OPEC plans informal September 26-28 meeting in Algeria
OPEC plans informal September 26-28 meeting in Algeria
The Vienna-based Organization of the Petroleum Exporting Countries said in a statement that the meeting would take place on the sidelines of the International Energy Forum in Algeria from September 26 to 28.
“OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market,” it said.
OPEC President Mohammed bin Saleh Al-Sada reiterated the organization’s view that oil demand will pick up in the third and fourth quarters of this year.
OPEC sees recent oil price declines and current market volatility as “only temporary” and due to weak refinery margins, an inventory overhang and the impact of Britain’s decision to leave the EU on the crude oil futures market.
An expected return of economic growth in oil-consuming countries would rekindle demand for oil in the remainder of the year while oil supply would tighten, leading to higher prices.
Al-Sada added that more investment in oil production was needed to meet growing demand and offset declining output from existing wells.
Oil production was expected to decline as a result of an “unprecedented drop in capital expenditure” in the industry since last year.
Oil edged higher to near $42 a barrel in Asia Monday but analysts said the increase was unlikely to last as the commodity remains under pressure by a supply glut and a strong dollar.
Prices have been fluctuating since entering a bear market last week, falling more than 20 percent and closing below $40 a barrel for the first time since April.
OPEC said last month it expected the global supply glut to ease further this year and next thanks to reductions in oil output from producers outside the cartel, particularly the US.
If accurate, this would be a vindication of its strategy since 2014 of squeezing non-OPEC suppliers by keeping production at high levels despite low prices.
In its July monthly report, OPEC predicted a drop in non-OPEC output to 56.0 million barrels per day (bpd) this year from 57.0 million bpd in 2015.
In 2017, a further drop to 55.9 million bpd is expected, OPEC said, due in part to further falls in production by US shale oil producers, who need a higher oil price than the current $45-50 to survive.
Malaysia reviews China infrastructure plans
- Malaysia's scandal-mired former PM Najib Razak signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.
- New Prime Minister Mahathir Mohamad has announced a planned high-speed rail link between Kuala Lumpur and neighboring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.
KUALA LUMPUR: Malaysia has been a loyal partner in China’s globe-spanning infrastructure drive, but its new government is to review Beijing-backed projects, threatening key links in the much-vaunted initiative.
Kuala Lumpur’s previous regime, led by scandal-mired Najib Razak, had warm ties with China, and signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.
But the long-ruling coalition was unexpectedly voted out last month by an electorate alienated by allegations of corruption and rising living costs.
Critics have said that many agreements lacked transparency, fueling suspicions they were struck in exchange for help to pay off debts from the financial scandal which ultimately helped bring down Najib’s regime.
The new government, led by political heavyweight Mahathir Mohammed, has pledged to review Chinese deals seen as dubious, calling into question Malaysia’s status as one of Beijing’s most cooperative partners in its infrastructure push.
China launched its initiative to revive ancient Silk Road trading routes with a global network of ports, roads and railways — dubbed “One Belt, One Road” — in 2013.
Malaysia and Beijing ally Cambodia were seen as bright spots in Southeast Asia, with projects in other countries often facing problems, from land acquisition to drawn-out negotiations with governments.
“Malaysia under Najib moved quickly to approve and implement projects,” Murray Hiebert, a senior associate from think-tank the Center for Strategic and International Studies, told AFP.
Chinese foreign direct investment into Malaysia stood at just 0.8 percent of total net FDI inflows in 2008, but that figure had risen to 14.4 percent by 2016, according to a study from Singapore’s ISEAS-Yusof Ishak Institute.
However, Hiebert said it was “widely assumed” that Malaysia was striking quick deals with China in the hope of getting help to cover debts from sovereign wealth fund 1MDB.
Najib and his associates were accused of stealing huge sums of public money from the investment vehicle in a massive fraud. Public disgust at the allegations — denied by Najib and 1MDB — helped topple his government.
Malaysia’s first change of government in six decades has left Najib facing a potential jail term.
New Prime Minister Mahathir Mohamad has announced a planned high-speed rail link between Kuala Lumpur and neighboring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.
The project was in its early stages and had not yet received any Chinese funding as part of “One Belt, One Road.” But Chinese companies were favorites to build part of the line, which would have constituted a link in a high-speed route from China’s Yunnan province to trading hub Singapore, along which Chinese goods could have been transported for export.
Work has already started in Malaysia on another line seen as part of that route, with Chinese funding — the $14-billion East Coast Rail Link, running from close to the Thai border to a port near Kuala Lumpur.
Mahathir has said that agreement is now being renegotiated.
Other Chinese-funded initiatives include a deep-sea port in Malacca, near important shipping routes, and an enormous industrial park.
It is not clear yet which projects will be amended but experts believe axing some will be positive.
Alex Holmes, Asia economist for Capital Economics, backed canceling some initiatives, citing “Malaysia’s weak fiscal position and that some of the projects are of dubious economic value.”
The Chinese foreign ministry did not respond to request for comment.