Oil drops as Wall Street slumps, North Sea pipeline ramps up

An oil pump jack at sunset near Strasbourg, France. US futures fell through $60 a barrel for the first time since December. (Reuters)
Updated 09 February 2018
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Oil drops as Wall Street slumps, North Sea pipeline ramps up

NEW YORK: Oil prices slid more than 3 percent on Friday, following beleaguered equity markets lower, as US futures fell through $60 a barrel for the first time since December on renewed concerns about rising crude supplies.
Futures were on track for a sixth straight day of losses, wiping away the year’s gains in a string of high-volume trading sessions, pressured by stronger-than-expected supply figures and a surprising ramp-up of the North Sea Forties Pipeline, which shut earlier in the week.
Oil services company Baker Hughes said total US onshore rigs rose by 26 to 791, highest since January 2017. Drillers have added rigs as oil prices rallied through mid-January to levels not seen in three years.
US West Texas Intermediate (WTI) crude was down $2.28, or 3.7 percent, at $58.89 as of 1:23 p.m. EST (1823 GMT), lowest since Dec. 26.
Brent futures fell $2.28 a barrel, or 3.5 percent to $62.53 a barrel, its lowest since Dec. 14.
“Oil futures really came under pressure especially when they crossed $60; it really seemed like traders started to liquidate,” said Philip Streible, futures broker at RJO Futures in Chicago.
The market has been increasingly pressured by the weak stock market. Also, oil is inversely correlated with the dollar, which has strengthened as equity markets slid. The S&P 500 stock index fell to its lowest level since Oct. 5.
US and Brent crude futures have slid more than 11 percent from this year’s peak in late January. Brent was heading for a weekly loss of nearly 9 percent; US crude was on track for a 10 percent weekly drop. Both would be the biggest weekly declines since January 2016.
Crude volumes in the North Sea Forties pipeline continued to ramp up faster than expected following a restart, a trade source told Reuters.
The news that the line will reach full rates over the weekend intensified oversupply worries, said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut.
“The idea that it is back up and running normally, combined with the data that show US production is rising, contributes to the overall idea that US production could offset cuts by OPEC,” said McGillian.
Investors were already worried that rising US production will overwhelm efforts by OPEC and other producing nations to cut supply. US output rose to 10.25 million bpd in the most recent weekly figures, which if confirmed would represent a record. The Baker Hughes figures should mean still more supply in coming months.
On Thursday, OPEC member Iran announced plans to boost production within the next four years by at least 700,000 barrels a day.
“We think that surging supply and slowing demand growth will tip the market back into a surplus this year,” analysts at Capital Economics said in a note.


CrowdStrike said to hire Goldman Sachs to lead IPO

Updated 20 October 2018
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CrowdStrike said to hire Goldman Sachs to lead IPO

  • IPO could come in first half of next year
  • CrowdStrike raised $200 million in June

NEW YORK: Cybersecurity software maker CrowdStrike Inc. has hired investment bank Goldman Sachs Group to prepare for an initial public offering that could come in the first half of next year, people familiar with the matter said on Friday.
CrowdStrike is aiming to be valued more than the $3 billion funding round assigned to it earlier this year, the sources added.
CrowdStrike’s IPO plans could still change, the sources cautioned, asking not to be identified because the matter is confidential.
CrowdStrike and Goldman Sachs declined to comment.
Sunnyvale, California-based CrowdStrike raised $200 million in June led by investors General Atlantic, Accel and IVP. Other major backers include CapitalG, an investment arm of Google’s parent company Alphabet Inc. and Warburg Pincus.
CrowdStrike uses artificial intelligence for its Falcon platform to prevent attacks on computers on or off the network.
CrowdStrike is trying to stand out from the hundreds of security startups that have sprouted in recent years, promising next-generation technologies to fight cyber criminals, government spies and hacker activists, who have plagued some of the world’s biggest corporations.
The recent crop of publicly listed cybersecurity companies have had a mixed stock performance. Zscaler Inc. went public in the spring and is trading 125 percent above its IPO price. Tenable Holdings Inc. is worth about 25 percent more than its IPO price. Carbon Black shares have been trading below their IPO price.
CrowdStrike was founded in 2012 by two executives who left security software maker McAfee, including George Kurtz, the startup’s chief executive.