Oil rises after Korea talks feed risk appetite

The OPEC crude output cuts helped push oil back above $65 a barrel this week. (AP Photo)
Updated 07 March 2018
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Oil rises after Korea talks feed risk appetite

LONDON: Oil rose on Tuesday, paring earlier losses after South Korea said it would hold a summit with North Korea for the first time in more than a decade. Investors took this as a cue to sell the US dollar and buy risk-sensitive assets such as commodities.
The prospect of OPEC and other producers, including Russia, maintaining crude output cuts in the face of a boom in US shale production has helped to push oil back above $65 a barrel this week.
Brent crude futures were up 12 cents on the day at $65.66 a barrel by 3:04 p.m. GMT, having risen from a session low of $65.30, while US West Texas Intermediate futures were up 3 cents at $62.60, off an earlier high of $63.28 a barrel.
The dollar fell to its lowest in more than a week against a basket of currencies after a senior delegation from South Korea returned from a visit to the north, which said there was no need to keep its nuclear program as long as there was no military threat against it and the safety of its regime was secured.
“The comments on North Korea denuclearization have caught the market a bit off-guard and so the dollar has weakened and commodities have received a boost,” said Saxo Bank senior manager Ole Hansen.
“Oil seems to be more driven by outside macro forces than what is happening within the sector.”
The price had eased closer to $65 in earlier trading, pressured by the International Energy Agency’s (IEA) warning on Monday that US oil output is set to surge over the coming five years.
US crude production has risen to more than 10 million barrels per day (bpd), overtaking top exporter Saudi Arabia. Output hit a record 10.057 million bpd in November, according to the US Department of Energy.
“If the production growth in Brazil, Canada and Norway is factored into the equation, these four countries will even exceed demand growth,” Commerzbank analysts said in a note.
“According to the IEA, the call on OPEC is therefore set to decline to 31.8 million bpd in 2019, thereby falling below OPEC’s current production level. It is thus an illusion for OPEC to think about abandoning the agreement to cut production.”
Weekly US crude inventory data is expected to show a second consecutive weekly rise in the week to March 2, according to a Reuters poll.


EU fines Nike $14 million for blocking cross-border sales of football merchandise

Updated 25 March 2019
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EU fines Nike $14 million for blocking cross-border sales of football merchandise

  • The European Commission said Nike’s illegal practices occurred between 2004 to 2017
  • Sales restrictions relate to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation

BRUSSELS: US sportswear maker Nike was hit with a $14.14 million (€12.5 million) fine on Monday for blocking cross-border sales of football merchandise of some of Europe’s best-known clubs, the latest EU sanction against such restrictions.
The European Commission said Nike’s illegal practices occurred between 2004 to 2017 and related to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation.
The European Union case focused on Nike’s role as a licensor for making and distributing licensed merchandise featuring a football club’s brands and not its own trademarks.
The sanction came after a two-year investigation triggered by a sector inquiry into e-commerce in the 28-country bloc. The EU wants to boost online trade and economic growth.
European Competition Commissioner Margrethe Vestager said Nike’s actions deprived football fans in other countries of the opportunity to buy their clubs’ merchandise such as mugs, bags, bed sheets, stationery and toys.
“Nike prevented many of its licensees from selling these branded products in a different country leading to less choice and higher prices for consumers,” she said in a statement.
Nike’s practices included clauses in contracts prohibiting out-of-territory sales by licensees and threats to end agreements if licensees ignored the clauses. Its fine was cut by 40 percent after it cooperated with the EU enforcer.