Oil stable amid cautious optimism over Trump, Kim summit in Singapore

US output has risen by almost a third in the last two years, to a record of 10.8 million barrels per day. (Reuters)
Updated 12 June 2018
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Oil stable amid cautious optimism over Trump, Kim summit in Singapore

SINGAPORE: Oil markets were stable on Tuesday amid cautious optimism over the outcome of a summit between US President Donald Trump and North Korean leader Kim Jong Un in Singapore.
Movements in crude markets were also limited ahead of a meeting between the Organization of the Petroleum Exporting Countries (OPEC) and some of its allies on June 22 that may determine the crude production policy of several major producers.
Brent crude futures were trading at $76.45 per barrel at 0355 GMT, little changed from their last close.
US West Texas Intermediate (WTI) crude futures were at $66.16 a barrel, up 6 cents from their last settlement.
Crude has been supported by healthy demand and voluntary production cuts led by OPEC, but analysts said oil markets were also currently heavily driven by public policy events and statements.
Trump and Kim on Tuesday met for a one-day summit in Singapore with the goal to narrow differences over how to end a nuclear standoff on the Korean peninsula, with Trump stating he had forged a “good relationship” with the North Korean leader.
“And today marks the potentially momentous meeting between Donald Trump and North Korean leader Kim Jong Un in Singapore,” said Shannon Rivkin, investment director at Australia’s Rivkin Securities.
Global markets edged up as the highly anticipated summit got underway amid expressions of goodwill.
“Any positive outcome could be good news for markets,” Rivkin added.
Oil market fundamentals, however, point to lower prices, with output from the three biggest producers, Russia, the United States and Saudi Arabia on the rise.
Russian production has reportedly climbed from below 11 million barrels per day (bpd) to 11.1 million bpd in early June.
In the United States, output has risen by almost a third in the last two years, to a record of 10.8 million bpd.
“The deluge of US crude production continues to hold the top-side in check,” said Stephen Innes, head of trading at futures brokerage OANDA.
Now, top exporter Saudi Arabia — which has so far led OPEC’s efforts to withhold supplies — is also showing signs of raising production.
Saudi Arabia has told OPEC that it increased oil output to a little more than 10 million bpd in May, up from 9.9 million bpd in April.
“This fits with the theory that the Saudis and Russians are subtly moving toward a change to the agreement at this month’s meeting,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
OPEC, together with some non-OPEC producers including Russia, started withholding output in 2017 to end a global supply overhang and prop up prices.
OPEC and its partners are due to meet at its headquarters in Vienna, Austria, to discuss policy.
“Expect more of the same whippy markets driven by rumors and innuendo ahead of the June 22 Vienna OPEC meeting,” Innes said.


SoftBank’s Son says Japan is ‘stupid’ to disallow ride-sharing

Updated 19 July 2018
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SoftBank’s Son says Japan is ‘stupid’ to disallow ride-sharing

  • ‘Ride-sharing is prohibited by law in Japan. I can’t believe there is still such a stupid country’
  • SoftBank and its nearly $100 billion Vision Fund have invested in ride-sharing firms Uber, Didi, Ola and Grab, as well as in other technology companies

TOKYO: SoftBank Group Corp. Chief Executive Masayoshi Son blasted Japan on Thursday for not allowing ride-sharing services, calling it “stupid” and saying the country was lagging overseas rivals in areas such as artificial intelligence (AI).
“Ride-sharing is prohibited by law in Japan. I can’t believe there is still such a stupid country,” Son said at an annual company event aimed at customers and suppliers.
The comments reflect Son’s frustration with Japan where he built SoftBank’s domestic telecoms business, the cash engine that has powered his investments. The group has, however, focused its growing range of technology investments overseas.
Son has also been highly critical of the government previously when SoftBank was still a fledgling telecoms service trying to break up a cozy duopoly in Japan.
“A country that gives up on the future has no future,” Son told attendees at the SoftBank World event, saying Japanese business is lagging behind countries such as the United States and China in employing AI.
Japan outlaws non-professional drivers from transporting paying customers on safety grounds and the country’s taxi industry lobby has vigorously opposed deregulation.
Its strict rules have confined ride-sharing firms to providing limited services, with SoftBank and China’s Didi Chuxing saying on Thursday they will trial a taxi-hailing service — matching users to pre-existing taxi operators — in Osaka beginning autumn of 2019. Uber is also piloting a taxi-hailing service.
When asked for a response to Son’s comments, a spokesman for the Ministry of Land, Infrastructure, and Transport said that an issue with ride-sharing services was that while the driver was in charge of transporting passengers, it was unclear who was in charge of maintenance and operation.
“The ministry believes that offering these services for a fee poses problems from the points of both safety and user protection, and careful consideration is necessary,” he said.
Ride-sharing is not the only service in Japan feeling the impact of government restrictions. Strict new rules on home-sharing came into force last month that have radically reduced the number of lettings on sites such as Airbnb Inc.
The curbs on Japan’s nascent sharing economy come despite a rapid rise in the number of inbound tourists likely to access such sharing services, and at a time when Japan is wanting to show its international face ahead of hosting the Rugby World Cup next year and the Summer Olympics in 2020.
While Son, an ethnic Korean born in Japan, has at times criticized the Japanese government, he can also be politically suave. He has praised US President Donald Trump with warm words and pledged to invest billions of dollars and create thousands of jobs in the United States.
SoftBank and its nearly $100 billion Vision Fund have invested in ride-sharing firms Uber Technologies Inc, Didi, India’s Ola and Southeast Asia’s Grab, as well as in other technology companies.
The event on Thursday saw presentations from executives at portfolio companies including Didi, General Motors’ autonomous vehicle unit Cruise and India digital payments firm Paytm E-Commerce Pvt Ltd.
Artificial intelligence is the common thread linking these companies, Son said, with that technology in the future able drive vehicles, diagnose diseases and power financial services.