Oil prices

LONDON: Oil prices were dragged sharply lower on Friday by weak US fuel demand, fears of a second wave of coronavirus cases in South Korea and a worsening in US-China relations, but were still on track for a hefty monthly gain. July Brent crude fell $1.16, or 3.3 per cent, to $34.13 a barrel by 0927 GMT while the more active August contract fell $1.11, or 3.1 per cent, to $34.92. US West Texas Intermediate (WTI) crude was down $1.28, or 3.8 per cent, at $32.43. Both contracts were on course for their first weekly loss after for consecutive weeks of gains that leave them set for the biggest monthly gains in years thanks to production cuts and optimism over Chinese-led demand recovery, analysts said. WTI is on track for a record monthly gain of 72 per cent in May, with Brent set for a 35 per cent increase that would represent its strongest monthly rise since March 1999. "The global reaction to China's move to propose new security laws for Hong Kong continues to increase, while … [Read more...] about Crude oil prices fall but remains set for biggest monthly gain in years

Back in 2018, ahead of key Assembly elections, the Centre had cut the excise duty at a time when global crude prices were on the ascent in order to minimise any electoral fallout from unchecked fuel costs. The government’s goal of maximising revenue from fuel products to fund welfare measures can only bear fruit if demand for petrol and diesel remains unaffected by the continuing high costs. With curbs on inter-State road transport still in place, contracting automobile sales unlikely to recover any time soon, job losses and pay cuts sure to shrink household budgets, it is hard to see transport fuel demand rebounding to pre-lockdown levels for at least one or two quarters. Add to that the fact that the Centre’s ambitious disinvestment target of ₹2.1-lakh crore for this fiscal had included a stake sale in BPCL, and the petroleum products’ pricing approach gets even more complicated. With potential investors unlikely to be impressed by the lack of autonomy in the … [Read more...] about Oil price pickle: On fuel duty hike

LONDON: High net worth individuals in the Middle East have become the most risk averse among wealthy investors in emerging markets after being hit by the oil price crash, according to an executive at Barclays private bank.The banks' rich clients across emerging markets are shifting towards perceived safer investments, such as dollar assets, equity-paying dividends or selective fixed income, but risk aversion is not as intense as during the global financial crisis, said Salman Haider, Barclays Private Bank's head of global growth markets.In the Middle East, however, caution is much more evident. "In the Middle East the risk appetite levels have fallen a lot," he said in an in interview. "There's a lot more focus on local liquidity, a lot more focus on preserving liquidity."While global stocks have regained some of the ground lost after a rout in March sparked by fears about the economic cost of the pandemic, oil prices remain at depressed levels despite a pickup this month.Haider said … [Read more...] about Middle East rich most cautious after oil plunge, COVID-19 crisis: Barclays

Who needs a loss-making, inflexible oil refinery in a world where demand for petroleum has been obliterated? We’re about to find out.When consumption of transport fuels collapsed this year because of coronavirus, much of the industry moved into survival mode, cutting processing rates and even temporarily stopping refining in some cases. While that helped prop up the industry’s margins for a while, a combination of rising crude costs and still-weak end-user demand are starting to bite.With many oil traders and analysts expecting a slow and uncertain recovery in demand, there’s now an open question about where that leaves refineries supplying tens of billions of barrels of fuel each year. It seems likely that many of the weaker plants will be permanently shuttered.“The Covid situation has accelerated the rationalization process that was always coming,” said Spencer Welch, vice president of oil markets and downstream consulting at IHS Markit. “It will … [Read more...] about View: Covid-19 will hasten the demise of many oil refineries

LONDON: OPEC oil output hit the lowest in two decades in May as Saudi Arabia and other members started to deliver a record supply cut, a Reuters survey found, although Nigeria and Iraq are laggards in making their share of the reduction.On average, the 13-member Organization of the Petroleum Exporting Countries pumped 24.77 million barrels per day (bpd) this month, the survey found, down 5.91 million bpd from April's revised figure.OPEC and its allies last month agreed to an output cut to offset a slump in demand and prices caused by the coronavirus crisis. An easing of government lockdowns and lower supply have helped oil prices more than double compared with a 21-year low below $16 a barrel in April. "OPEC has made a strong start in May with its latest production cut, lowering supply by 5 million bpd versus April," Daniel Gerber, chief executive of Petro-Logistics, which assesses OPEC supply by tracking tanker shipments, told Reuters."However, compliance is far from perfect. With … [Read more...] about OPEC delivers three quarters of record oil cut in May: survey