Oil dips as US dollar firms, oil production is expected to rise

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Updated 21 February 2018
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Oil dips as US dollar firms, oil production is expected to rise

SINGAPORE: Oil prices fell on Wednesday, weighed down by the rebound of the US dollar further away from three-year lows hit last week.
An expected rise in US oil production also weighed on prices, traders said.
US West Texas Intermediate (WTI) crude futures were at $61.32 a barrel at 0307 GMT, down 47 cents, or 0.8 percent, from their last settlement.
Brent crude futures fell 39 cents, or 0.6 percent, from their last close to $64.86 per barrel.
Wang Tao, Reuters technical commodity analyst, said Brent could fall into a range of $63.92 to $64.41 per barrel, as suggested by its wave pattern and a projection analysis.
Traders said the declines were driven by a recovery in the dollar, which potentially hits fuel demand as it makes greenback-denominated oil imports more expensive for countries using other currencies.
The dollar index, which measures the greenback against a basket of six major currencies, rose for a second day on Wednesday, moving further away from the three-year lows reached last week as traders shaved off some bearish bets against the US currency.
“The US dollar continues to find firmer footing,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
Also pressuring prices is surging US production , now the world’s second-largest oil stream at more than 10 million barrels per day, only slightly behind Russia and ahead of top exporter Saudi Arabia.
“Bulging US production will weigh on prices,” said Singapore-based Phillip Futures in a note on Wednesday.
The next set of weekly US oil production data is due to be published by the Energy Information Administration (EIA) on Thursday after a one-day delay because of the President’s Day holiday on Monday.
That data will also include US inventory figures that are expected to show crude oil stockpiles rose 1.3 million barrels in the week to Feb. 16, according to a Reuters poll. Oil product stockpiles, including gasoline and distillate fuels, are all expected to decline.
Despite the rising US output, overall oil markets remain well supported due to healthy demand growth and supply restraint by the Organization of the Petroleum Exporting Countries (OPEC) that started last year to draw down excess global inventories.


Abu Dhabi aims to lure start-ups with investment in new technology hub

Updated 24 March 2019
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Abu Dhabi aims to lure start-ups with investment in new technology hub

  • The initiative will help Abu Dhabi reduce reliance on oil
  • Mubadala hopes to attract Chinese and Indian companies

ABU DHABI: Abu Dhabi will commit up to $272 million to support technology start-ups, it said on Sunday, in a dedicated hub as part of efforts to diversify its economy.

US tech giant Microsoft will be a strategic partner, providing technology and cloud services to the businesses that join the hub as the capital of the United Arab Emirates continues its push to reduce reliance on oil revenue.
Abu Dhabi derives about 50 percent of its real gross domestic product and about 90 percent of central government revenue from the hydrocarbon sector, according to ratings agency S&P.
The emirate launched a $13.6 billion stimulus fund, Ghadan 21, in September last year to accelerate economic growth. Ghadan means tomorrow in Arabic. The new initiative, named Hub 71, is linked to Ghadan will also involve the launch of a $136 million fund to invest in start-ups, said Ibrahim Ajami, head of Mubadala Ventures, the technology arm of Mubadala Investment Co.
The goal is to have 100 companies over the next three to five years, Ajami said. “The market opportunities in this region are immense,” he added.
Mubadala, with assets of $225 billion and a big investor in tech companies, will act as the driver of the hub, located in the emirate’s financial district.
Softbank will be active in the hub and support the expansion of companies in which it has invested, Ajami said, adding that Mubadala is also aiming to attract Chinese and Indian companies, among others.
Mubadala which has committed $15 billion to the Softbank Vision Fund, plans to launch a $400 million fund to invest in leading European technology companies.
Incentives mapped out by the government include housing, office space and health insurance as part of the $272 million commitment, Ajami said.
Abu Dhabi will also announce a new research and development initiative on Monday linked to the Ghadan 21 plan, according to an invitation sent to journalists.