Oil prices ease on potential supply hikes by Russia

Supply outages in Libya pushed oil prices higher late last week, although prices still ended down for a second straight week. Above, the El Sharara oilfield in Libya in 2014. (Reuters)
Updated 16 July 2018

Oil prices ease on potential supply hikes by Russia

SEOUL: Oil prices fell on Monday as concerns about supply disruptions eased and Libyan ports resumed export activities, while traders eyed potential supply increases by Russia and other oil producers.
Brent crude futures were down 48 cents, or 0.6 percent, at $74.85 a barrel at 0302 GMT.
US West Texas Intermediate (WTI) crude was down 39 cents, or 0.6 percent, at $70.62 a barrel.
Supply outages in Libya and strike action in Norway and Iraq pushed oil prices higher late last week, although prices still ended down for a second straight week.
“Crude oil prices fell as fears of supply disruptions eased. News that Libya’s state oil producer had restarted output from a major oil field ignited the selloff earlier in the week,” ANZ Bank said in a note.
The market focus shifted toward possible supply increases, even as a Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike.
“There are mixed supply signals and I think the (Brent) price is likely to be in the low-to-mid $70s range,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
“A summit between US President Trump and Russian President Putin is also being watched in case they say something about oil,” Kim said.
US President Donald Trump and Russian President Vladimir Putin are set to hold their first stand-alone meeting in Helsinki on Monday. Trump has been vocal about his dissatisfaction with higher oil prices, asking OPEC to lower prices.
Russia and other major oil producers may increase output further should supply shortages hit the global oil market, Russian Energy Minister Alexander Novak said on Friday.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA, said US-China trade tensions “should subside this week and could be a possible plus for oil prices,” but a possible sale of US oil reserves would hurt prices.
“With the Trump administration actively considering tapping into the nation’s Strategic Petroleum Reserve, it could weigh negatively,” Innes said.
The United States holds a reserve of about 660 million barrels, and the Trump administration was considering drawing on the country’s oil reserve, which would increase supply, according to a Bloomberg report.
Meanwhile, the number of rigs drilling in the United States was unchanged at 863 in the week to July 13 as the rate of the growth slowed amid a fall in crude prices.


Hong Kong airport transit from June 1 excludes mainland flights: Cathay Pacific

Updated 2 min 7 sec ago

Hong Kong airport transit from June 1 excludes mainland flights: Cathay Pacific

  • Transit through the airport has been barred since March 25
  • Cathay has cut capacity by around 97 percent due to a fall in demand and strict quarantine regulations

SYDNEY: Cathay Pacific Airways said on Saturday that the reopening of transit services for passengers at Hong Kong International Airport from June 1 will not include those traveling to and from mainland China.
Hong Kong Chief Executive Carrie Lam announced earlier this week that some transit passengers would be allowed through the hub from Monday, but did not provide further details. Transit through the airport has been barred since March 25 as part of measures taken to help control the spread of the coronavirus pandemic.
Cathay said travelers could transit Hong Kong if their itinerary was on a single booking and the connection time to the next flight was within eight hours.
“In this first phase, transiting to and from destinations in mainland China is not available,” the airline said on its website.
China’s aviation regulator has been flooded with tens of thousands of social media comments criticizing it and the Chinese government for the small number of flight options to bring home people stranded overseas.
The regulator drastically reduced the number of allowed international flights to prevent the potential of importing COVID-19 infections. Many foreign airlines are barred altogether and mainland carriers can fly just one weekly passenger flight on one route to any country, which has sent fares skyrocketing.
That rule does not apply to airlines from Hong Kong, such as Cathay, which are allowed more flights to and from the mainland, but the airline’s statement on Saturday indicated it cannot immediately take advantage of the boom in demand.
Cathay has cut capacity by around 97 percent due to a fall in demand and strict quarantine regulations associated with the pandemic.
Rival Asian hub Singapore, which is not allowed nearly as many mainland flights, is gradually allowing some transit traffic to resume from June 2.