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.


Full-blown US, China trade war to cost jobs, growth and stability — WTO’s Azevedo

Updated 25 September 2018
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Full-blown US, China trade war to cost jobs, growth and stability — WTO’s Azevedo

  • ‘A continued escalation of tensions would pose an increased threat to stability, to jobs and to the kind of growth that we are seeing today’
  • ‘There would be no winners from such a scenario and every region would be affected’

BERLIN: A full-blown trade war would have serious effects on global economic growth and there would be no winners of such a scenario, the director-general of the World Trade Organization (WTO), Roberto Azevedo, said on Tuesday.
Speaking at a Berlin industry event against the backdrop of growing trade tensions between China and the US, Azevedo said: “The warning lights are flashing. A continued escalation of tensions would pose an increased threat to stability, to jobs and to the kind of growth that we are seeing today.”
A full-blown global trade war with a breakdown in international trade cooperation would reduce global trade growth by around 70 percent and GDP growth by 1.9 percent, Azevedo said.
“There would be no winners from such a scenario and every region would be affected,” Azevedo said. The European Union itself would have about 1.7 percent taken off its GDP growth, he said, adding: “Clearly, we cannot let this happen.”
Azevedo pointed to several reform proposals that addressed trade-distorting practices and the WTO’s existing mechanisms to resolve trade disputes, adding that members had to agree on which reforms they wanted to focus on.
“Clearly, this informed debate is gaining significant momentum and that is positive,” Azevedo said, adding the G20 summit in Buenos Aires in November would be crucial to agree on the next steps to safeguard the rules-based free trade order.
“Of course, the system can be better, in fact it must be better. But it’s nonetheless vital. So while we work to improve it and ensure that it’s more responsible to evolving economic needs, we must also preserve what we have — and I count on your support to that end,” he said.