Bitcoin at all-time high near $8,000

Updated 17 November 2017
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Bitcoin at all-time high near $8,000

LONDON: Bitcoin hit an all-time high just below $8,000 on Friday, on talk that a software upgrade whose suspension sent the cryptocurrency into a tailspin at the end of last week was, after all, going ahead within hours.
Talk that the upgrade — which could split or “fork” bitcoin into two versions — would go ahead was
driven by a statement on the web-site of Coinbase, the world’s largest bitcoin company with operations in 32 countries.
“The Bitcoin Segwit2x fork is expected to occur in the next six hours,” it said in a statement published at 10:04 a.m. GMT.
If a bitcoin clone were created, any holders would also in theory instantly become owners of the new spin-off.
Bitcoin, generally highly volatile, has been on a particularly wild ride, sliding at the end of last week to as low as $5,555 after plans for Segwit2x were suspended, before bouncing more than 40 percent since Sunday.
It reached as high as $7,997 in early Asian trading on the Luxembourg-based Bitstamp exchange, before easing back a touch to trade broadly flat by 11:15 a.m. GMT at $7,863.
Market-watchers said speculation about the fork was driving bitcoin higher. If it went ahead as expected, holders of the cryptocurrency would be able to sell the spin-off at a profit if the market were to assign it any value.
But in a post on the Medium blogging platform, the company’s communications director David Farmer said Coinbase did not expect the fork to successfully split bitcoin in two, as it lacked the necessary support from the network to do so.
“Whenever people hear ‘fork’ nowadays the price jumps, as people hope to get the free dividend,” said Charles Hayter, founder of cryptocurrency data analysis site Cryptocompare.
“There is also a resulting spike in demand for people entering bitcoin” from other cryptocurrencies.
Farmer said the company was actively monitoring the situation and that all funds stored in Coinbase wallets remained safe. All bitcoin buying and selling would be suspended on Coinbase in the hour prior to the fork, which is expected between 2:00 p.m. and 4:00 p.m. GMT.
Bitcoin is on track for its best week since July. For the year, it is up more than 700 percent.
— REUTERS


Gulf exporters to reap oil dividend as battle for Asia market share heats up

Updated 23 min 57 sec ago
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Gulf exporters to reap oil dividend as battle for Asia market share heats up

  • Chinese exports to US fall
  • IEA ups demand forecast

LONDON: China is expected to buy more oil from Saudi Arabia and other Gulf producers as it seeks to replace US supply amid a worsening trade war with Washington.
Although China last week omitted US crude from a list of a retaliatory tariffs, analysts told Arab News that the Chinese were cutting forward orders for US oil in case the trade war escalates.
Richard Mallinson, co-founder of London consultancy Energy Aspects, said: “Chinese buyers, anticipating that crude and LNG could go on the list if tensions escalate further, are looking to alternative sources.”
Mallinson said that Chinese buyers wanted to avoid having significant amounts of US oil sitting on tankers in the middle of the ocean, which would be hit with tariffs when unloaded at Chinese ports.
“There is definitely an opportunity for Middle East producers here, and particularly the biggest, Saudi Arabia,” he said.
Andrew Critchlow, head of energy news (EMEA) at S&P Global Platts, told Arab News that there was every likelihood of more demand from China for non-US oil and “Saudi Arabia and other Gulf Cooperation Council countries were the place to get it.”
OPEC already provides 56 percent of China’s oil imports, according to the International Energy Agency (IEA). The US has also been exporting increasing levels to the Asia powerhouse.
A report by the Houston Chronicle on Aug. 13, said that US crude exports to China surged from about 22,000 barrels per day (bpd) in 2016 to almost 400,000 bpd last year and early in 2018, accounting for about 20 percent of all US crude shipments.
This summer, those volumes fell below 200,000 barrels daily, said the report.
Critchlow said that the Kingdom was currently producing about
10.5 million bpd with spare capacity of around 2 million bpd, although the closer you get to that number, the more difficult it was to extract and process, he said.
Russia could also ramp up production, but not as much as KSA, said Critchlow.
“We now have the IEA upping its demand forecast for 2019. They have increased their OPEC barrels estimate by a few hundred thousand barrels a day and by half a million a day by 2019 (for the OPEC 15),”
he said.
But the scope for increased global export potential from the Gulf was also being driven by anticipated tighter supply after the reimposition of US sanctions against Iran later this year.
Still, there was a danger of demand erosion the longer the trade wars continued, and especially if there was further escalation.
Shakil Begg, head of Thomson Reuters oil research in London, warned that by the second half of 2019, global GDP could be cut if world trade levels contracted.
That would lead to a sharp fall in the price of crude, and even herald a US recession that could spill into Europe, he told Arab News.
But Critchlow made the crucial point that the big competition in the oil market today “is to win a bigger share of the Chinese and Asian market, including India.”
He said: “That’s where the battle for market share will take place over the next decade. Also, as Iranian barrels are lost, customers in nations such as China, South Korea, India and Japan will look to the GCC and others to step in.”
US exporters will still be a big force to be reckoned with, he said. The IEA has predicted that the US will overtake KSA and Russia as the largest producer by as early as 2019.
Mallinson said: “At the end of this year and the beginning of next, the market is going to get extremely tight. And the Saudis will have to pump at much higher levels.
“When you’ve got buyers restricted from where they go, it does create alternatives to move upwards,” said Mallinson.
But he warned that if the trade war worsens, it could hobble economic growth.
“These are the two largest economies in the world and it is not good news for them getting into a conflict like this.
“But even with a severe economic slowdown, we still see a tight oil market next year. Iran and sanctions are the biggest driver.”
Mallinson said that there were two other constraints: Underinvestment in capital projects outside the US, and infrastructure bottlenecks
in America.
“Those factors are big enough on the supply side to outweigh the possibility of a sharp slowdown of growth on the demand side,” he said.