Oil edges lower, set for big weekly decline

A warning on spare capacity by the International Energy Agency pushed Brent higher on Thursday, helping it recoup some losses. (Reuters)
Updated 13 July 2018

Oil edges lower, set for big weekly decline

TOKYO: Oil prices edged lower on Friday and were set for a second weekly fall, as the market shrugged off a warning that spare capacity may be stretched as OPEC and Russia increase production.
Brent crude eased 36 cents, or 0.5 percent, to $74.09 by 0326 GMT. On Thursday it gained $1.05 a barrel, rebounding from a session low of $72.67. It is heading for a weekly fall of nearly 4 percent.
US crude dipped 4 cents to $70.29, after a five-cent decline in the previous session. It is heading for a weekly decline of nearly 5 percent.
It has been a wild week for oil prices with both the main benchmarks suffering heavy losses on Wednesday as traders focused on the return of Libyan oil to the market amid concerns about a China-US trade war.
However, a warning on spare capacity by the International Energy Agency (IEA) pushed Brent higher on Thursday, helping it recoup some losses.
“It is a tough market,” said Tony Nunan, oil risk manager at Mitsubishi Corp. in Tokyo. “I think it is supported by relatively strong demand and inventories are falling, but if you look a little bit ahead US shale oil just continues to grow and then it depends on what goes on with OPEC.”
The Organization of the Petroleum Exporting Countries (OPEC) and other key producers including Russia have responded to the recent market tightness by easing a supply-cut agreement.
The IEA cautioned that the world’s oil supply cushion “might be stretched to the limit” due to production losses in several different countries.
“Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit,” the Paris-based IEA said in its monthly report.
“This vulnerability currently underpins oil prices and seems likely to continue doing so,” the agency said.
China’s crude oil imports fell for a second month in a row in June as shrinking margins and volatile oil prices led some independent refiners, known as “teapots,” to scale back purchases, official data showed on Friday.


Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

Updated 14 October 2019

Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

TOKYO: Under-pressure start-up WeWork is considering two huge bailout plans including a cash injection that could see Japanese investment titan SoftBank take control of the firm, according to reports.
The office-sharing giant had been on course for a massive initial public offering until last month when questions began to be asked over its governance and profit outlook.
The firm’s valuation plunged from $47 billion in January to less than $20 billion in September and the listing plans have been dropped, while co-founder Adam Neumann stepped down as chief executive.
With New York-based parent company We Co. not expected to push for the IPO this year, the cash-strapped firm is looking for a financial lifeline.
The Wall Street Journal, New York Times and Bloomberg News cited unnamed sources close to the talks as saying SoftBank — the US firm’s biggest shareholder — had drawn up a proposal that gives it full control of WeWork.
The move would dilute the voting power of Neumann, who remains as chairman of the company he started in 2010 and also currently maintains control a majority of voting shares.
They also reported that WeWork is looking at a deal with Wall Street giant JP Morgan to raise $5 billion in debt, with the Times saying directors of We would be meeting as soon as Monday afternoon to discuss that.
“WeWork has retained a major Wall Street financial institution to arrange financing,” the Journal reported a company spokesman as saying.
“Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”
The New York-based startup that launched in 2010 has touted itself as revolutionizing commercial real estate by offering shared, flexible workspace arrangements, and has operations in 111 cities in 29 countries.
However, the company, which lost $1.9 billion last year, has faced skepticism over its ability to make money, especially if the global economy slows significantly.