Oil extends loss on India COVID-19 cases, US pipeline restart

Oil extends loss on India COVID-19 cases, US pipeline restart
Palestinian children sleep in a UN school in Gaza City. Oil traders are monitoring the latest clashes. (AFP)
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Updated 14 May 2021

Oil extends loss on India COVID-19 cases, US pipeline restart

Oil extends loss on India COVID-19 cases, US pipeline restart
  • Raising rates typically boosts the US dollar, which in turn pressures oil prices because it makes crude more expensive for holders of other currencies

SINGAPORE: Oil prices fell on Friday after dropping about 3 percent a day earlier as coronavirus cases remained high in major oil consumer India and as a key fuel pipeline in the United States resumed operations after being shut due to a cyberattack.
Brent crude oil futures were down 10 cents, or 0.2 percent, at $66.95 a barrel by 0518 GMT, while West Texas Intermediate (WTI) was down three cents, or 0.1 percent, at $63.79 a barrel. Both prices are heading for their first weekly loss in three weeks.
“The commodity super cycle rally just hit a hard stop and the energy market doesn’t know what to make of Wall Street’s fixation over inflation and the slow flattening of the curve in India,” said Edward Moya, senior market analyst at OANDA. India is the world’s third biggest oil consumer.
“The crude demand story is still upbeat for the second half of the year and that should prevent any significant dips in oil prices,” he added.
Prices came under pressure as a broader surge in commodity prices and stronger-than-expected US consumer prices data this week stoked inflation concerns that could force the Federal Reserve to raise interest rates.
Raising rates typically boosts the US dollar, which in turn pressures oil prices because it makes crude more expensive for holders of other currencies.
India on Friday reported 343,144 new coronavirus cases over the past 24 hours, taking its overall caseload past the 24 million mark, while deaths from COVID-19 rose by 4,000.
In the United States, President Joe Biden reassured motorists that fuel supplies should start returning to normal this weekend, even as more filling stations ran out of gasoline across the Southeast nearly a week after a cyberattack on the nation’s top fuel pipeline.
Colonial Pipeline said late on Thursday it had restarted its entire pipeline system and had begun deliveries in all of its markets.
Traders were also watching the situation in the Middle East after Israel fired artillery and mounted more air strikes on Friday against Palestinian militants in the Gaza Strip amid constant rocket fire deep into Israel’s commercial center.


Arab economies jostle for position in $200 billion green hydrogen race

Arab economies jostle for position in $200 billion green hydrogen race
Updated 23 min 33 sec ago

Arab economies jostle for position in $200 billion green hydrogen race

Arab economies jostle for position in $200 billion green hydrogen race
  • The region has the potential to be one of the most competitive globally for green hydrogen production thanks to its abundant wind and solar resources

RIYADH: Another week, another huge green hydrogen project announcement in the Middle East. This time, it was Egypt’s turn. The most populous Arab nation is planning to invest up to $4 billion in a project to create hydrogen through electrolysis powered by renewable energy, Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker said on June 14.
The disclosure follows a flurry of announcements last month, including Oman’s plan for the biggest green hydrogen plant in the world, to be built over the coming 27 years along with 25 GW of solar and wind power.
Also in May, Dubai launched the region’s first industrial scale solar-powered green hydrogen plant, a demonstration facility built by Siemens Energy and Dubai Electricity and Water Authority (DEWA).
Later in the month, Abu Dhabi got in on the act as it revealed plans for a $1 billion facility with capacity to produce 200,000 tons of green ammonia from 40,000 tons of green hydrogen (hydrogen is turned into ammonia for long-distance transport before being transformed back for use).
As for Saudi Arabia, it unveiled plans in July last year for a green hydrogen facility powered by 4 GW of wind and solar, the world’s largest such project at the time. The $5 billion plant will be built by Air Products, ACWA Power and Neom and will be capable of producing 650 tons of green hydrogen a day, enough to run about 20,000 hydrogen-fueled buses.
“The Middle East has joined the green hydrogen wave with mega project announcements,” said Flor Lucia De la Cruz, a senior research analyst for hydrogen and emerging technologies at Wood Mackenzie. “The Middle East has now positioned itself to become a key player in the green hydrogen economy leveraging its solar and wind capabilities and strategic position in between the European and Asian markets.”
The region has the potential to be one of the most competitive globally for green hydrogen production thanks to its abundant wind and solar resources, industrial infrastructure and its location as an export hub, Dii Desert Energy and Roland Berger said in a report on the industry this month.
The Gulf alone could create a $200 billion green hydrogen industry by 2050, generating up to one million jobs, the report said as it predicted a long-term renewable energy deployment of up to 1,000 GW, 500 GW of electrolyzer capacity producing 100 million megatons of hydrogen.
“The GCC region is on the verge of a new era similar to the discovery of oil decades ago,” Vatche Kourkejian, a partner at Roland Berger, wrote in the report. Green hydrogen could allow the Gulf to continue being the main energy supplier to the world in a sustainable manner, he said.
The majority of the world’s hydrogen today (about 95 percent) is considered brown or gray, in that it is produced by steam reforming of natural gas, partial oxidation of methane or coal gasification. While the end product is a clean fuel, the production process uses huge amounts of energy and creates significant amounts of carbon dioxide.
So-called blue hydrogen uses the same process as gray hydrogen, but captures the carbon. Green hydrogen creates the gas through splitting water into oxygen and hydrogen via electrolysis and powering the process with renewable energy, leaving no dirty byproducts.
As well as allowing for the storage of intermittent wind and solar power, hydrogen can also be used to heat homes and cook as a replacement for natural gas, power vehicles, including planes and ships as well as cars, trucks and trains, and be used in industry to reduce the environmental impact of making metals, chemicals and refining oil.
However, the Middle East is not the only region looking to green hydrogen for future industrial development.
So far, 17 countries, (including Japan, South Korea, Canada and UK) have announced a hydrogen roadmap, strategy or vision, according to Wood Mackenzie.
Last year, the EU’s Green Recovery Package earmarked €150 billion ($178 billion) for green hydrogen, including targets for 6 GW of electrolyzer capacity in the first phase between 2020 and 2024, with 40 GW to be installed by the end of the second phase in 2030.
“The last year has seen a decisive pivot toward decarbonization globally, which is extremely positive for zero-carbon technologies,” said Ben Gallagher, lead analyst, emerging technologies at Wood Mackenzie. “Green hydrogen is a key beneficiary, with this pivot pushing it to the fore ahead of other methods for producing the gas. In fact, electrolysis-based low-carbon production now makes up 67 percent of the overall pipeline for hydrogen.”
 


British retail sales fell in May on easing lockdown curbs

British retail sales fell in May on easing lockdown curbs
Britain’s business lobby predicted on Friday that the economy is on course to reach its pre-COVID level by the end of 2021. (AFP)
Updated 19 June 2021

British retail sales fell in May on easing lockdown curbs

British retail sales fell in May on easing lockdown curbs
  • Sales by volume declined 1.4 percent in May after a 9.2-percent bounce in April

LONDON: British retail sales fell last month on easing lockdown curbs, as people dined at bars and restaurants instead of buying food at supermarkets, data showed Friday.

Sales by volume declined 1.4 percent in May after a 9.2-percent bounce in April, the Office for National Statistics said.
Food stores were the hardest hit, with sales sinking 5.7 percent as Britons took advantage of reopening hospitality.
Under the phased reopening of Britain’s battered economy, bars and restaurants restarted outdoor dining in April and indoor services in May.
“Instead of eating every meal at home as we all did during lockdowns, we were able to dine outside at cafes or restaurants,” said Capital Economics analyst Paul Dales.
“Spending just shifted from the shops to social activities,” he said, but warned however that “soft retail sales data could mean May was not as strong for the economy as we had thought.”
Overall UK retail sales in April and May were nevertheless 9.1 percent higher than the pre-pandemic level in February 2020.
The UK also reopened nonessential retail in April, allowing the broader British economy to recover further from pandemic fallout on the rapid vaccines rollout.
The economy is now expected to fully reopen on July 19, after the government this week delayed the date by four weeks due to surging Delta infections.
Britain’s business lobby predicted Friday that the economy is on course to reach its pre-COVID level by the end of 2021.
The Confederation of British Industry, the nation’s biggest employers’ organization, now expects the economy to surge 8.2 percent this year and 6.1 percent in 2022. The COVID-ravaged economy had collapsed by almost ten percent last year in Britain’s biggest slump in three centuries — and the worst performance among the G7.

SPEEDREAD

The economy is now expected to fully reopen on July 19, after the government this week delayed the date by four weeks due to surging Delta infections.

Stubborn Brexit worries also fester after Britain formally exited the EU single market at the start of 2021.
Industry data showed Friday that UK food and drink exports to the bloc almost halved in the first quarter as a result of both Brexit and pandemic fallout.
The Food and Drink Federation (FDF) said EU sales slumped 47 percent from the same period a year earlier.
Exports to the EU fell by £2.0 billion ($2.8 billion) compared with the first quarter of 2019, before the pandemic struck.
The industry body blamed “the ongoing impacts of COVID-19 and changes in the UK’s trading relationships” after Brexit.
Non-EU sales accounted for 55 percent of all UK food and drink exports in the first quarter, it added.
“The loss of £2 billion of exports to the EU is a disaster for our industry,” said Dominic Goudie, head of international trade at the federation.
The news “is a very clear indication of the scale of losses that UK manufacturers face in the longer-term due to new trade barriers with the EU,” he added.


Italy reimposes quarantine on arrivals from Britain

Italy reimposes quarantine on arrivals from Britain
Passengers undergo a rapid antigen swab test for COVID-19 at Malpensa Airport in Milan. (AFP)
Updated 19 June 2021

Italy reimposes quarantine on arrivals from Britain

Italy reimposes quarantine on arrivals from Britain
  • Currently those arriving from the US, Japan and Canada must show a negative coronavirus test and quarantine for 10 days on arrival unless they come on one of a limited number of “COVID-free” flights

ROME: Italy will reintroduce a five-day quarantine on arrivals from Britain while easing rules for other countries, Health Minister Roberto Speranza announced on Friday.
Britain on Thursday recorded 11,007 new daily coronavirus cases, with the emergence of the Delta variant pushing the figure above 10,000 for the first time since late February.
“I have signed a new order that ... introduces a five-day quarantine with a requirement to take a test for those coming from Britain,” Speranza wrote on Facebook.
A Health Ministry spokesman said the order would come into force on Monday. It also extends an existing ban on arrivals from India, Bangladesh and Sri Lanka.

BACKGROUND

Britain on Thursday recorded 11,007 new daily coronavirus cases, with the emergence of the Delta variant pushing the figure above 10,000 for the first time since late February.

Speranza said it would also allow entry for those arriving from the EU, the US, Canada and Japan who meet the requirements of the so-called Green Certificate issued by the EU.
That digital COVID certificate, which comes into force on July 1, will demonstrate whether a bearer has been vaccinated against COVID-19, has been recently tested or has acquired immunity from previously contracting the disease and recovering.
Currently those arriving from the US, Japan and Canada must show a negative coronavirus test and quarantine for 10 days on arrival unless they come on one of a limited number of “COVID-free” flights.
Italy has been one of the European countries hardest hit by the coronavirus pandemic, but infection rates have fallen sharply in recent weeks and restrictions in much of the country have been lifted.


Sterling set for worst week since Sept. 2020

Sterling set for worst week since Sept. 2020
Updated 19 June 2021

Sterling set for worst week since Sept. 2020

Sterling set for worst week since Sept. 2020

LONDON: Sterling extended its fall against the US dollar on Friday, dropping below $1.39, hurt by the US Federal Reserve’s hawkish surprise and an unexpected fall in Britain’s retail sales.
The pound dropped against a strengthening dollar on Thursday after the Fed surprised markets by signaling it would raise interest rates and end emergency bond-buying sooner than expected.
On Friday, it fell further against both the dollar and the euro. It was down 0.3 percent on the day at $1.389, having touched as low as $1.38555 — its weakest since May 4. It was on track for its worst week since September 2020.
Versus the euro, it was down around 0.3 percent at 85.78 pence per euro, on track for a small weekly fall.
“GBPUSD remains bogged down below the 1.39 handle by a confluence of broad USD strength and a slight deterioration in near-term data,” said Simon Harvey, senior FX market analyst at Monex Europe.
“The limited impact of the data on sterling is largely because retail sales volumes remain above pre-pandemic levels and a shift in consumption patterns toward services after the May 17th reopening was always likely.”
For cable, market participants are weighing up the Bank of England and the Fed’s relative pace of possible monetary policy tightening. The BoE next meets on June 24.
BofA strategists said in a note to clients that it changed its view on the central bank’s tightening trajectory.
and now expects a 15 basis point rate hike in May 2022, compared to previously expecting no hikes in 2022.
“Brussels’ patience with London’s having its cake and eating it is wearing thin. Indeed, there is a risk of protocols being triggered and tariffs being threatened more seriously,” wrote ING strategists in a note to clients.
“The next few weeks could thus be a vulnerable period for Cable, where a break of 1.3890 opens up 1.3800/3810 — the last stop before an extension to the March/April lows of 1.3675.”


Digital nomads flee virus-hit Manila for shattered tourist towns

Digital nomads flee virus-hit Manila for shattered tourist towns
Tanya Mariano sitting at the porch of her hotel in San Juan town, Philippines. (AFP)
Updated 19 June 2021

Digital nomads flee virus-hit Manila for shattered tourist towns

Digital nomads flee virus-hit Manila for shattered tourist towns
  • The impact of COVID-19 travel restrictions on the sector has been dramatic: $37 billion slashed from the economy and the loss of over two million jobs, according to World Travel and Tourism Council data

SAN JUAN: After months cooped up in coronavirus-hit Manila, Tanya Mariano fled the Philippine capital to work from the beach, joining a growing number of digital nomads helping a devastated tourism industry stay afloat.
A ban on foreign holidaymakers entering the archipelago nation and domestic travel curbs since the pandemic began last year have forced many operators to close and wiped out millions of jobs.
Many digital workers in congested Manila, fearing COVID-19 and fed up with lockdowns and restrictions, are escaping to largely deserted nature hotspots to do their jobs — injecting much-needed money into communities dependent on outside visitors.
Sitting with her laptop on the balcony of the ocean-view apartment she rents in San Juan, a surf town several hours north of her home, Mariano says the move has been a “big quality of life improvement.”
“Being close to the ocean, being close to nature is very calming,” said Mariano, 37, a freelance writer and communications specialist.

HIGHLIGHTS

• The white-sand resort island of Boracay has been turned into a ‘ghost town,’ where most of the rooms are filled with long-term digital nomads from Manila. • Official figures show arrivals to the island fell to less than 335,000 last year, compared with more than 2 million in 2019.

“When I’m in a meeting, usually Zoom or Google Meet, I try not to use the beach as my background — I just show people the wall so they don’t hate me.”
There are no official figures on the number of people working remotely from the country’s picture-postcard beaches and dive spots, but it is certainly a fraction of the millions of tourists that usually flock to its shores.
The impact of COVID-19 travel restrictions on the sector has been dramatic: $37 billion slashed from the economy and the loss of over two million jobs, according to World Travel and Tourism Council data.
Bravo Beach Resort on the southern island of Siargao — a renowned surfing destination — has felt the pain acutely.
Normally packed out with local and international tourists, it now averages around five to 10 guests at any one time — about 10 percent of its capacity — said general manager Dennis Serrano.
With the resort hemorrhaging as much as 200,000 pesos ($4,180) a month, he hopes the situation will be “back to normal” by next year.
Even the white sand resort island of Boracay has been turned into a “ghost town,” according Eugene Flores, manager of the La Banca House boutique hotel, where most of the rooms are filled with long-term digital nomads from Manila.
Official figures show arrivals to the island fell to less than 335,000 last year, compared with more than 2 million in 2019.
“When you go out you can see shops, you can see restaurants, you can see hotels that are really closed. Only a few are open,” Flores said. The glacial pace of the country’s COVID-19 vaccine rollout is likely to delay the full reopening of the country’s beleaguered tourism industry.
For now, digital nomads are a “target market,” said the Department of Tourism, encouraging resorts and hotels to cater to the “new breed” of travelers by offering fast internet and wellness activities.
The influx of mobile workers, whose Manila salaries stretch further in the provinces, is keeping businesses like Papa Bear restaurant in San Juan afloat.
“You are not completely bleeding out, you’re still bleeding out for sure, but you’re at least generating something to offset enough of it,” said owner Denny Antonino.
Digital nomads now make up 30-40 percent of his customers and he hopes the trend continues after the pandemic to even out the seasonal fluctuations.
“They’re able to do their work but in between meetings they can surf, they can go hiking, they can go to the falls — there are more things to do,” said Antonino.