Oil falls after Trump threatens to escalate trade war with new tariffs

US crude inventories fell last week by 6.8 million barrels, according to data from industry group, the American Petroleum Institute. Above, an oil well near Tioga in North Dakota. (AFP)
Updated 11 July 2018
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Oil falls after Trump threatens to escalate trade war with new tariffs

TOKYO: Oil prices fell on Wednesday, with Brent dropping by more than $1 at one point, after US President Donald Trump threatened to levy new trade tariffs on China.
The specter of tariffs on a further $200 billion worth of Chinese goods sent commodities lower along with stock markets, with trade tensions between the world’s two biggest economies intensifying.
Brent crude futures were down 75 cents, or 1 percent, at $78.11 a barrel by 0308 GMT, having fallen as low as $77.60. US crude was down 55 cents, or 0.7 percent, at $73.56.
“The trade concerns have bitten today and the reason is that this is above and beyond what the market was expecting,” said Michael McCarthy, chief markets strategist at CMC Markets in Sydney.
The bearish mood was also fueled by news the United States would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports.
Washington will consider requests from some countries to be exempted from sanctions it will put into effect in November to prevent Iran from exporting oil, US Secretary of State Mike Pompeo said on Tuesday.
Washington had earlier told countries they must halt all imports of Iranian oil from Nov. 4 or face US financial measures, with no exemptions.
The US pulled out of a multinational deal in May to lift sanctions against Iran in return for curbs to its nuclear program.
US crude inventories fell last week by 6.8 million barrels, according to data from industry group, the American Petroleum Institute.
Analysts polled by Reuters forecast that crude stocks fell on average by 4.5 million barrels, ahead of government data at 10:30am on Wednesday.


Saudi Aramco aims to buy controlling stake in SABIC: Sources

Updated 23 July 2018
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Saudi Aramco aims to buy controlling stake in SABIC: Sources

  • Riyadh-listed SABIC, the world’s fourth-biggest petrochemicals firm, has a market capitalization of 385.2 billion Saudi riyals
  • The potential acquisition would affect the time frame of Aramco’s planned initial public offering set for later this year

DUBAI: Saudi Aramco aims to buy a controlling stake in petrochemical maker SABIC, possibly taking the entire 70 percent stake owned by Saudi Arabia’s sovereign wealth fund, two sources familiar with the matter told Reuters.
Late last week Aramco confirmed a Reuters report that it was working on a possible purchase of a “strategic stake” in Saudi Basic Industries Corp. (SABIC) from the Public Investment Fund, the kingdom’s top sovereign wealth fund.
Aramco’s initial thinking is to buy the full stake owned by the Public Investment Fund (PIF), but if that fails to materialize Aramco could end up with a stake in SABIC of more than 50 percent, making it a majority owner, the sources said.
No final decision has been made on the size of the stake as the discussions are still at a very early stage, they added.
Aramco declined to comment. The PIF did not respond to a Reuters request for comment.
Riyadh-listed SABIC, the world’s fourth-biggest petrochemicals firm, has a market capitalization of 385.2 billion Saudi riyals ($103 billion).
The potential acquisition would affect the time frame of Aramco’s planned initial public offering set for later this year, the state oil giant’s chief executive, Amin Nasser, said in a TV interview on Friday.
Aramco plans to boost investments in refining and petrochemicals to secure new markets and sees growth in chemicals as central to its downstream strategy to cut the risk of an oil demand slowdown.
Aramco plans to raise its refining capacity to between 8 million and 10 million barrels per day, from around 5 million bpd now, and double its petrochemicals production by 2030.
Aramco, the world’s largest oil producer, pumps around 10 million bpd of crude oil.