Russia keen on more OPEC cooperation on oil output cap

Russia’s energy minister however said that it was too early to discuss extending or altering the landmark 2016 deal, which expires on March 31. (AFP)
Updated 23 September 2017
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Russia keen on more OPEC cooperation on oil output cap

VIENNA: Russia’s energy minister said Friday that he was in favor of continuing cooperation with OPEC as their joint accord to cap output bears fruit in boosting the price of crude.
However Alexander Novak said that it was too early to discuss extending or altering the landmark 2016 deal by 24 countries — including Russia and members of OPEC — that expires on March 31.
“We should keep the pace and definitely moreover follow through on the concerted action,” Novak said at a meeting at OPEC headquarters in Vienna of a committee reviewing implementation of the agreement.
He added that while it oil producers should “elaborate a strategy” for April 2018 onwards and that prolonging it was “an option”, it was premature to make a decision now.
“I believe that January is the earliest date when we can actually credibly speak about that state of the market and about how the situation is developing,” Novak told a news conference after the meeting.
“I don’t think it’s right for people to expect us to make a decision seven months before the deal expires,” he said.
Before the pact was reached, a global oil glut saw crude prices plummet from over $100 a barrel in 2014 to a 13-year low of under $30 last year.
The price of oil has seesawed considerably in the last six months, but this week has traded around the $50-per-barrel level, suggesting that the agreement was finally bearing fruit.
Brent crude, the international benchmark, closed at $56.43 a barrel on Thursday, its highest since February and up 25 percent since June. It inched up further on Friday as did West Texas Intermediate.
“We have every reason to be pleased with the steady progress we have made in our collective efforts to overcome the challenges of the current oil market cycle, which is perhaps the worst of all the previous cycles that we have witnessed in recent times,” OPEC’s secretary general Mohammed Barkindo said at the talks.
Recent market data showing a reduction in stocks of oil around the world that has depressed oil prices “confirm beyond all reasonable doubt ... that the market rebalancing is on course,” the Nigerian said.
“OPEC members are trying to target a figure of close to $60 a barrel. We’re not too far away from that,” Emmanuel Ibe Kachikwu, Nigeria’s minister for petroleum resources, told Bloomberg.
“If we get to March (when the deal expires) and find that there’s a need to do more, I think we will.”
The danger, however, is that higher crude prices could entice shale oil producers in the US — outside the deal — to ramp up output and put the market back in surplus.


China files WTO challenge to US tariffs on solar panels

Updated 5 min 13 sec ago
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China files WTO challenge to US tariffs on solar panels

  • The 30 percent tariffs announced in January improperly help US producers in violation of WTO rules, China’s commerce ministry said
  • China has tried to portray itself as a defender of the WTO-based trading system
BEIJING: China says it is challenging a US tariff hike on solar panels before the World Trade Organization, adding to its sprawling conflicts with President Donald Trump over trade and technology.
The 30 percent tariffs announced in January improperly help US producers in violation of WTO rules, the Commerce Ministry said. It said a formal complaint was filed Tuesday with the WTO in Geneva.
The solar duties are separate from tariff hikes imposed by the Trump administration starting in July on Chinese imports in response to complaints Beijing steals or pressures companies to hand over technology.
The duties also apply to imports of solar cells and modules from Europe, Canada, Mexico and South Korea. That strained relations with US allies.
The Trump administration has defended the solar tariffs as necessary to protect American producers, saying import prices were unfairly low due to subsidies and other improper support.
Washington took action under a 1974 US law instead of through the WTO. That led to complaints it was undermining the global trade body. US officials say such action is necessary because the WTO lacks the ability to address Chinese trade tactics.
China has tried to portray itself as a defender of the WTO-based trading system. It has attempted to recruit European and other governments as allies against Washington, but they echo US complaints about Chinese market barriers and industrial policy.
The European Union filed its own WTO complaint in June against Chinese technology policies it said violate Beijing’s free-trade commitments.
The US solar action “seriously damaged China’s trade interests” and “also affects the seriousness and authority of WTO rules,” said a Commerce Ministry statement.
WTO complaints begin with negotiations between parties to the dispute. If those fail, the case moves to a panel of experts who can decide whether the trade controls are improper.
In their technology dispute, Washington imposed 25 percent duties on $34 billion of Chinese goods it said benefit from improper industrial policies. Beijing responded with similar penalties.
Another round of US tariff hikes on $16 billion of Chinese goods is due to take effect Aug. 23. Beijing says it will retaliate.
Earlier, Beijing filed a separate WTO challenge on July 16 to Trump’s proposal for yet another round of increases that would add 25 percent import duties on an additional $200 billion of Chinese goods.