Oil climbs but still set for big weekly loss over demand worries

Recent data showing a slowdown in US shale output and drilling activity could lend some support to oil prices. (Reuters)
Updated 04 October 2019

Oil climbs but still set for big weekly loss over demand worries

  • For the week, Brent futures were down 6.3 percent, marking its largest weekly loss since July
  • US West Texas Intermediate was down 5.7 percent for the week, also its biggest decline since July

SINGAPORE: Oil futures were higher ahead of the weekend but remained on track for large weekly losses on fears that slower global economic growth will hurt fuel demand, even as Saudi Arabia said it has fully restored oil output after recent attacks.
Brent crude oil futures rose 28 cents, or 0.5 percent, to $57.99 a barrel by 0450 GMT, while US West Texas Intermediate (WTI) crude futures rose 29 cents, or 0.6 percent, to $52.74.
“Asia will probably see some buying emerge over the session as traders hedge potential weekend geopolitical risk, although the session should be quiet with China still on holiday,” said Jeffrey Halley, a senior market analyst at OANDA in Singapore.
For the week, Brent futures were down 6.3 percent, marking its largest weekly loss since July. WTI was down 5.7 percent for the week, also its biggest decline since July.
“The recovery from the initial sell-off looked more a case of hope rather than reality,” said Halley.
Weak US services sector and jobs growth data on Thursday added to worries about global oil demand and exacerbated fears that a protracted US-China trade war could push the global economy into a recession.
“Concerns about global oil demand are rising, and next week’s US-China trade talks, the significant X factor, will be particularly important, given the sharp drop in the oil price over the last week,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, also said on Thursday the world’s top crude oil exporter has fully restored oil output after attacks on its facilities last month knocked out more than 5 percent of global oil supply.
“The mood wasn’t helped by news that Saudi Arabia has managed a speedy recovery from the recent attacks,” ANZ Bank said in a note on Friday.
Recent data showing a slowdown in US shale output and drilling activity, however, could lend some support.
“Continued falls in drilling activity has seen monthly growth in US shale oil output fall, from 150 thousand barrels per day (kbpd) to only 50 kbpd,” said ANZ.
“This is likely to linger well into 2020.”


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.