Oil bulls oust bears in the first week of 2019

Oil prices have started 2019 on the upswing. (Reuters)
Updated 07 January 2019

Oil bulls oust bears in the first week of 2019

RIYADH: After dwindling to near 16-month lows at the end of 2018, oil prices bounced back in the first week of the year, helped by OPEC’s proactive output cuts and positive economic news from the US.
The year 2019 started with a progressive rebound in oil prices after the 2018-year end nose-dive when Brent crude ended slightly above $52 per barrel. The first week in 2019 closed with Brent crude at $57.06 per barrel and WTI at $47.96 per barrel — one of the best weekly gains in two years.
It marked a change in the bearish sentiment that produced heavy losses in December 2019 when Brent averaged $56.55, the lowest monthly average since September 2017.
OPEC output fell by 530,000 bpd to 32.6 million bpd in December, which is the sharpest pullback since January 2017.
As usual, Saudi Arabia handled most output cuts in December of 420,000 bpd to 10.65 million bpd from a record of just above 11 million bpd reached in November 2018.
The Saudi output cut was compounded by unplanned losses in Iran and in Libya.
Saudi Arabia proactive move has confounded some of the raised voices that called for depressed oil prices “lower for longer.”
These voices suggested oil prices would be weak in 2019 with sluggish demand for crude and the uncertainty over full compliance from OPEC members, including the largest producer Saudi Arabia, over the agreed 1.2 million bpd supply reduction.
On the physical market side, expectations for continued strong oil demand growth in 2019 remain in place, despite concerns about the global economic slowdown that were offset by the positive economic data from the US.
The steep downward price volatility that the oil market experienced at the end of 2018 may have attled US shale oil investors.
During the last quarter of 2018, macroeconomic headwinds raised the specter of a slowing global economy and lower oil demand growth, putting downward pressure on prices while the physical market remained strong throughout 2018.


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.