Oil prices rise on worries over Venezuelan supply

The impact of output curbs led by the OPEC had created “ultra-tight” supply conditions, with any signs of supply disruption sending prices sharply higher, a market analyst said. (Reuters)
Updated 22 May 2018
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Oil prices rise on worries over Venezuelan supply

SINGAPORE: Oil prices rose on Tuesday amid worries that Venezuela’s crude output could drop further following a disputed presidential election in the country and with potential sanctions on the OPEC-member.
Brent crude futures were at $79.37 per barrel at 0110 GMT, up 15 cents, from their last close. Brent broke through $80 for the first time since November 2014 last week.
US West Texas Intermediate (WTI) crude futures were at $72.49 a barrel, up 25 cents from their previous settlement.
“The markets’ positive take on ‘no trade war’ and Venezuela’s political woes are driving oil prices higher,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
Venezuela’s socialist President Nicolas Maduro faced widespread international condemnation on Monday after his re-election in a weekend vote his critics denounced as a farce cementing autocracy in the crisis-stricken oil producer.
The United States is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades.
“Tightening the economic screws will severely cripple ... Venezuela’s ability to export while making it virtually impossible for the country to acquire dollars,” said Innes.
Meanwhile, Washington and Beijing both claimed victory on Monday as the world’s two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost US exports to China.
Elsewhere, concerns that looming US sanctions on Iran will curb that country’s crude exports have also been boosting oil prices in recent weeks.
OANDA’s Innes said that and the impact of output curbs led by the Organization of the Petroleum Exporting Countries had created “ultra-tight” supply conditions, with any signs of supply disruption sending prices sharply higher.
“Supply-side dynamics are apparently in the driver’s seat, suggesting prices should push higher near-term,” he said.


Saudi Arabia’s PIF could see big profit on Uber stake, Future Investment Initiative forum hears

Updated 15 sec ago
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Saudi Arabia’s PIF could see big profit on Uber stake, Future Investment Initiative forum hears

Frank Kane RIYADH: The Public Investment Fund (PIF), the Saudi Arabian sovereign wealth fund, is potentially looking at a windfall profit on its investment in Uber Technologies, the American ride-hailing company, it emerged at the Future Investment Initiative in Riyadh.
Lubna Olayan, head of the Olayan Group conglomerate, highlighted a potential doubling in the value of PIF’s stake in Uber if the San Francisco firm goes ahead with an initial public offering next year.
Speaking on a panel entitled “Can global investment inspire a collective vision of the future,” she remarked that PIF first invested $3.5 billion in Uber in 2016 when it was valued at approximately $60 billion.
“Now the forecast valuations for the IPO are around $120 billion. Congratulations,” she said to Yasir Al-Rumayyan, managing director of PIF.
Al-Rumayyan replied: “Uber is creating lots of jobs in Saudi Arabia and making life easier for drivers, customers and shareholders.”
PIF’s profit on any Uber IPO could be even bigger, because the Saudi organization is a major investor in the SoftBank Vision Fund, which is also holds a sizeable chunk of Uber shares from a later round of fundraising.
Al-Rumayyan told the forum that PIF’s holdings are on track to be valued at $400 billion by 2020, and $2 trillion by 2030. By then, he said, PIF’s portfolio would be split 50-50 between domestic and global investments. About 10 percent of PIF’s funds are currently invested outside Saudi Arabia.
Al-Rumayyan said it was not true that all of PIF’s investments went into high-tech assets, pointing to its 50 percent stake of a $40 billion infrastructure fund in partnership with US group Blackstone, and the hotel chain Accor.
In Saudi Arabia, PIF wants to broaden its investment in the economy, especially in the tourism and entertainment sectors. “We did not have these interests before and we want to enhance these sectors,” Al-Rumayyan said.