EU-UK trade talks go on remotely

EU-UK trade talks go on remotely
Construction work continues at the site of a lorry park being built between the villages of Sevington and Mersham, near the M20 motorway near Ashford in Kent, south east England on November 23, 2020, which will have the capacity to hold nearly 10,000 vehicles in the event of a no-deal Brexit. (AFP)
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Updated 24 November 2020

EU-UK trade talks go on remotely

EU-UK trade talks go on remotely
  • ‘The differences on the level playing field and fisheries remain major,’ sources say

BRUSSELS: British and EU negotiators on Monday resumed talks on their post-Brexit relationship via video-conferencing, with the focus still squarely on dividing up fishing quotas and ensuring fair competition for companies, including on state aid.

Face-to-face talks, suspended last week after a member of the EU delegation tested positive for the coronavirus, will resume in London “when it is safe to do so,” said a source who follows Brexit.

Another source, an EU official, added: “The differences on the level playing field and fisheries remain major.”

These issues are the key obstacles to clinching a new deal to maintain free, frictionless trade between the estranged allies after Britain’s standstill transition out of the EU following Brexit completes at the end of this year.

British newspaper The Sun reported at the weekend that the negotiators were looking at a review clause that would allow a renegotiation of any new fishing arrangement from 2021 in several years’ time.

An EU diplomat, a third source who spoke under condition of anonymity, confirmed that such an idea was under discussion, but added that the bloc insisted on linking it to the overall trade agreement, meaning fishing rights could only be renegotiated together with the rest of trade rules.

“We need to uphold the link between fishing and trade rules, this comes in a package,” said the person.

The EU official stressed that annual renegotiation of fishing quotas was still a no-go for the 27-nation bloc. Fisheries are a particularly sensitive issue for France.

Thierry Breton, the French representative on the European Commission, the EU executive, said last week: “We shouldn’t have in the Brexit deal revision clauses in one or two years, when everything would change again ... We won’t let that happen. We need to give our entrepreneurs predictability.” 


WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range
Updated 22 min 11 sec ago

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

Oil prices have been stable since early January, with Brent crude price hovering around $55. Brent crude closed the week slightly higher at $55.41 per barrel,
while West Texas Intermediate (WTI) closed slightly lower at $52.27 per barrel.

Oil price movement since early January in a narrow range above $50 is healthy, despite pessimism over an increase in oil demand, while expectations of US President Joe Biden taking steps to revive energy demand growth are
still doubtful. The US Energy Information Administration (EIA) reported a hike in US refining utilization to its highest since March 2020, at 82.5 percent. The EIA reported a surprise weekly surge in US commercial crude stocks by 4.4
million barrels. Oil prices remained steady despite the bearish messages sent from the International Energy Agency (IEA), which believes it will take more time for oil demand to recover fully as renewed lockdowns in several countries weighed on oil demand recovery.

The IEA’s January Oil Market Report came as the most pessimistic monthly report among other market bulletins from the Organization of the Petroleum Exporting Countries (OPEC) and EIA. It forecast oil demand will bounce back to 96.6 million bpd this year, an increase of 5.5 million bpd over 2020 levels.

Though the IEA has lowered its forecast for global oil demand in 2021 due to lockdowns and vaccination challenges, it still expects a sharp rebound in oil consumption in the second half of 2021,
and the continuation of global inventory depletion.

The IEA reported global oil stocks fell by 2.58 million bpd in the fourth quarter of 2020 after preliminary data showed hefty drawdowns toward the end of the year. The IEA reported OECD industry stocks fell for a fourth consecutive month at 166.7
million barrels above the last five-year average. It forecast that global refinery throughput is expected to rebound by 4.5 million bpd in 2021, after a 7.3 million bpd drop in 2020.

The IEA monthly report has led to some short term concern about weakness in the physical crude spot market, and the IEA has acknowledged OPEC’s firm role in stabilizing the market.

Controversially, the IEA believes that a big chunk of shale oil production is profitable at current prices, and hence insinuated that shale oil might threaten OPEC market share.

It also believes that US shale oil producers have quickly responded to oil price gains, winning market share over OPEC producers. However, even if US shale oil drillers added more oil rigs for almost three months in a row, the number of operating rigs is still less than half that of a year ago, at 289 rigs.

The latest figures from the Commodity Futures Trading Commission show that crude futures “long positions” on the New York Mercantile Exchange are at 668,078 contracts, down by 18,414 contracts from the previous week (at 1,000 barrels for each contract).