Saudi Arabia’s energy minister Al-Falih says no OPEC+ output policy change until June

Saudi Arabia’s Energy Minister Khalid Al-Falih speaks during the Saudi-India Forum in New Delhi, India. (File photo/Reuters)
Updated 10 March 2019
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Saudi Arabia’s energy minister Al-Falih says no OPEC+ output policy change until June

NEW DELHI: Saudi oil minister Khalid Al-Falih said on Sunday it would be too early to change OPEC+ output policy at the group’s meeting in April and that China and the US would lead healthy global demand for oil this year.
The Organization of the Petroleum Exporting Countries and its allies such as Russia — known as the OPEC+ alliance — will meet in Vienna on April 17-18, with another gathering scheduled for June 25-26.
Falih said the group was unlikely to change its output policy in April and if required would make adjustments in June.
“We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward,” Falih said.
“We will see where the market is by June and adjust appropriately,” Falih said after a meeting with Indian oil minister Dharmendra Pradhan in New Delhi.
OPEC member United Arab Emirates (UAE) said on Sunday it would continue to meet its obligations to cut supply under the producer agreement.
“We will continue to deliver on the OPEC & Non-OPEC commitment for voluntary production adjustments until the global market is re-balanced,” Minister of Energy and Industry Suhail Al-Mazrouei said on Twitter.
On Jan. 1, OPEC+ began new production cuts to avoid a supply glut that threatened to soften prices. The group agreed to reduce supply by 1.2 million barrels per day (bpd) for six months.
Sources recently said the most likely scenario is that the current supply cuts will be extended in June but much depends on the extent of US sanctions on OPEC members Iran and Venezuela.
OPEC’s share of the cuts is 800,000 bpd, to be delivered by 11 members — all except Iran, Libya and Venezuela, which are exempt. The baseline for the reduction was in most cases their output in October 2018.
For Saudi Arabia, the world’s top oil exporter, Falih said output in April was expected to remain at this month’s level of 9.8 million bpd.
“Aramco is finalizing their April allocations today or tomorrow so we will know more on Monday. But my expectation is that April is going to be pretty much like March.”
GLOBAL OIL DEMAND
Falih said total global oil demand is set to grow by around 1.5 million bpd this year.
“If you look at Venezuela alone you would panic, if you look at the US you would say the world is awash with oil. You have to look at the market as a whole. We think 2019 demand is actually quite healthy,” Falih told Reuters.
In Venezuela, suffering from a political and economic crisis, oil exports have plunged 40 percent to around 920,000 bpd since Washington slapped sanctions on its petroleum industry on Jan. 28.
On the other hand, production in US hit a record of more than 12 million bpd in February.
The International Energy Agency last month left its demand growth forecast for 2019 unchanged from January at 1.4 million barrels per day.
Falih said Chinese demand was breaking records month after month and estimated the country would breach 11 million bpd this year.
He also said that along with China and the US, India’s expanding economy was driving global oil demand growth.
After the meeting, India’s oil minister said he wanted Saudi Arabia to play an active role in keeping oil prices at a reasonable level as rising prices affect the Indian economy.
He also invited Saudi Arabia to partner with India in building strategic oil reserves and further invest in India’s refining and Petrochemical sectors.


China opens up finance sector to more foreign investment

Updated 20 July 2019
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China opens up finance sector to more foreign investment

  • China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020
  • Beijing has long promised to further open up its economy to foreign business participation and investment

BEIJING: China lifted some restrictions on foreign investment in the financial sector Saturday, as the world’s second largest economy fights slowing growth at home and a damaging trade war with the US.
China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, a year earlier than originally planned, the Financial Stability and Development Committee said in a statement posted by the central bank Saturday.
Foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies, the statement said.
Beijing has long promised to further open up its economy to foreign business participation and investment but has generally dragged its feet in implementing the moves — a major point of contention with Washington and Brussels.
Saturday’s announcement followed a Friday meeting chaired by economic czar Liu He where policymakers focused on tackling financial risk and financial contagion and pledged new steps to support growth, according to a state council statement.
Additional measures include scrapping entry barriers for foreign insurance companies like a requirement of 30 years of business operations and canceling a 25 percent equity cap on foreign ownership of insurance asset management firms.
Foreign owned credit rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said.
US President Donald Trump has launched a damaging tariff war in an attempt to force Beijing to further open up its economy and limit what he calls its unfair trade practices.
The US and China have hit each other with punitive tariffs covering more than $360 billion in two-way trade.
Trump and Xi Jinping agreed to revive fractious trade negotiations when they met on the sidelines of the G20 summit in Japan on June 29 and top US and Chinese negotiators have held phone talks this month.