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

Updated 29 October 2014
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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.”


Shopping ‘Star Trek’ style becomes next frontier for most major brands

Updated 18 June 2018
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Shopping ‘Star Trek’ style becomes next frontier for most major brands

  • The use of smart speakers has expanded the possibilities available through smartphone chatbots or text-based systems, including those from Facebook and Apple.
  • Voice shopping is expected to jump to $40 billion annually in 2022 in the US, from $2 billion today, according to a survey this year by OC&C Strategy Consultants.

WASHINGTON: Voice shopping using smart speakers and smartphone apps is starting to gain traction among consumers, opening up a new “conversational commerce” channel and potentially disrupting the retail sector.

Devices such as Amazon’s Alexa-powered speakers and Google Home, which use artificial intelligence to respond to voice commands, are offering new choices to consumers who are looking for more convenient ways to order goods and services.

Voice shopping is expected to jump to $40 billion annually in 2022 in the US, from $2 billion today, according to a survey this year by OC&C Strategy Consultants.

“People are liking the convenience and natural interaction of using voice,” said Victoria Petrock of the research firm eMarketer.

“Computing in general is moving more toward voice interface because the technology is more affordable, and people are responding well because they don’t have to type.”

A recent eMarketer survey found 36 percent of US consumers liked the idea of using a home-based assistant such as Amazon Echo for making a purchase.

Amazon’s devices, which hit the market in 2015, were designed in large part to help boost sales, and Google Home was launched a year later.

“This is growing exponentially,” said Mark Taylor, an executive vice president at consultancy Capgemini and co-author of a study on conversational commerce.

“We’re getting very used to asking Alexa or Google to do something on our behalf, which makes it simple to switch and say, ‘Hey Alexa, buy me dog food.’”

Capgemini research shows many consumers are satisfied with voice interactions and that this is growing for search and information as well as for purchases and that this is likely to become a “dominant” mode of consumer action within a few years.

“It’s becoming part of the fabric of our lives,” Taylor said.

The most commonly shopped categories through voice are groceries, entertainment, electronics and clothing, according to OC&C.

For now, Taylor said, most voice-based purchases have been “low consideration goods” such as items consumers have purchased before.

But as people grow comfortable with voice assistants, Taylor sees a potential for growth in “higher consideration” items including insurance or financial services.

An important element will be the tonality and personality established by intelligent assistants that will help companies establish an image or brand.

“People like to talk to human beings because humans give insight and guidance, and AI can do the same thing,” he said.

The “conversational interface” is a tremendous advantage in some situations, said Manlio Carrelli, executive vice president at Live Person, which provides technology for firms in online platforms.

“This is like ‘Star Trek,’” Carrelli told AFP. “I can just say what I want and get it. Consumers don’t care what’s on the back end, they just want to be able to get what they want.”

Carrelli said these systems are important not only for sales, but for customer service — reducing the need for dreaded call centers and saving millions for businesses.

“We’re now entering the mainstream for this market,” Carrelli said. “I don’t think you’ll find a single major brand that isn’t looking at this.”

Walmart last month launched a text-based concierge shopping service called Jetblack, which uses both artificial intelligence and professional assistants offering buying suggestions as part of its effort to compete with Amazon.

But Walmart is one of dozens of retailers offering voice-based shopping through Google Express as well, along with sellers of flowers, hardware, groceries and other goods.

Domino’s Pizza has embraced this technology, allowing orders through Amazon Alexa, Google Home, Facebook Messenger and other platforms.

In France, Google Home devices can be used to shop at the giant retailing group Carrefour. And retailers in China have been partnering tech firms for similar services.

According to OC&C, Amazon Echo speakers are used in around 10 percent of US homes, with 4 percent for Google Home.

According to the report, Apple is lagging behind in this sector as its Siri assistant lacks the AI capabilities of Google, and the new HomePod has only just hit the market.

Apple just this year rolled out “business chat,” enabling consumers to ask questions and place orders through iPhone text or voice commands, and see images of products on the iMessage service. Retailers Lowe’s and Home Depot are among the partners.

Some analysts, however, expect more players to enter the market, with speculation rampant about a speaker from Facebook, which now is allowing business and consumers to connect through Messenger chatbots.

“Voice commerce represents the next major disruption in the retail industry, and just as e-commerce and mobile commerce changed the retail landscape, shopping through smart speaker promises to do the same,” said John Franklin of OC&C.