WEEKLY ENERGY RECAP: Global trade outlook improves

The EIA said that crude inventories dropped by 4.8 million barrels. (Reuters)
Updated 08 September 2019

WEEKLY ENERGY RECAP: Global trade outlook improves

  • Bullish sentiment returned to the market after the US and China agreed to hold trade talks in October

Oil prices kept an upward momentum for the second week running, with Brent finishing at $61.54 per barrel and WTI advancing to $56.52.

Bullish sentiment returned to the market after the US and China agreed to hold trade talks in October that renewed hopes for a resolution to their dispute. 

The Energy Industry Administration released a positive weekly inventory report. Strong drawdowns in US crude oil and gasoline inventories, and a dip in production eased fears of an imminent recession. 

The EIA said that crude inventories dropped by 4.8 million barrels to 423 million barrels. EIA data showed large demand for gasoline and distillate fuels such as diesel and heating oil.

An increase in output from both OPEC and Russia did not appear to weigh on prices even as some market participants made much of the uptick in OPEC production of just 150,000 barrels in August. 

OPEC production in August was 29.71 million million barrels per day (bpd), while in July the group accounted for 29.56 bpd.  In July, OPEC compliance for cutting 1.2 million bpd was 159 percent.

Still, that wasn’t enough to lift prices as traders remained focused on the grim global economic outlook.

The oil media largely ignored the slowdown in upstream spending that is being driven by the uncertainty over the direction of the oil price.

This raised questions over the growth in US shale output that is so sensitive to downward oil price movement.

New US pipeline capacity starting up in the second half of 2019 will speed the transport of shale oil from the Permian Basin and Eagle Ford to export terminals around Houston and Corpus Christi. This could have a drastic impact on prices for the US measure.

 


Egypt expects several share offerings by end of year

Updated 15 September 2019

Egypt expects several share offerings by end of year

  • One small company worth about 50 million Egyptian pounds was also expected to offer shares on the Nile Stock Exchange

CAIRO: Egypt expects two state companies and one private pharmaceuticals firm worth more than $61.3 million, or one billion Egyptian pounds, to make share offerings by the end of the year, an official at the Financial Regulatory Authority said on Sunday.
One small company worth about 50 million Egyptian pounds was also expected to offer shares on the Nile Stock Exchange, which specializes in small and medium sized enterprises, said Sayed Abdel Fadeel, head of the authority’s corporate finance department. He did not name the companies.
Egypt promised to sell minority stakes in several state companies in late 2018 but postponed the offerings following emerging market turbulence.