Oil stable on threats of rebel attacks in Nigeria, tighter US crude inventories

Traders say oil prices are unlikely to fall far due to risks to supply disruptions. (Reuters)
Updated 18 January 2018
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Oil stable on threats of rebel attacks in Nigeria, tighter US crude inventories

SINGAPORE: Oil prices were stable on Thursday, supported by tighter inventories of crude as well as rebel threats of an attack on Nigeria’s petroleum industry, but the market was weighed down by a reported rise in US fuel stocks.
Brent crude futures were at $69.34 at 0753 GMT, down 4 cents from their last close. On Monday, they hit their highest since December 2014 at $70.37 a barrel.
US West Texas Intermediate (WTI) crude futures were at $64.03 a barrel, up 6 cents from their last settlement. WTI marked it highest since December 2014 at $64.89 on Tuesday.
Traders said that oil markets were generally well supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, who started to withhold production in January last year and are expected to continue their restraint through 2018.
Despite this, analysts said the recent oil price rally, which has lifted crude by around 14 percent since early December, may be about to run out of steam.
Data from the American Petroleum Institute (API) on Wednesday showed a well-supplied fuel product market, which could mean lower crude demand going forward.
US refinery crude runs fell by 420,000 barrels per day (bpd) and refined product stocks rose, implying a well-supplied market.
Gasoline stocks rose by 1.8 million barrels while distillate fuels stockpiles, which include diesel and heating oil, climbed by 609,000 barrels, the API data showed.
Refined product supplies in Asia are also healthy, largely thanks to a sharp rise in exports from China.
“The upside is now limited for oil prices ... US oil producers will ramp up production in the coming months ... US shale oil output will increase by a good 111,000 barrels per day (bpd) next month to 10 million bpd, and ... will rise to about 11 million bpd by the end of next year. This would put the US on par with Saudi Arabia and Russia’s output,” said Fawad Razaqzada, market analyst at futures brokerage Forex.com.
Coface, a French trade credit insurance company, said it “forecasts oil prices will consolidate some gains to average $65 (per barrel) in 2018.”
The firm said the reasons for this expected slowdown were an expected rise in US oil output as well as a slowdown in demand growth.
Despite this, traders said prices were unlikely to fall far due to risks to supply disruptions.
In Nigeria, the militant group Niger Delta Avengers threatened to launch attacks on the country’s oil sector in the next few days.
Markets were also supported by a drop in available crude inventories.
US crude inventories fell by 5.1 million barrels in the week ended Jan. 12 to 411.5 million, according to the API.
Official US oil inventory and production data is due on Thursday from the Energy Information Administration.


SoftBank mobile unit to go for $21bn IPO

Updated 13 November 2018
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SoftBank mobile unit to go for $21bn IPO

  • The IPO will be one of the biggest ever worldwide, and will provide the group with funds to pay down debt and continue placing big bets on innovations
  • SoftBank’s bets so far have been as varied as small gaming startups, ride-hailing firms such as Uber Technologies, and e-commerce behemoth Alibaba Group Holding

TOKYO: SoftBank Group Corp. has won approval to conduct a 2.4 trillion yen ($21.04 billion) initial public offering (IPO) of its domestic telecoms business, in a deal that will seal the group’s transformation into a top global technology investor.
The IPO will be one of the biggest ever worldwide, and will provide the group with funds to pay down debt and continue placing big bets on innovations that CEO Masayoshi Son predicts will drive future tech trends.
SoftBank’s bets so far have been as varied as small gaming startups, ride-hailing firms such as Uber Technologies, and e-commerce behemoth Alibaba Group Holding.
SoftBank Group aims to raise 2.4 trillion yen through the sale of 1.6 billion SoftBank Corp. shares at an tentative price of 1,500 yen each, a filing with the Ministry of Finance showed on Monday.

 

 The amount could rise by 240.6 billion yen if demand triggers an overallotment, taking the total closer to the $25 billion that Alibaba raised in 2014 in the biggest-ever IPO.
The final IPO price will be determined on Dec. 10, and SoftBank Corp. will list on the Tokyo Stock Exchange on Dec. 19 with an initial market value of 7.18 trillion yen — about 1 trillion yen above that of rival KDDI Corp, which has about 10 million more subscribers.
The parent will retain a stake of around two-thirds, depending on the overallotment.
The mammoth offering comes at a time when investors have begun questioning the outlook for Japan’s telecoms companies.
The IPO was initially expected to appeal to investors seeking stability, but the government has recently called on carriers to lower fees while backing more wireless competition, sending shockwaves through the industry.
Yet SoftBank’s brand is still likely to draw retail investors long accustomed to using SoftBank’s phone and Internet services. Many still see CEO Son as a tech visionary who brought Apple’s iPhone to Japan.
Japanese households are commonly seen as an attractive target in IPOs with their 1,829 trillion yen in financial assets, even if they are traditionally risk-averse with over 50 percent of assets in cash and deposits. More than 80 percent of the shares will be offered to domestic retail investors, a person with knowledge of the matter told Reuters.
“I think a reasonable amount of money will be attracted to this one,” said Tetsutaro Abe, an equity research analyst at Aizawa Securities. “It’s a mobile company, so the cash flow is steady.”

FACTOID

SoftBank to sell 1.6 billion shares at a tentative price of 1,500 yen ($13) each.