OPEC sees oil market rebalancing in 2016

Updated 18 January 2016

OPEC sees oil market rebalancing in 2016

LONDON: OPEC forecast on Monday that oil supply from non-member countries will post a
larger-than-expected decline this year due to the collapse in prices, boosting the need for crude from the producer group.
Supply outside the Organization of the Petroleum Exporting Countries (OPEC) would decline by 660,000 barrels per day (bpd) in 2016, led by the United States, OPEC said in a report. Last month, OPEC predicted a drop of 380,000 bpd.
"The analysis indicates that 2016 will be a supply-driven market. It will also be the year when the rebalancing process starts," OPEC said.
"Non-OPEC marginal barrel production in the next six months will be sensitive to sustained low oil prices."
Brent crude, the global benchmark, was last down 18 cents a barrel at $28.76, having earlier dipped below $28 for the first time since December 2003.
A drop in non-OPEC supply would reduce a supply glut which has prompted oil prices to collapse to below $28 a barrel, the lowest since 2003. OPEC's 2014 strategy shift to defend market share and not prices helped deepen the decline.
The price drop has started to slow the development of relatively expensive supply sources such as US shale oil and forced companies to delay or cancel billions of dollars worth of projects, putting some future supplies at risk.
But OPEC's report makes no mention of the supply impact of the lifting of Western sanctions on member-country Iran, which on Monday said it was increasing output by 500,000 bpd — which
would fill most the hole left by non-OPEC members.
For now, OPEC said it pumped less oil in December, reducing the excess in the market. Production including returning OPEC member Indonesia fell by 210,000 bpd to 32.18 million bpd in December, the report said, citing secondary sources.
The report points to a 530,000-bpd supply surplus this year if the group keeps pumping at December's rate, down from 860,000 bpd implied in last month's report.
OPEC left its 2016 global oil demand growth forecast little changed, predicting global demand would rise by 1.26 million bpd, marking a slowdown from 1.54 million bpd in 2015.


UBS fined $51 million by Hong Kong regulator for overcharging clients

Updated 11 November 2019

UBS fined $51 million by Hong Kong regulator for overcharging clients

  • Hong Kong regulator’s investigation exposed ‘serious systemic internal control failures’ at the bank
  • In March, the Securities and Futures Commission banned UBS from leading initial public offerings in Hong Kong for a year

HONG KONG: Swiss bank UBS was fined HK$400 million ($51.09 million) by Hong Kong’s securities regulator for overcharging up to 5,000 clients for nearly a decade, the watchdog said on Monday.
The Hong Kong Securities and Futures Commission (SFC) said in a statement that an investigation found UBS had overcharged clients on ‘post-trade spread increases’ and charges in excess of standard disclosures and rates between 2008 and 2017.
THE SFC said the investigation exposed ‘serious systemic internal control failures’ at the bank. UBS had failed to disclose conflicts of interests and had overcharged some clients in ‘opaque’ trades, it said.
The overcharging affected 5000 Hong Kong managed client accounts in about 28,700 transactions, it said.
UBS has also agreed to repay the clients HK$200 million, the SFC said.
The regulator said the over-charging occurred in the bank’s wealth management division on bond and structured notes transactions.
UBS was found to have increased the spread charged after the execution of a trade without the clients’ knowledge, it said.
In the statement, the SFC said UBS was also found to have falsified some account statements which were issued to financial intermediaries who were authorized to trade for the clients to “conceal the overcharges.”
UBS said the issues were ‘self-reported’ to the SFC and the results found were against the bank’s standard practice.
“The relevant conduct predominantly relates to limit orders of certain debt securities and structured note transactions, which account for a very small percentage of the bank’s order processing system,” the bank said in a statement.
SFC chief executive Ashley Alder said while each “overcharge represented a fraction of each trade” the bank’s “misconduct involved decisions and a pervasive abuse of trust resulting in significant additional revenue for UBS to which it was not entitled.”
In March, the SFC banned UBS from leading initial public offerings in Hong Kong for a year after it found the bank, and some of its rivals, had failed to carry out sufficient due diligence on a number of deals.
UBS was fined HK$375 million while Morgan Stanley was fined HK$224 million, Merrill Lynch HK$128 million and Standard Chartered (StanChart) HK$59.7 million, all for failures when sponsoring, or leading, public market floats.