Oil gains as Saudi stands by OPEC cuts, US drilling drops

An Aramco oil tank is seen at the Production facility at Saudi Aramco's Shaybah oilfield in the Empty Quarter, Saudi Arabia May 22, 2018. (Reuters)
Updated 12 March 2019

Oil gains as Saudi stands by OPEC cuts, US drilling drops

  • Saudi’s Falih says too early to change OPEC+ policy in April

LONDON: Oil prices rose on Monday, lifted by comments from Saudi Energy Minister Khalid Al-Falih that an end to OPEC-led supply cuts was unlikely before June and a report showing a fall in US drilling activity.
US West Texas Intermediate (WTI) crude oil futures were at $56.73 per barrel at 1320 GMT, up 66 cents, or 1.18 percent from their last close.
Brent crude futures were at $66.49 per barrel, up 75 cents, or 1.14 percent.
Falih told Reuters on Sunday it would be too early to change a production curb pact agreed by the Organization of the Petroleum Exporting Countries and allies including Russia before the group’s meeting in June.
“We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward,” Falih said.
Oil markets have been supported this year by ongoing supply cuts by the group called OPEC+, which has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year to tighten markets and prop up prices.
The group will meet on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy.
Further underlining the desire of the world’s top exporter to drive down prices, a Saudi official said the country planned to cut crude oil exports in April to below 7 million barrels per day.
Prices were also buoyed by US energy services firm Baker Hughes’ latest weekly report showing the number of rigs drilling for new oil production in the United States fell by nine to 834.
But the Paris-based International Energy Agency predicted a surge in US production, which would see its exports exceed Russia’s and near Saudi Arabia’s by 2024.
“The second wave of the US shale revolution is coming,” the IEA’s Fatih Birol said.
“It will see the United States account for 70 percent of the rise in global oil production ... with profound implications for the geopolitics of energy.”
Markets were held back after US employment data raised concerns that an economic slowdown in Asia and Europe was spilling into the United States.
“Brent prices have struggled to push firmly above $65/bbl in part because a strong US dollar remains a major headwind for commodity prices. In addition, global GDP growth has been soft and oil demand has yet to pick up seasonally,” Bank of America Merrill Lynch said in a report on Monday.
But citing the OPEC+ cuts and low global stocks, the bank predicted prices for Brent would reach $70 a barrel this year.


Case against Ghosn excuse to get him out of Nissan, claim lawyers

Updated 13 November 2019

Case against Ghosn excuse to get him out of Nissan, claim lawyers

  • The former motor giant chief’s legal team has alleged that both his arrest and the prosecution efforts have been illegal

TOKYO: The drama surrounding the arrest of Carlos Ghosn, former boss of motor giants Nissan and Renault, has yet to reach its climax. Yet the plot continues to thicken with each new development.

On Monday, Ghosn’s defense lawyers unveiled court submissions highlighting the circumstances in which the 65-year-old executive was arrested and subsequently held in detention.

“We believe that Mr. Carlos Ghosn is innocent. We believe that the arrest and the prosecution efforts thus far are illegal and therefore Mr. Ghosn should be immediately released,” the head of his defense team, Junichiro Hironaka, said during a press conference at the Foreign Correspondents Club of Japan in Tokyo on Monday.

Hironaka claimed that Nissan wanted to kick out Carlos Ghosn from the company and therefore put together a team dedicated to searching around for something that would justify them to do that.

“This prosecution motion wasn’t initiated because the prosecution side believed that Mr. Ghosn had committed an illegal act. Fundamentally there is a problem with this being treated as a criminal act,” he said.

Hironaka further said that the prosecutor’s office is supposed to be acting in the public good for everyone and not behalf of a specific corporation.

“From the investigation level, there were various problems and mistakes with this case. Furthermore, the Japanese persecution office can’t reach overseas so they rely on Nissan employees to go into Mr. Ghosn’s offices and residences and removed objects illegally,” he said.

Hironaka said there is no evidence to support the alleged wrongdoing claim that Nissan made payments to SBA in Oman, and Ghosn re-directed that money to himself or his family.

“The amounts that were paid by Nissan matched exactly the amounts due to SBA,” he said.

The lawyer had a similar response to the reports connecting some donations by Ghosn to a school in Lebanon that would somehow benefit himself. “There is absolutely no evidence or factual basis for indicating that,” Hironaka said.

He said that his team is trying to access correct information and find out what evidence the prosecution might have.

“I have made an effort to share information with the media, including the foreign media, during this whole pre-trial motion,” he said.

Under the Japanese system, the prosecutors are not required to disclose all the evidence at their disposal. Japanese law requires that prosecutors must disclose anything related to any evidence related to the specific filings they make.

They must also disclose any evidence that is related to the filings that are made by the defense counsel. However, there is no requirement for them to disclose evidence from other parts.

Ghosn was arrested at Tokyo’s Haneda Airport on Nov. 19, 2018, on multiple charges related to his stewardship of the two companies.

The cases involved not only Nissan-Renault and Japan’s Mitsubishi Motors (part of the Franco-Japanese alliance), but also the Japanese and French governments along with various key players from Asia and the Middle East.

Nissan was on the brink of bankruptcy in March 1999, with about 2 trillion yen ($17.6 billion) in interest-bearing debt.

This is when it entered a capital partnership with major French automaker Renault SA. Ghosn has been credited for turning the company around dramatically since then.

However, fears that the high-profile CEO and chairman was planning to merge Nissan into a much larger multinational motor alliance appeared to have fueled speculation regarding the future of the company.

It was reportedly argued within Prime Minister Shinzo Abe’s government that the automaker would no longer be recognizably Japanese.

The case has larger ramifications and the two governments have routinely become involved in discussions related to its future.

According to news reports, when Macron and Abe met in Buenos Aires, the French president asked that the Franco-Japanese alliance be maintained.

On being asked by Arab News Japan about reports of a prosecution team visiting Saudi Arabia and Oman, Hironaka confirmed that the visit indeed took place after Ghosn’s arrest.

“However, we have not been given any access to any information that they may or may not have gathered there,” he said.