Oil rises on US-China trade talks, supply cuts

US crude oil production stayed at a record 11.7 million barrels per day in the last week of 2018. (Reuters)
Updated 07 January 2019
0

Oil rises on US-China trade talks, supply cuts

  • The US and Beijing have been locked in an escalating trade spat since early 2018, raising import tariffs on each other’s goods
  • ‘The US supply glut remains a bearish concern’

SINGAPORE: Oil prices rose by more than 1 percent on Monday, lifted by optimism that talks could soon resolve the trade war between the United States and China, while supply cuts by major producers also supported the market.
Brent crude futures were at $57.75 per barrel at 0404 GMT, up 69 cents, or 1.2 percent, from their last close.
US West Texas Intermediate (WTI) crude oil futures were at $48.67 per barrel, up 71 cents, or 1.5 percent.
Financial markets were riding a relief rally on Monday on expectations that face-to-face trade negotiations between delegates from Washington and Beijing, due to start on Monday, would lead to an easing in tensions between the two biggest economies in the world.
The United States and Beijing have been locked in an escalating trade spat since early 2018, raising import tariffs on each other’s goods. The dispute has weighed on economic growth.
Goldman Sachs said in a note on Monday it had downgraded its average Brent crude oil forecast for 2019 from $70 per barrel to $62.50 a barrel because of “the strongest macro headwinds since 2015.”
J.P. Morgan, another US bank, said in a note late last week that “the 3 percent global growth pace we have been anticipating for the next two quarters looks increasingly challenging.
The bank also said that “bond and commodity markets appear to be pricing in on average close to a 60 percent chance of a US recession over the coming year compared to a 40 percent chance by our economists and 27 percent chance by the consensus.”
Despite the likelihood of a slowdown, crude future prices were being supported by supply cuts started late last year by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC Russia.
OPEC oil supply fell in December by 460,000 barrels per day (bpd), to 32.68 million bpd, a Reuters survey found last week, led by cuts from top exporter Saudi Arabia.
Potentially undermining OPEC’s efforts is swelling US oil supply.
US crude oil production stayed at a record 11.7 million bpd in the last week of 2018, according to weekly data by the Energy Information Administration (EIA) released on Friday.
That makes the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.
Record output is also swelling US fuel stockpiles.
Crude oil inventories rose by 7,000 barrels in the week ending Dec. 28, to 441.42 million barrels.
Distillate and gasoline stocks, however, rose by a whopping 9.5 million and 6.9 million barrels, to 119.9 million and 240 million barrels respectively, the EIA data showed.
“The US supply glut remains a bearish concern,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.


Twitter triples first-quarter profit to $191 million

Updated 23 April 2019
0

Twitter triples first-quarter profit to $191 million

  • Profits in the first quarter hit $191 million, compared with $61 million a year earlier
  • The longstanding metric of monthly active users was 330 million in the January-March period

WASHINGTON: Twitter said Tuesday its profits tripled in the past quarter even as it ramped up efforts to root out abuse and misconduct on its short messaging platform.
Profits in the first quarter hit $191 million, compared with $61 million a year earlier, while revenues increased 18 percent to $787 million.
Twitter’s global user base appeared to show modest growth even as the company transitions to a different way of measuring it.
The longstanding metric of monthly active users was 330 million in the January-March period, an increase of nine million from the past quarter but down slightly from a year ago.
But Twitter no longer will use that measure, switching instead to “monetizable” daily active users — 134 million in the past quarter, up from 120 million last year.
Chief executive Jack Dorsey said Twitter is benefiting from its moves to root out abusive and inauthentic content that had hurt Twitter’s reputation.
“We are taking a more proactive approach to reducing abuse and its effects on Twitter,” said Dorsey.
“We are reducing the burden on victims and, where possible, taking action before abuse is reported.”
He added that Twitter aims to become “more conversational” and has launched a prototype for a new app called “twttr,” with the goal of “making conversation on Twitter feel faster, more fluid and more fun.”