Al-Badri: No need to panic over oil price slide

Updated 29 October 2014

Al-Badri: No need to panic over oil price slide

LONDON: OPEC’s oil production is unlikely to change much in 2015 and there is no need to panic at the crude price drop, OPEC’s secretary general said on Wednesday, adding to indications the exporter group is in no hurry to cut output.
Abdullah Al-Badri also said output of higher-cost oil supplies such as shale would be curbed if oil remained at around $85 a barrel, while the Organization of the Petroleum Exporting Countries enjoys lower costs and will see higher demand for its crude in the longer term.
Oil’s drop below the $100-mark, the level many OPEC members had endorsed, has raised the question of whether OPEC will cut supply when it meets in November. Al-Badri said OPEC’s output was unlikely to change much next year, adding to signs a decision to cut in November is unlikely.
“I don’t think 2015 will be far away from 2014 in terms of production,” Al-Badri told reporters in London at the annual Oil & Money conference. “There is nothing wrong with the market.”
Brent crude has dropped more than a quarter from above $115 per barrel in June as abundant supplies of high-quality oil such as US shale have overwhelmed demand in many markets, filling stocks worldwide.
But lower prices pose a threat to supply outside OPEC. While OPEC’s oil production costs are low, as much as half of shale output would be under threat if prices remain at current levels, Al-Badri said.
“If prices stay at $85, we will see a lot of investment, a lot of oil, going out of the market,” he told the conference. “About 65 percent of the producers, they have high costs. Not OPEC.”
Al-Badri did not predict the outcome of OPEC’s meeting on Nov. 27, saying the decision was up to the group’s oil ministers, and appealed for calm over the decline in prices.
“We do not see much change in the fundamentals. Demand is still growing, supply is also growing. OPEC is reviewing the situation,” he said.
“The most important thing is we should not panic,” he said. “Unfortunately, everybody is panicking. We really need to sit, and think and see how this will develop.”
He dismissed suggestions that OPEC countries, in setting lower official selling prices for their crude oil, have embarked on a price war to preserve market share.
Al-Badri declined to specify a level at which oil prices might find a floor, saying OPEC did not have a price target but would instead leave that to the market.
“OPEC’s average price will still be $100 at the end of this year so we are fine for 2014,” he said.
“The fundamentals do not reflect this low price.”
“OPEC does not have a price target. We must let the market settle down.”
Brent was trading around $87.30 by 1430 GMT after reaching a four-year low of $82.60 two weeks ago.
Al-Badri said last month that he expected OPEC to lower its oil output target when it meets in Vienna, which would be its first formal output cut since the 2008 financial crisis.
OPEC has a production target of 30 million barrels per day (bpd) and Badri suggested last month that this should be cut to around 29.5 million bpd.
Since then, OPEC members Iran and Kuwait have said a cut in output at the meeting was unlikely. Saudi Arabia has yet to comment publicly.
Al-Badri reiterated that supplies from rival producers, such as shale oil, were not a threat to OPEC long-term and said OPEC had to be ready to pump far more in future.
“In the longer term, OPEC must be ready to produce. Around 2018-2020, US tight oil will slow down,” he said. “By 2040, OPEC must be ready to produce 40 million bpd of oil, and 50 million bpd of liquids, that’s crude and natural gas liquids.”

Emirates NBD Q2 profit surges 30 pct as net interest income rises

Updated 18 July 2018

Emirates NBD Q2 profit surges 30 pct as net interest income rises

  • Emirates NBD made a net profit of $716.1 million in the three months to June 30
  • Bank expanded its international operations in May by agreeing to buy Turkey’s Denizbank from Russia’s state-owned Sberbank for $3.2 billion

DUBAI: Emirates NBD (ENBD), Dubai’s largest lender, posted a 30 percent rise in second-quarter net profit on Wednesday, boosted by a climb in net interest income and a drop in provisions to cover bad loans.

The bank made a net profit of 2.63 billion dirhams ($716.1 million) in the three months to June 30, it said in a statement, compared with 2.02 billion dirhams in the corresponding period of 2017.

That was ahead of two analysts’ forecasts. SICO Bahrain forecast the bank would make a net profit for the quarter of 2.31 billion dirhams, while EFG Hermes expected a profit of 2.14 billion dirhams.

Banks in the United Arab Emirates are expected to benefit this year as economic growth recovers and investment in infrastructure picks up ahead of Dubai’s hosting of the World Expo in 2020.

Emirates NBD, 55.6-percent owned by state fund Investment Corp, was boosted by a 20 percent rise in net interest income to 3.25 billion dirhams compared with the same period a year earlier. — Reuters

That helped offset a 3 percent dip in non-interest income to 1.10 billion dirhams as income from investment securities dropped.

Reflecting improved economic conditions, provisions for bad loans eased by 49 percent to 315 million dirhams.

With existing overseas operations in several countries including Egypt, India, Saudi Arabia, Singapore, Britain, Indonesia and China, Emirates NBD expanded its international operations in May by agreeing to buy Turkey’s Denizbank from Russia’s state-owned Sberbank for $3.2 billion.

The bank said a 21 percent increase in costs during the quarter was due to higher staff and IT costs related to its digital and technology transformation, as well as higher costs related to international branch expansion.

The bank’s loan and deposit portfolio increased marginally at the end of June. Loans rose by 4 percent to 316.4 billion dirhams, while deposits increased by 3 percent 335 billion dirhams.