Oil rises to near six-week high despite OPEC trimming its demand forecast: Market wrap

Oil rises to near six-week high despite OPEC trimming its demand forecast: Market wrap
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Updated 13 September 2021

Oil rises to near six-week high despite OPEC trimming its demand forecast: Market wrap

Oil rises to near six-week high despite OPEC trimming its demand forecast: Market wrap
  • Oil demand is expected to average 99.70 million barrels per day in the fourth quarter of 2021

RIYADH: Oil prices rose to near six-week highs on Monday as US output remains slow to return two weeks after Hurricane Ida slammed into the Gulf Coast and worries another storm could affect output in Texas this week.
Those gains came even though the Organization of the Petroleum Exporting Countries trimmed its world oil demand forecast for the last quarter of 2021 due to the delta coronavirus variant.

Oil demand is expected to average 99.70 million barrels per day in the fourth quarter of 2021, down 110,000 bpd from last month’s forecast, OPEC said in its monthly report.

OPEC said a further recovery would be delayed until next year when consumption will exceed pre-pandemic rates.
Brent futures rose 53 cents, or 0.7 percent, to $73.45 a barrel by 11:30 a.m. EDT (1530 GMT), while US West Texas Intermediate crude rose 71 cents, or 1 percent, to $70.43.
That puts Brent on track for its highest close since Aug. 3 and WTI on track for its highest close since July 30.

In addition to the OPEC forecast, other bearish factors also held back oil price gains on Monday, including persistent worries about coronavirus on global crude demand, potential supply increases from planned releases of oil from strategic reserves in the US and China.
A city in China’s southeastern province of Fujian has closed cinemas and gyms, sealed off some entries and exits to highways and told residents not to leave town as it battles a local COVID-19 outbreak.
Traders noted China’s planned release of oil from strategic reserves could boost supplies available in the world’s the second biggest oil consumer.
The US government agreed to sell crude oil from the nation’s emergency reserve to eight companies including Exxon Mobil, Chevron and Valero, under a scheduled auction to raise money for the federal budget.

 

 


Spain plans to ask to exit EU common electricity price policy

Spain plans to ask to exit EU common electricity price policy
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Updated 7 sec ago

Spain plans to ask to exit EU common electricity price policy

Spain plans to ask to exit EU common electricity price policy
  • Facing spiralling electricity prices, partly triggered by more expensive natural gas

The Spanish government plans to ask the European Union for permission to exit the common electricity price policy and establish its own pricing mechanism, El Pais newspaper reported on Tuesday, citing an internal government document.


The document has been shared in Spain, hours before EU energy ministers are due to meet in Luxembourg to discuss electricity prices, the newspaper said.


Facing spiralling electricity prices, partly triggered by more expensive natural gas, the Spanish government has passed tax breaks, a claw-back of electricity utilities' profits and pushed for EU-wide measures such as joint natural gas purchases.

Earlier, Spain's Secretary of State for Energy said the EU electricity market must be reformed and EU countries should have the option to buy gas collectively, among other measures to tackle record-high power prices.

EU commissioner Thierry Breton said on a French radio station on Tuesday that he was not sure joint purchases as suggested by Spain would be effective, and was echoed by Luxembourg's energy minister Claude Turmes who said the proposal for EU countries to jointly buy gas would not offer a solution to the recent spike in energy prices.

Separately, French Finance Minister Bruno Le Maire told a Paris conference on Tuesday that the European energy market needs reforming, as European countries battle with rising energy prices.


Divisions have deepened among European Union countries ahead of an emergency meeting of ministers on Tuesday on their response to a spike in energy prices, with some countries seeking a regulatory overhaul and others firmly opposed.


Countries are struggling to agree, however, on a longer term plan to cushion against fossil-fuel price swings, which Spain, France, the Czech Republic and Greece say warrant a bigger shake-up of the way EU energy markets work.

 

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Khaldoon Khalifa Al Mubarak, CEO and managing director of the Mubadala Investment Company, believes the way the private and public sectors worked together to combat the pandemic shows cooperation on global issues is possible.

Speaking at the Future Investment Initiative Forum in Riyadh, he said: “We had a pandemic that started in January 2020 and within 12 months through PPP (public private partnerships) a global solution went to actual production. 

“That is a blueprint to show availability to deliver.”

Referring to his own company’s actions, Mubarak said Mubadala has invested more than $2 billion over the last 16 years in renewable energy across 13 countries.


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Speaking at the Future Investment Initiative Forum in Riyadh, Larry Fink, Chairman and CEO of US-based firm BlackRock, called on world leaders to show more foresight when it comes to solving issues facing humanity.

"Capital is abundant and needs to be put in work,” he said, adding: "We have to re-imagine how to bring finance forward to effectuate the change of climate change risks.

“We do not have that platform in the world. We don't have long-term planning by most governments to effectuate these long-term problems."


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UK's Heathrow Airport flags tepid travel recovery until 2026

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UK's Heathrow Airport flags tepid travel recovery until 2026

UK's Heathrow Airport flags tepid travel recovery until 2026
  • Heathrow, which last year lost its crown as Europe's busiest hub to Paris, has suffered heavy losses during the pandemic

Britain's Heathrow Airport said it was still reporting losses and does not expect air traffic to recover completely until at least 2026 even as the travel industry gathered steam in the third quarter on easing restrictions.


The London airport said passenger numbers in the third quarter recovered to 28 percent and cargo to 90 percent of pre-pandemic levels, although it has lost 3.4 billion pounds ($4.68 billion) cumulatively since the start of the pandemic.


Heathrow, which last year lost its crown as Europe's busiest hub to Paris, has suffered heavy losses during the pandemic and has since tried to claw back gains by raising its charges to airlines.


Last week, the UK aviation regulator said Heathrow will not be permitted to raise passenger charges by as much as it had wanted, but airlines opposed the scale of the hike as the hub and carriers battle to recoup pandemic losses.


"The CAA's (Civil Aviation Authority's) Initial Proposals do not go far enough to ensure that investors can achieve a fair return," Heathrow said in a statement on Tuesday.


The airport, which is owned by Spain's Ferrovial, the Qatar Investment Authority and China Investment Corp among others, said its shareholders have achieved negative returns in real-term over the last 15 years.


Heathrow, Britain's biggest airport, said it had 4.1 billion pounds of cash to be able to come through until the market recovers.