Oil falls on lower China refining activity, fresh US crude output record

OPEC, together with Russia, will officially meet in Vienna on June 22 to discuss production policy. (Reuters)
Updated 14 June 2018
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Oil falls on lower China refining activity, fresh US crude output record

SINGAPORE: Oil prices eased on Thursday, dragged down by rising output and a decline in China’s refining activity, although strong fuel consumption in the US and a drop in its crude inventories provided the market with some support.
Brent crude futures were at $76.55 per barrel at 0445 GMT, down 19 cents, or 0.25 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were at $66.62 a barrel, down 2 cents from their last settlement.
China on Thursday reported a drop in its refinery activity, from 12.06 million barrels per day (bpd) in April to 11.93 million bpd in May, although year-on-year runs were still up by 8.2 percent.
Also weighing on prices was another rise in US oil production, which hit a weekly record of 10.9 million bpd last week, according to the Energy Information Administration (EIA) on Wednesday.
US crude output has risen by almost 30 percent in the last two years, and it is now close to top global producer Russia, which produced 11.1 million bpd overall in the first two weeks of June.
But the rising output came amid strong demand, which traders said prevented crude prices from falling further.
US consumption of gasoline in the US rose to a historic high of 9.88 million bpd last week, according to the EIA.
US crude inventories fell by 4.1 million barrels in the week to June 8, to 432.4 million barrels.
Still, US output is now above that of top exporter Saudi Arabia, which currently churns out slightly above 10 million bpd.
The surge in American output puts pressure on other producers, who are losing market share.
Russian and Saudi production has been held back voluntarily since 2017, when the Organization of the Petroleum Exporting Countries (OPEC), together with some non-OPEC producers including Russia, started supply cuts aimed at propping up prices.
With Brent prices up by around 180 percent from their 2016 lows and demand strong, OPEC and Russia may soon end their voluntary supply cuts.
OPEC, together with Russia, will officially meet in Vienna on June 22 to discuss its production policy.
US bank Morgan Stanley said OPEC and its partners had “largely achieved their stated objective of rebalancing the oil market.”
With demand for oil strong, Morgan Stanley said the group’s “production is likely to creep higher.”
OPEC’s de-facto leader Saudi Arabia and Russia will also have the chance to talk before the Vienna meeting.
Russia and Saudi Arabia are set to open the football world cup, which kicks off in Russia on Thursday.
“The two producers’ ministers plan to discuss the issue during tomorrow’s World Cup game between the two countries,” ANZ bank said.


Meet the Dubai ad men who pay you to sit in traffic

Updated 20 August 2018
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Meet the Dubai ad men who pay you to sit in traffic

  • Blockchain technology challenges traditional outdoor media
  • Adverts connect to driver mobile phone

LONDON: A new startup founded by UAE-based entrepreneurs is in the process of test-running a blockchain-based technology that could help people turn their cars into mobile advertising vehicles.
It could challenge the use of traditional advertising methods such as outdoor billboards, the founders of The Elo Network claim.
The platform — which has been set up by Mohammed Khammas and Mohammed Bafaqih and incorporated in the Cayman Islands — will enable people to be paid for displaying adverts on the side or back of their vehicles while they go about their daily routines of driving to work, the mall or doing the school run.
The adverts will feature low-frequency bluetooth ‘beacons’ that connect to the drivers' mobile phone which will be able to monitor when the driver is in the car and where the car is being driven.
There is a minimum threshold for the number of miles being driven a day, but the main prerequisite is that the driver is in the car. Drivers will still be paid even if stuck in a traffic jam.
Advertising clients will be able to put out requests that drivers head to a particular area — for instance to be close to a new brand launch — with drivers being paid up to 4 or 5 times more than their standard rate if they accept.
While the concept of paying people to use their cars for advertising is not new, it is the use of blockchain technology that will make The Elo Network particularly grounding-breaking in the advertising world, its founders said.
“Billboards are very expensive and static and don’t give you the KPIs and insightful information that brands want these days. You solve that by getting them that data,” Bafaqih said.
The Elo Network collates detailed data by tracking the movements of the drivers and their day-to-day activities. Data points such as a particular area’s population density can been collected.
The information will be encrypted ensuring that the brand will never know the identity of the driver, said Bafaqih.
“It creates data sets that didn’t exist before. You don’t have to worry about privacy but at the same time the brand can know about your patterns. They can know where you go in mornings, where you drive, what normal patterns are created in certain areas and countries,” he said.
This level of detail is increasingly important for brands looking to run targeted campaigns, and it is something that traditional billboards are unable to offer.
The technology will also be used to overcome the payment problems that other similar car advertising schemes have faced.
“Historically what happens, where there is a authority that is issuing payments, it causes a lot of problems. There can be disputes on how much they (the drivers) are owed or how many miles were driven or what campaign someone has done,” he said.
Under the Elo Network program, the blockchain technology allows you to create so-called “Smart Contracts” — which is a software protocol that enforces and verifies the performance of a contract.
“It says driver A is going to be paid — for example — a dollar per mile — so as the person drives he starts receives ‘IOUs’. Those IOUs are convertible at any time,” he said.
With no ‘middle man’ involved, the driver is able to redeem their IOUs and get paid as and when they want.
The network is currently at ‘proof of concept’ stage and is test-running the platform with a number of brands. It is anticipated that the network will be rolled out to the public toward the end of this year and early 2019.