Oil prices drop on worries about oversupply

Saudi Arabia and large producers are ramping up output to offset losses that are likely to come. (Reuters)
Updated 24 July 2018
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Oil prices drop on worries about oversupply

TOKYO: Oil prices extended declines into a second session on Tuesday as attention shifted to the risk of oversupply, with market participants shrugging off escalating tensions between the US and Iran.
Brent crude oil was down 19 cents, or 0.3 percent, at $72.87 a barrel by 0345 GMT, after settling down 1 cent on Monday. US crude was down 21 cents, or 0.3 percent, at $67.68 a barrel. The contract fell 37 cents the previous day.
Earlier in Monday’s session, the market had risen after President Donald Trump warned of dire consequences for Iran if it threatened the US.
“While oil prices were the primary beneficiary of the weekend’s headline battle between President Trump and Iranian President Rouhani, that boost started to fizzle as traders then veered to oversupply concerns,” said Stephen Innes, head of trading for APAC at brokerage OANDA.
Iran has been under increasing pressure from the US, with Trump’s administration pushing countries to cut all imports of Iranian oil from November.
Saudi Arabia and large producers are ramping up output to offset losses that are likely to come as the November deadline approaches.
Meanwhile, US crude inventories at the delivery hub at Cushing, Oklahoma gained in the four days to Friday, according to information supplier Genscape, traders said.
On a weekly basis, stockpiles at the hub were expected to fall for the 10th consecutive week, traders said.
The market has also been dented by concerns about the impact on global economic growth and energy demand of escalating disputes over global trade.
G20 finance leaders on the weekend voiced concern about the risk to global growth from trade tensions between the US and China, among others.
“The lingering trade war effects continue to raise global growth concerns that continue to dampen sentiment,” Innes said.


Siemens CEO pushes plans to boost Iraqi power infrastructure

Updated 23 September 2018
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Siemens CEO pushes plans to boost Iraqi power infrastructure

FRANKFURT: Siemens said its boss Joe Kaeser met Iraq’s prime minister on Sunday to discuss a proposal by the German company to expand the Middle East nation’s power production.
The German engineering group said it was proposing a deal to add 11 gigawatt (GW) of capacity over four years, saying this would boost the country’s capacity by nearly 50 percent.
It did not give a value, but such a contract would be worth several billion euros based on previous comparable deals.
Iraq has a wide gap between electricity consumption and supply. Peak demand in the summer, when people turn on air conditioners due to high temperatures, is about 21 GW, far exceeding the 13 GW the grid is currently provides, experts say.
Kaeser said in a statement after meeting Prime Minister Al-Abadi that they had “discussed the comprehensive Siemens roadmap to build a better future for the Iraqi people.”
“In Egypt, we have done the same and successfully built up the power infrastructure in record time with the highest efficiency,” he said.
In 2015, Siemens signed an 8 billion euro ($9.4 billion) deal with Egypt to supply gas and wind power plants to add 16.4 gigawatts of capacity to the country’s power grid, marking the group’s single biggest order.
The proposal for Iraq, first pitched in February, would include cutting Iraq’s energy losses, introducing smart grids, expanding transmission grids, upgrading existing plants and adding new capacity.
The group would also help the government secure funding from international commercial banks and export credit agencies with German government support, creating thousands of jobs in Iraq.
Siemens would donate a $60 million grant for software for Iraqi universities, it said.