WEEKLY ENERGY RECAP: Spot market tightens

Oil prices were relatively steady with Brent crude holding above $63 per barrel near an eight-week high. (Reuters/File)
Updated 23 November 2019

WEEKLY ENERGY RECAP: Spot market tightens

  • US crude inventories rose by 1.8 million barrels despite refinery runs increasing by 519,000 bpd

Oil prices were relatively steady with Brent crude holding above $63 per barrel near an eight-week high and WTI finishing above $57 per barrel.

The physical spot market is getting tighter and strong demand for Arabian Gulf medium sour crude has reflected that trend.

So as yet, there are no signs of any weaker oil demand as had been anticipated.

Both OPEC and the International Energy Agency (IEA) have pointed to a swelling oil glut next year due to booming non-OPEC supplies, especially in the US.

The physical market tells a different story. The scenarios envisaged by both OPEC and the IEA are based around unrealistic outlooks that focus on lower projected oil demand as a likely consequence of the ongoing trade war between the US and China. As a result, the pair have warned about a looming supply glut which could emerge in 2020.

But again, the real physical market tightness suggests otherwise.

US crude inventories rose by 1.8 million barrels despite refinery runs increasing by 519,000 bpd. However, US crude in storage at the Cushing, Oklahoma, delivery hub for WTI fell 2.3 million barrels, which represents the biggest drawdown in three months, as reported by the IEA.

The US oil and gas rig count continued to fall in what was the 13th drop for the past 14 weeks. 

According to Baker Hughes, the US oil rig count is down three from last week to 671, with gas rigs unchanged at 129. US shale oil rigs also continued to drop.

The overall positive demand picture has encouraged money managers to continue to increase their net-long positions in Brent crude oil futures for the 4th consecutive week in a row. That followed nine months of decline.

Brent crude oil futures and options money managers increased their net-long positions by by 543 contracts to 311,304 in the week ending Nov. 19.

However, they cut net long positions in WTI crude oil futures and options by 19,593 contracts to 133,581, over the same period.


Capitalism doing ‘more harm than good’ says global survey

Updated 21 January 2020

Capitalism doing ‘more harm than good’ says global survey

  • The poll contacted over 34,000 people in 28 countries

LONDON: A majority of people around the world believe capitalism in its current form is doing more harm than good, a survey found ahead of this week’s Davos meeting of business and political leaders.

This year was the first time the “Edelman Trust Barometer,” which for two decades has polled tens of thousands of people on their trust in core institutions, sought to understand how capitalism itself was viewed.

The study’s authors said that earlier surveys showing a rising sense of inequality prompted them to ask whether citizens were now starting to have more fundamental doubts about the capitalist-based democracies of the West.

“The answer is yes,” David Bersoff, lead researcher on the study produced by US communications company Edelman. “People are questioning at that level whether what we have today, and the world we live in today, is optimized for their having a good future.”

The poll contacted over 34,000 people in 28 countries, from Western democracies like the US to those based on a different model such as China or Russia, with 56 percent agreeing “capitalism as it exists today does more harm than good in the world.”

The survey was launched in 2000 to explore the theories of political scientist Francis Fukuyama, who after the collapse of communism declared that liberal capitalist democracy had seen off rival ideologies and so represented “the end of history.”

That conclusion has since been challenged by critics who point to everything from the rising influence of China to the spread of autocratic leaders, trade protectionism and worsening inequality in the wake of the 2007/08 global financial crisis.

On a national level, lack of trust in capitalism was highest in Thailand and India on 75 percent and 74 percent respectively, with France close behind on 69 percent. Majorities prevailed in other Asian, European, Gulf, African and Latin American states.

Only in Australia, Canada, the US, South Korea, Hong Kong and Japan did majorities disagree with the assertion capitalism currently did more harm than good.

FASTFACT

75%

The Edelman Trust Barometer survey found lack of trust in capitalism was highest in Thailand and India on 75 percent and 74 percent respectively.

The survey confirmed a by-now familiar set of concerns ranging from worries about the pace of technological progress and job insecurity, to distrust of the media and a sense that national governments were not up to the challenges of the day.

Within the data there were divergences, with Asians more optimistic about their economic prospects than others across the world. There was also a growing split in attitudes according to status, with the affluent and college-educated much more likely to have faith in how things were being run.

Of possible interest to corporate leaders gathering in Davos this week was the finding that trust in business outweighed that in governments and that 92 percent of employees said CEOs should speak out on the social and ethical issues of the day.

“Business has leapt into the void left by populist and partisan government,” said Edelman CEO Richard Edelman. “It can no longer be business as usual, with an exclusive focus on shareholder returns.”