Oil drops 1 pct as economic outlook weakens, US supply surges

With surging US oil supply also unsettling markets, Brent crude futures fell 56 cents, 0.8 percent, to settle at $65.74 a barrel. (Reuters/File Photo)
Updated 09 March 2019
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Oil drops 1 pct as economic outlook weakens, US supply surges

NEW YORK: Oil prices fell about 1 percent on Friday after disappointing US job growth revived concerns about a slowing global economy and weaker demand for oil.
With surging US oil supply also unsettling markets, Brent crude futures fell 56 cents, 0.8 percent, to settle at $65.74 a barrel. The international benchmark gained 1 percent for the week.
US West Texas Intermediate (WTI) crude futures fell 59 cents, or 1 percent, to settle at $56.07 a barrel. WTI rose 0.5 percent for the week.
US job growth almost stalled in February, with the economy creating only 20,000 jobs amid a contraction in payrolls in construction and several other sectors. The report dragged down US stock markets, along with oil futures.
Financial markets also took a hit after comments on Thursday from European Central Bank President Mario Draghi, saying the European economy was in “a period of continued weakness.”
“If we see equity markets continue to sink, it will eventually drag energy prices lower with it,” Brian LaRose, a technical analyst at United-ICAP.
The European and US economic weakness comes as growth in Asia is also slowing.
China’s dollar-denominated February exports fell 21 percent from a year earlier, representing the biggest drop in three years and far worse than analysts had expected, while imports dropped 5.2 percent.
“We’ve witnessed this week a rekindling of worries about demand growth,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
So far oil demand has held up, especially in China, where imports of crude remain above 10 million barrels per day (bpd). Yet a slowdown in economic growth could eventually dent fuel consumption and pressure prices.
On the supply side, oil has received support this year from output cuts led by the Organization of the Petroleum Exporting Countries. Saudi Arabia’s crude oil production in February fell to 10.136 million barrels per day (bpd), a Saudi industry source told Reuters.
US sanctions against the oil industries of OPEC members Iran and Venezuela have also supported futures.
But the United States is giving individuals and entities more time to wind down certain financial contracts or other agreements related to Venezuela’s state-owned oil company, the US Treasury Department’s Office of Foreign Assets Control (OFAC) said.
Meanwhile, US crude production has increased by more than 2 million bpd since early 2018 to 12.1 million bpd, making America the world’s biggest producer.
Investment bank Jefferies said US output growth was largely being fueled by onshore shale production, which had recently benefited from investments by Exxon Mobil and Chevron.
However, US energy firms this week cut the number of oil rigs operating for a third week in a row to the lowest level in 10 months, General Electric Co’s Baker Hughes energy services firm said on Friday.


Former Nissan chairman Ghosn appears in Tokyo court

Updated 23 May 2019
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Former Nissan chairman Ghosn appears in Tokyo court

  • It is the first of a series of hearings to iron out logistics for Carlos Ghosn’s actual trial
  • Nissan’s former chairman has hired a strong legal team as he fights to clear his name

TOKYO: Nissan’s former chairman, Carlos Ghosn, appeared in a Japanese courtroom Thursday for a hearing ahead of his trial on accusations of financial misconduct.
It was the first of a series of hearings to iron out logistics for Ghosn’s actual trial. The trial date has not been set, and experts say it could be months away.
Ghosn, who led the Japanese automaker for two decades, was arrested in November and charged with underreporting his income and breach of trust. He was released on bail in March, rearrested in April on fresh accusations and then released again on bail on April 25.
Ghosn insists he is innocent and says he was targeted in a “conspiracy” by others at Nissan Motor Co.
Nissan, which is allied with Renault of France, has seen profits nose-dive amid the fallout from Ghosn’s arrest.
Ghosn has hired a strong legal team as he fights to clear his name. One of his top lawyers, Junichiro Hironaka, was seen walking into the courtroom Thursday with Ghosn.
One of the conditions of Ghosn’s release on bail is that he is forbidden to contact his wife. Prosecutors say that’s to prevent evidence tampering.
Ghosn’s lawyers challenged that restriction, saying it is a violation of human rights, but the Supreme Court rejected their appeal Tuesday.
The lawyers can appeal again to have the restriction removed.
In a briefing Thursday, Deputy Chief Prosecutor Shin Kukimoto welcomed the Supreme Court’s decision.
“For married people to be together is important, but I feel there was enough reason for the Supreme Court to support us in this restriction,” he said.
Kukimoto declined comment on the hearing, which was closed to reporters and the public.
Kukimoto also said the maximum penalty upon conviction of all 15 counts of the charges Ghosn is facing is 15 years in prison and a fine of ¥150 million ($1.4 million).