Saudi Arabia trimming oil exports in December, but ‘no consensus’ among oil producers to cut output

A worker checks the valve of an oil pipe at the Lukoil company owned Imilorskoye oil field outside the Siberian city of Kogalym, Russia, January 25, 2016. (Reuters)
Updated 12 November 2018
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Saudi Arabia trimming oil exports in December, but ‘no consensus’ among oil producers to cut output

  • “There is no consensus yet among oil producers about cutting production,” Saudi Energy Minister Khalid Al-Falih said
  • “We have to study all the factors,” he added

ABU DHABI: Saudi Arabia plans to reduce oil supply to world markets by 0.5 million barrels per day in December, its energy minister said on Sunday, as the OPEC power faces uncertain prospects in its attempts to persuade other producers to agree a coordinated output cut.

Khalid al-Falih told reporters that Saudi Aramco’s customer crude oil nominations would fall by 500,000 bpd in December versus November due to seasonal lower demand. The cut represents a reduction in global oil supply of about 0.5 percent.

Saudi Arabia has increased output by just about 1 million bpd this year under pressure from US President Donald Trump and other consuming countries to help balance the market to compensate for lower supplies from Iran due to US sanctions.

But since Iran's customers were given generous waivers to continue buying crude, concerns grew about market oversupply and oil prices fell to below $70 per barrel on Friday from $85 a barrel in October.

"We have been increasing production in response to demand," Falih told reporters in Abu Dhabi ahead of a joint OPEC, non-OPEC market monitoring committee meeting.

"I'll tell you a piece of news which is (that) December nominations are 500,000 barrels less than November. So we are seeing a tapering off part of it is year end, part of it is maintenance.... so we will be shipping less in December than we are in November.”

Saudi Arabia is discussing a proposal that could see OPEC and non-OPEC oil producers cut output by up to 1 million bpd, two sources told Reuters earlier on Sunday, as the world's top oil exporter grapples with a drop in crude prices.

“There is no consensus yet among oil producers about cutting production,” Al-Falih said.

It was “premature to talk about a specific action,” he told reporters, asked about the possibility of an output from the entire oil-production bloc. “We have to study all the factors,” Falih said.

The sources said any such deal would depend on factors including the level of Iranian exports after the United States imposed sanctions on Tehran but granted Iran's top oil buyers waivers to continue buying oil.

Russian participation was key to helping OPEC rebalance the market during 2017-18. But Russian Energy Minister Alexander Novak said on Sunday he wasn’t certain the market would be oversupplied next year.

He said the oversupply for the next few months would be seasonally driven while by mid 2019 the market could be balanced again and demand could even exceed supply.


New designer’s ranges help lift sales at Burberry

A window of a Burberry store in central London, UK. The brand said new products accounted for about half the wares in its shops by the end of June. (Reuters)
Updated 17 July 2019
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New designer’s ranges help lift sales at Burberry

  • Fashion label more than a year into an overhaul to take it more upmarket

LONDON: British luxury brand Burberry reported a pick-up in first quarter sales after it began shifting more new designs by creative chief Riccardo Tisci into its stores as part of a turnaround plan.

The fashion label is more than a year into a high stakes overhaul by CEO Marco Gobbetti aimed at taking Burberry more upmarket  and reviving its image, including with edgier takes by Tisci on some of its classic products such as the trench coat.
The brand said new products had accounted for around half the wares on offer in its shops by the end of June, more than some analysts had expected.
This helped to lift same store sales by 4 percent — following lacklustre growth of 1 percent in the previous three months and topping market expectations of around 2 percent — and its gamble on a new designer appeared to be paying off for now.
“The consumer response was very promising, delivering strong growth in our new collections,” Gobbetti said in a statement.
Burberry has in recent quarters lagged the performance of luxury industry leaders like LVMH’s Louis Vuitton or Kering’s Gucci, which benefited from thriving demand in China in spite of US trade tensions.

FASTFACT

Thomas Burberry was just 21 years old when he established the company of the same name in 1856.

Those firms are due to post sales for the April to June quarter next week.
The pace of Burberry’s revenue growth within China and more broadly across Asia also improved slightly, despite slowing Chinese economic growth.
Its revamp has included rolling out a new logo-style print, or monogram, it hopes will catch on as it works on extending its reach in high-margin handbags; and it is redesigning stores as well as making a big marketing push with social media campaigns.
The company maintained its forecast for broadly stable revenue and operating margin at constant exchange rates for the 2020 financial year. Revenue and operating profit are not expected to pick up in a more meaningful way until 2021.