US oil price hits 6-1/2-year low

Updated 14 August 2015
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US oil price hits 6-1/2-year low

LONDON: US crude oil steadied on Friday after falling to its lowest in almost 6-1/2 years as huge stockpiles and refinery shutdowns heightened concerns about global oversupply.

Oil had already tumbled more than 3 percent on Thursday, driven by a report that stocks at Cushing, Oklahoma, the delivery point for US crude futures, rose more than 1.3 million barrels in the week to Aug. 11.
US crude hit an intraday low of $41.35 a barrel, its lowest since March 4, 2009, before recovering to $42.28 by 1220 GMT, up 5 cents on the day.
Brent crude traded at $49.25, up 3 cents from its previous settlement and some way off its 2015 low of $45.19 reached in January. The front-month September Brent contract expires on Friday.
US crude is much weaker than the North Sea benchmark, partly due to refinery outages sapping US demand. The largest of those refineries — BP's 413,500-barrels-per-day (bpd) facility in Whiting, Indiana, shut two-thirds of its capacity for repairs that could last a month or more.
Robin Bieber, director and technical analyst at London brokerage PVM Oil Associates, said the US crude oil contract, also known as West Texas Intermediate or WTI, had become somewhat dislocated from Brent.
"The contracts are not all on the same technical page and this causes a lack of clarity," Bieber said. "WTI could plunge but the rest hold steady."
Commerzbank analyst Carsten Fritsch said he didn't expect an accelerated drop in prices, but rather "a slow grind lower" as long as the Whiting refinery was out of service.
Petromatrix oil analyst Olivier Jakob said WTI could fall further, but Brent was in a consolidation phase: "WTI is still facing some local issues and it could weaken more. Otherwise Brent will start to stabilize."
Goldman Sachs said a weaker Chinese yuan was putting downward pressure on all commodity markets, signalling a change in global macroeconomic conditions.
"We believe the net commodity market effects are bearish," it said in a note to clients.
Analysts said prices could drop further still unless oil production started to fall, particularly in North America.
"The lowest crude prices in six years might not be enough to put the brakes on the US supply growth. US shale players are actively cutting costs and some players are profitable at less than $30 per barrel," ANZ Bank said.


Careem looks to raise up to $200 million in China

Updated 1 min 52 sec ago
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Careem looks to raise up to $200 million in China

HONG KONG: Careem, Uber’s main Middle East rival, is looking at raising between $100 million and $200 million from Chinese investors, a source with direct knowledge of the matter told Reuters.
Investment bank China International Capital Corporation (CICC) is advising Dubai-based Careem, but it was not immediately clear when or if a deal would be finalized, the source said, adding there was a lack of familiarity and interest among Chinese investors in Middle Eastern start-ups.
Beijing-based CICC and Careem both declined to comment.
Reuters reported on Monday that CICC and New York-based investment bank Jefferies were both advising Careem on potential investment options and capital raising, including a possible Middle East M&A deal with Uber.
Careem, which counts German car maker Daimler and China’s largest ride-hailing company DiDi Chuxing among its other backers, competes head-to-head with Uber in most of the major cities in the Middle East.
Careem said in October it had secured $200 million in a new funding round from existing investors, and that it expected to raise more to finance expansion plans.
That investment, combined with previous fund raising and company growth into new markets and segments, gave Careem an estimated valuation of more than $2 billion.
Reuters reported in March that Careem was in early talks to raise as much as $500 million.