WEEKLY ENERGY RECAP: OPEC+ keeps market in check

Workers walk past storage tanks at Tullow Oil’s Ngamia 8 drilling site in Lokichar, Kenya. (Reuters)
Updated 20 August 2019
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WEEKLY ENERGY RECAP: OPEC+ keeps market in check

  • Brent crude made a slight rebound over the week to finish at $58.64 per barrel
  • While traders continue to worry about a coming global recession and reduced global oil demand as a result, OPEC+ is continuing to stabilize the market

Brent crude remained below the $60 per barrel barrier but made a slight rebound over the week to finish at $58.64 per barrel. WTI also achieved a slight weekly rise to $54.87 per barrel.

Global financial markets wobbled with traders and speculators looking to cash out amid fears of a looming global recession — the same driver for current jitters in the oil markets.

Equity market traders and oil future market speculators have been selling after the US Treasury bond yield curve inverted for the first time since 2007. The US short-term bond yields dipped below 10-year. This is a marker for every recession cycle for the past 50 years.

The EIA reported an increase in US crude oil stocks by 1.6 million barrels while market participants expected a drop in US crude oil inventory as US refining runs remained high and utilization increased to 94.3 percent ahead of October refinery maintenance season.

US Refining margins are still strong enough to encourage refiners to keep runs high. The refiners’ output for both gasoline and middle distillate remains strong amid low unemployment in the US that is expected to bolster gasoline demand.

US crude oil inventories typically decline at this time of the year before heading into the fall refinery maintenance season, which is expected to peak in October. So the surprise gain in US crude stockpiles shouldn’t add to the deepening concerns over the outlook for global oil demand — which remains strong.

In China, even though some one million barrels a day of refining capacity went offline during the maintenance season in June and July, China’s refinery throughput in July stood at 12.4 million bpd as the country added newly built or expanded refineries.

While traders continue to worry about a coming global recession and reduced global oil demand as a result, OPEC+ is continuing to stabilize the market.


Saudi market regulator in talks with Aramco on IPO rules

Updated 18 September 2019

Saudi market regulator in talks with Aramco on IPO rules

  • Kingdom’s stock market regulator typically requires firms offer at least 20% to 30% of their shares when floating
  • Aramco’s primary listing will be on the Saudi stock exchange (Tadawul) in Riyadh

RIYADH: Saudi Arabia’s Capital Market Authority (CMA) is in talks with Saudi Aramco and its advisers about the regulatory requirements for listing on the domestic stock exchange, its chairman Mohammed bin Abdullah Elkuwaiz told Reuters.
“We continue to have discussions with the company and its advisers on both their readiness, as well as our regulatory requirements for the market,” Kuwaiz said on Wednesday.
Asked whether there will be any waivers or exemptions for the company’s listing, Kuwaiz told Reuters in an interview that the CMA is “still having those discussions.”
The Kingdom’s stock market regulator typically requires firms offer at least 20% to 30% of their shares when floating.
Aramco, whose chairman Yassir Al-Rumayyan said this week that the IPO would be ready within the next year and preparations were continuing despite Saturday’s attacks on its facilities, is yet to file its prospectus with the Saudi regulator.
“We receive waivers or exemption requests where needed and we review them on a case by case basis,” Kuwaiz said, in reference to those discussions.
Aramco’s primary listing will be on the Saudi stock exchange (Tadawul) in Riyadh, but the government is still considering a secondary listing overseas, Saudi finance minister, Mohammed Al-Jadaan told Reuters in an interview on Wednesday.