Libya force majeure pushes up oil, US crude hits highest since late 2014

Libya’s National Oil Corporation declared force majeure on loadings from Zueitina,above, and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted. (Reuters)
Updated 03 July 2018
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Libya force majeure pushes up oil, US crude hits highest since late 2014

SINGAPORE: Oil prices rose on Tuesday after Libya declared force majeure on some of its supplies, while an ongoing Canadian outage lifted US crude to levels not seen since late 2014.
US West Texas Intermediate (WTI) crude futures were at $74.73 at 0724 GMT, up 79 cents, or 1.1 percent, from their last settlement. They earlier marked their strongest since November 2014 at $74.84 a barrel.
Traders said this was largely due to an expected fall in North American fuel inventories following the 350,000-barrel-per-day (bpd) Syncrude outage in Canada.
Outside North America, Brent crude oil futures were at $77.77 per barrel, up 44 cents, or 0.6 percent.
“Oil bulls seem to have returned after Libya suspended oil exports from two key ports,” said Hussein Sayed, chief market strategist at futures brokerage FXTM.
“If Libya’s oil doesn’t return fast to the market it will be an important test to OPEC’s spare capacity, especially given that output from Venezuela and Iran is expected to fall significantly in the next couple of months,” he added.
The Organization of the Petroleum Exporting Countries (OPEC) saw June output at 32.32 million bpd, a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.
The UAE’s Abu Dhabi National Oil Co. (ADNOC), a major producer within OPEC, said on Tuesday it is able to increase production by several hundred thousand bpd if needed.
However, Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted.
Outside the supply-side, a slowdown in demand is emerging, potentially ending years of consecutive records.
“US petroleum demand growth slowed significantly to 385,000 bpd year-on-year in April, compared with a growth of more than 730,000 bpd year-on-year in Q1,” Barclays bank said, adding that this was mostly due to higher fuel prices.
In Asia, the world’s top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.
Chinese stocks went into a tail spin on Tuesday as turbulence gripped equity markets in Asia, which sank to nine-month lows as investors feared the Sino-US trade row could derail a rare period of synchronized global growth.
“There are ... signs that growth in China has slowed in recent months, particularly infrastructure spending by local governments. I would assume that infrastructure investment is quite energy intensive, so perhaps that had a knock-on effect to oil demand,” said Frederic Neumann, Co-Head of Asian Economic Research at HSBC in Hong Kong.
“At this stage, however, it appears more that growth in Asia is softening, rather than decelerating sharply,” he added.


Britain unveils “short and sharper” code for companies

Updated 5 min 41 sec ago
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Britain unveils “short and sharper” code for companies

  • The new code emphasises the need for boards to refresh themselves, become diverse and plan properly for replacing top jobs
  • Company remuneration committees should also take into account workforce pay when setting director pay

LONDON: Companies in Britain must strive to rein in excessive executive pay and make boards more diverse under a new “short and sharper” corporate code, published on Monday.
The Financial Reporting Council (FRC) has updated its code of corporate standards for publicly listed companies, which must comply with it or explain to shareholders if they do not.
The new code comes as the watchdog, which oversees company governance standards and accountants, faces a review to see if it can uphold high corporate standards to maintain Britain’s attractions as a place to invest after Brexit.
British lawmakers have called for tougher corporate govenance standards following a row between food retailer Tesco and its suppliers and the collapse of retailer BHS and outsourcer Carillion. And shareholders have become much more active in terms of rejecting some executive pay deals.
“To make sure the UK moves with the times, the new code considers economic and social issues and will help to guide the long-term success of UK businesses,” FRC Chairman Win Bischoff said.
“This new code, in its short and sharper form, and with its overarching theme of trust, is paramount in promoting transparency and integrity in business for society as a whole.”
There is a new provision for greater board engagement with the workforce to understand their views — aimed at reinforcing an existing provision in law since 2006 which has had a patchy impact.
This, along with a requiremnent to have “whistleblowing” mechanisms that allow directors and staff to raise concerns for effective investigation, mark the biggest broadening of corporate standards in many years, the FRC said.
“The new code is much stronger on abilities to raise concerns in confidence,” said David Styles, FRC director of corporate governance.
It also emphasises the need for boards to refresh themselves, become diverse and plan properly for replacing top jobs.
It introduces a requirement for companies to explain publicly if a board chair has remain unchanged for more than nine years.
Company remuneration committees should also take into account workforce pay when setting director pay.
“To address public concern over executive remuneration... formulaic calculations of performance-related pay should be rejected,” the watchdog said.