Ukraine crisis casts shadow over Geneva

Updated 09 March 2014
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Ukraine crisis casts shadow over Geneva

The developing crisis in the Crimea between Russia and Ukraine is casting a shadow over Geneva Motor Show this year as major manufacturers monitor the situation and hope it does not spill over to trade sanctions.
Russia is important for carmakers, with 2.78 million vehicles sold in the country last year.
By comparison, in 2013 consumers bought 2.95 million cars in Germany, Europe's largest market, and 2.26 million autos in the UK.
Automakers have spent billions of rubles to add factories in Russia in recent years after the government offered tax incentives in 2011 to set up local production.
Under rules set up at the time, carmakers are allowed to import components with no or very low duties in return for building at least 300,000 cars annually in the country.
General Motors operates a factory in St. Petersburg to serve the market, and the automaker is boosting capacity to build about 350,000 vehicles in Russia.
Daimler CEO Dieter Zetsche said: “The situation is changing by the minute, we are watching it closely."
This view was also echoed by many car executives at Geneva this week.


Oil prices fall on expected output rise after OPEC deal

Updated 8 min 37 sec ago
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Oil prices fall on expected output rise after OPEC deal

SINGAPORE: Brent crude oil prices fell over 1.5 percent on Monday as traders factored in an expected output increase that was agreed at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday.
Brent crude futures, the international benchmark for oil prices, were at $74.21 per barrel at 0343 GMT, down 1.8 percent from their last close.
US West Texas Intermediate (WTI) crude futures were at $68.40 a barrel, down 0.3 percent, supported more than Brent by a slight drop in US drilling activity.
Prices initially jumped after the deal was announced late last week as it was not seen boosting supply by as much as some had expected.
OPEC and non-OPEC partners including Russia have since 2017 cut output by 1.8 million barrels per day (bpd) to tighten the market and prop up prices.
Largely because of unplanned disruptions in places like Venezuela and Angola, the group’s output has been below the targeted cuts, which it now says will be reversed by supply rises especially from OPEC leader Saudi Arabia. Although analysts warn there is little space capacity for large-scale output increases.
“Several ministers suggested that (rises) would correspond to a 0.7 million bpd increase in production,” said US bank Goldman Sachs following the announcement of the agreement, although it added that were risks “that Iran production may be even lower than we assume” and that its output could fall further due to looming US sanctions.
Still, Britain’s Barclays bank said OPEC’s and Russia’s commitments would take “the market from a -0.2 million bpd deficit in H2 2018 to a 0.2 million bpd surplus.”
Energy consultancy Wood Mackenzie said the agreement “represents a compromise between responding to consumer pressure and the need for oil-producing countries to maintain oil prices and prevent harming their economies.”
In the United States, US energy companies last week cut one oil rig, the first reduction in 12 weeks, taking the total rig count to 862, Baker Hughes said on Friday.
That put the rig count on track for its smallest monthly gain since declining by two rigs in March with just three rigs added so far in June, although the overall level remains just one rig short of the March 2015 high from the previous week.