE: Oil prices edged higher on Monday helped by a weak dollar and expected US stimulus measures but gains were capped by rising global coronavirus cases and tensions between the United States and China.

Brent crude rose 32 cents, or 0.7 percent, to $43.66 a barrel, while US West Texas Intermediate (WTI) crude was up to $41.62 a barrel or 33 cents.

The US dollar index reached its lowest since September 2018, hurt by deteriorating US-China relations and domestic economic concerns as coronavirus infections showed no sign of slowing.

“Massive monetary stimulus has bullish implications for oil,” analysts from Raymond James said in a note, adding that oil prices have historically moved upwards with inflation spikes and that the current US money supply increase is unprecedented.

Oil price gains were capped by escalating China-US tensions following the closures of consulates in Houston and Chengdu. Global coronavirus cases, meanwhile, exceeded 16 million.

In Asia, fresh lockdowns were imposed and in Europe, Britain imposed a quarantine on travelers returning from Spain.

Brent is on track for a fourth straight monthly gain in July and WTI is set to rise for a third month. Helping are unprecedented supply cuts from the Organization of the Petroleum Exporting Countries and others including Russia.

Output has also fallen sharply in the United States although the US oil rig count rose last week for the first week since March.

Oil demand has improved from the deep trough of the second quarter, although the recovery path is uneven as resumption of lockdowns in the United States and other parts of the world is capping consumption.

“Oil appears to be caught between opposing forces, crushing price volatility and ranges,” said Jeffrey Halley, senior market analyst for the Asia Pacific at OANDA.


Saudi Aramco, Chevron chiefs see global oil demand recovery

Updated 57 min 12 sec ago

Saudi Aramco, Chevron chiefs see global oil demand recovery

  • Amin Nasser says global demand could reach 99 million barrels per day in 2022

Global oil demand is recovering and could return to around pre-pandemic levels next year, the chief executive of Saudi Aramco told an oil and gas conference on Tuesday.
Global demand for oil is likely to recover from the second half of the year and could reach 99 million barrels per day (bpd)in 2022, Amin Nasser said at IHS Markit's online CERAWeek conference.


Diesel demand has recovered globally due to door-to-door deliveries, though jet fuel lags as people avoid long flights, said Chevron CEO Michael Wirth, who spoke on a panel with Nasser.
Oil demand improving in China, India and East Asia, with vaccine deployment as "cause for optimism" in the West, Nasser said.


OPEC says general oil market outlook is positive as energy industry gathers

Updated 02 March 2021

OPEC says general oil market outlook is positive as energy industry gathers

  • Resilient Asia supports oil demand
  • OPEC+ to meet on Thursday
LONDON: OPEC sees the oil market’s outlook as positive in general and the uncertainty that dominated last year is easing, the group’s secretary general said.
“This is a major turnaround from a year ago,” Mohammad Barkindo was quoted as saying on Twitter on Tuesday.
He added that positive global economic developments and resilient demand in Asia were encouraging.
Barkindo spoke ahead of joint technical committee (JTC) meeting for the Organization of the Petroleum Exporting Countries and its allies led by Russia, a group know as OPEC+.
The JTC reviews oil market supply and demand balances as well as compliance of members of the alliance with the agreed cuts.
“It looks good and healthy,” an OPEC delegate said, referring to the latest supply and demand balance for 2021.
“But there are still some thoughts to be cautious,” he added.
Oil company executives at CERAWeek by IHS Markit said that crude demand will rise over the coming decade and that the fossil fuel will remain a crucial part of the energy mix even as renewables draw increasing attention.
Climate change and renewable fuels are taking center stage at this year’s gathering of energy leaders, investors and politicians from around the globe, with oil companies trying to reorient their portfolios after the coronavirus pandemic eroded demand and caused the loss of thousands of jobs.
The industry scaled back investments and cut budgets as prices crashed in 2020, but investments are likely to rebound by next year, said Lorenzo Simonelli, chief executive officer of oil services company Baker Hughes.
“Hydrocarbons are still going to be essential for providing energy to the world,” Simonelli said. “Especially as you look at the near-term future.”
Oil demand may continue to climb over the next decade even as countries work to comply with the Paris climate agreement’s goals for cutting emissions, said Hess Corp. CEO John Hess.
“We don’t think peak oil is around the corner — we see oil demand growing for the next 10 years,” said Hess.
“We’re not investing enough to grow oil and gas in the future,” he said, saying that prices would need to rise to support that investment.

Lebanon currency hits record low as country’s crises worsen

Updated 02 March 2021

Lebanon currency hits record low as country’s crises worsen

  • Syrians also have money blocked in Lebanese banks
  • Minimum wage now $67-a-month

BEIRUT: The Lebanese pound hit a record low against the dollar on the black market on Tuesday as the country’s political crisis deepens with no prospects of new Cabinet in the near future and foreign currency reserves dwindle further.
The dollar was trading at 9,975 Lebanese pounds around noon Tuesday. The previous record was registered in July, when the dollar briefly sold for 9,900 pounds on the black market. The official price remains 1,520 pounds to the dollar.
Lebanon has been hammered by one crisis after another, starting with the outbreak of anti-government protests against the country’s corrupt political class in October 2019. That has been compounded by the coronavirus pandemic and a massive, deadly blast in Beirut’s port last August.
In neighboring Syria — where the economy has been hit by the 10-year conflict, corruption and Western sanctions — the dollar also hit a record on Monday, reaching nearly 3,900 Syrian pounds. The economies of the two neighboring countries are connected and many Syrians have had their money blocked in Lebanese banks that have implemented harsh capital controls.
The massive blast at Beirut’s port last August, when nearly 3,000 tons of ammonium nitrate detonated, killed 211 people and injured more than 6,000. Large parts of the Lebanese capital were badly damaged in the blast.
Prime Minister Hassan Diab’s government resigned six days after the Aug. 4 blast, one of the largest non-nuclear explosions in history. In October, former Prime Minister Saad Hariri was named to form a new Cabinet but nearly five months later, disagreements between him and President Michel Aoun on the shape of the Cabinet has stood in the way of a new government’s formation.
Lebanon has also been in desperate need for foreign currency but international donors have said they will only help the country financially if major reforms are implemented to fight widespread corruption, which has brought the nation to the brink of bankruptcy.
The crash in the local currency will throw more people into poverty. In Lebanon, the minimum wage is 675,000 pounds, or about $67 a month. Before the protests broke out in 2019, the minimum wage was about 450$.
The crisis has driven nearly half the population of the small country of 6 million into poverty. Over 1 million refugees from Syria live in Lebanon.
In December, the World Bank warned that Lebanon’s economy faces an “arduous and prolonged depression,” with real GDP projected to plunge by nearly 20 percent because its politicians refuse to implement reforms that would speed up the country’s recovery.
In March last year, Lebanon defaulted for the first time ever on a payment on its massive debt amid ongoing popular unrest. Lebanon’s debt reached $90 billion or 170 percent of GDP, making it one of the highest in the world.


Energy-related emissions up in December despite pandemic

Updated 02 March 2021

Energy-related emissions up in December despite pandemic

  • Scientists have previously calculated that CO2 emissions fell by 7% during the full year 2020

PARIS: Global energy-related carbon dioxide emissions rose slightly in December compared with the same month of 2019, indicating the sharp drop seen due to the pandemic was short-lived.
Figures released Tuesday by the International Energy Agency show emissions from the production and use of oil, gas and coal were 2% higher in December 2020 than a year earlier. The Paris-based intergovernmental agency said a resurgence in economic activity coupled with a lack of clean energy policies mean many countries are now seeing higher emissions than before the coronavirus outbreak.
“The rebound in global carbon emissions toward the end of last year is a stark warning that not enough is being done to accelerate clean energy transitions worldwide,” said the agency’s executive director, Fatih Birol. “If governments don’t move quickly with the right energy policies, this could put at risk the world’s historic opportunity to make 2019 the definitive peak in global emissions.”
Scientists have previously calculated that CO2 emissions fell by 7% during the full year 2020 as people stayed at home because of the pandemic.
“Our numbers show we are returning to carbon-intensive business-as-usual,” said Birol. “These latest numbers are a sharp reminder of the immense challenge we face in rapidly transforming the global energy system.”
Carbon dioxide is the main greenhouse gas responsible for global warming.
Scientists say that in order to meet the Paris climate accord’s goal of keeping average temperatures from rising by 2 degrees Celsius — ideally no more than 1.5C — compared to pre-industrial times, man-made emissions of CO2 and other planet-heating gases need to reduced to near zero by mid-century.
IEA figures show that China was the only major economy whose emissions grew in 2020, while those in the United States fell by 10% compared to 2019. By December, US energy emissions were close to the levels seen in the same month of 2019, the agency said, attributing this to economic recovery and greater coal use due to higher gas prices and colder weather.


Robert Walters’ annual profit plummets as pandemic wallops hiring globally

Updated 02 March 2021

Robert Walters’ annual profit plummets as pandemic wallops hiring globally

  • Recruiters around the world have struggled with a sharp drop in fees that led some of them to downsize their workforce, while the global health crisis prompted most sectors to freeze hiring

Robert Walters Plc said on Tuesday its annual profit slumped 75%, hit by dismal job hiring globally during the COVID-19 pandemic, though the British recruiter did see signs of recovery in the labor market in the last few months of 2020.
“With new or extended lockdowns still occurring across much of the world, market conditions remain challenging and visibility is limited,” Robert Walters, chief executive officer of the eponymous company said.
Recruiters around the world have struggled with a sharp drop in fees that led some of them to downsize their workforce, while the global health crisis prompted most sectors to freeze hiring.
Trading in early 2021 was in line with market expectations, the company said, adding that it saw some signs of hiring improvement in Asia Pacific, its largest business.
The company, which operates in more than 30 countries, said pretax profit came in at 12.1 million pounds ($16.79 million) for the full year ended Dec. 31, compared with a profit of 47.4 mln pounds last year.
Analysts on an average had expected profit to be roughly 18 million pounds, according to Refinitiv data.


($1 = 0.7206 pounds) (Reporting by Indranil Sarkar in Bengaluru, Editing by Sherry Jacob-Phillips)

Related