Archives for April 2017

Iran ramps up oil output as OPEC production falls

According to data the single countries report to the Joint Organizations Data Initiative (JODI), Saudi Arabia’s crude oil exports in February stood at 6.957 million barrels per day, the lowest volumes shipped in a month since May 2015 when exports were 6.935 million bpd.

Since May 2015, Saudi exports were below 7 million bpd only in August 2015 and in February this year, data by JODI show.

By comparison, Saudi exports in January this year—when the OPEC deal took effect—were 7.713 million bpd.

In the two months leading to the start of the output cuts, the Kingdom’s exports exceeded 8 million bpd, at 8.258 million bpd in November, and at 8.014 million bpd in December.

OPEC’s №2 producer goes rogue, plans 600,000 bpd oil output increase

Saudi oil production in February was 10.011 million bpd, and that’s the same figure the Saudis had reported to OPEC for their production that month.

Saudi refinery intake jumped to 2.673 million bpd in February from 2.127 million bpd in January, to a record high since JODI started publishing data in January 2002.

The high refinery intake in February was not only the result of the lower exports.

According to the Saudi Press Agency, Saudi Aramco planned to shut its 126,000-bpd crude oil refinery in Riyadh for planned maintenance for 80 days beginning on March 1.

“It seems that Aramco is preparing for the long shutdown of the Riyadh refinery by increasing production from other refineries as they need to keep some products in stocks while the refinery is closed,” independent analyst Mohamed Ramady told Bloomberg from London.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/385363-saudi-february-crude-oil-exports/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Following the Western penalties imposed on Russian companies in 2014 and subsequent countersanctions introduced by Moscow in response, some local officials took the opportunity to boost the development of domestic production. Many Russian enterprises managed to encourage import substitution and made exports more competitive.

Russia strengthens position on global food market

Despite doubts expressed by traders and economists, that optimism has turned out to be justified on at least one economic front – agriculture and related sectors.

Last year, Russia managed to gain the world’s lead as an exporter of grain, after shipping 34 million tons out of its record crop of 119 million tons.

Apart from grain, Russian farmers have completely substituted imports of chicken and pork with domestic production. The country became a top producer of sugar beet with greenhouse vegetable output increasing 30 percent over the previous year.

Agricultural goods have become Russia’s second biggest export after oil and gas.

Besides increased government subsidies to farmers, the sector has also benefited from Russia’s geographical position with highly fertile “black earth” regions in central and southern Russia located close to export terminals on the Black Sea. The trade routes allow the country to supply significant North African and Middle Eastern wheat importers such as Turkey and Egypt.

Russian agriculture and associated industries have huge potential for further growth as increased earnings allow farmers to invest in technology and more fertilizers to boost productivity.

“Russia’s agriculture boom shows that, despite sanctions and the poor state of east-west relations, there are pockets of value and opportunity to be found in the Russian market,” reports the Financial Times.

Article source: https://www.rt.com/business/385285-russia-agriculture-flourishes-sanctions/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Gold price soars to 5-mth high on geopolitical unrest

The precious metal approached $1,300 per troy ounce on Tuesday before retreating to $1,283 on Wednesday.

Intesa analyst Daniela Corsini told Bloomberg prices could fall in mid-year as the US Federal Reserve hikes interest rates, but they are likely to bounce back, reaching $1,350 an ounce at year-end.

“Markets will surely remain nervous about this uncertainty. And if economic data in the US remains strong, then gold will regain its role as an inflation hedge,” she told the media.

India, the world’s second-biggest gold market, has recovered from the government’s ban on larger banknotes, and the demand will grow there, Corsini predicted.

In India, the “impact of the demonetization scheme has run its course, and we had very strong imports in February and March,” she said.

Corsini added that in Europe traders will use gold as a safe haven ahead of elections in France, Germany, and the UK.

Investors are also worried about geopolitical tension in Syria, Afghanistan, and Turkey as well as US relations with Russia and China.

“Short-term risk is skewed to the downside, but underlying support is there with the focus on political uncertainties. We see the yen continuing to strengthen, and a strong yen and strong gold have gone hand-in-hand since November,” Saxo Bank’s head of commodity strategy Ole Hansen said on Wednesday.

“Also expectations about the dollar are up for revision, the strong dollar story is fading. [US President Donald] Trump is talking it down, and we’re seeing weakness creep into US data, changing the perception of how much rates have to rise,” he added.

Article source: https://www.rt.com/business/385274-gold-price-keeps-climbing/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China’s future megacities to eclipse population of most countries

The authors of the study used an unusual method of using satellites to track and record nighttime lights in China as an indicator of the state of the world’s second-largest economy.

According to the research, the Chinese economy is performing better than official data indicates.

“We see that our methodology predicts Chinese GDP growth to have been lower than official estimates before the crisis of 2008, to have experienced a shallower decline in 2008 and a stronger recovery in 2009 and 2010, and to have stabilized at a higher level after 2011,” the economists say.

The paper says that across the 11-year period under consideration predicted Chinese growth appears to be on a flat trend, while the official growth estimates are on a declining trend.

The predictions disclosed by the analysts for past Chinese growth agree, at least in spirit, with some market participants’ estimates.

“For example, our index agrees with both the Barclays and the Bloomberg indices in estimating Chinese growth to have been around eleven percent in 2007, and not to have experienced a substantial spike before the financial crisis, while the official GDP series records growth as spiking from 12 to 15 percent between 2005 and 2007. However, our predictions for current Chinese growth rates are above those of market participants, as well as of the Chinese government itself,” the report says.

The economists, New York Fed’s Hunter Clark and Maxim Pinkovskiy, as well as Columbia’s Xavier Sala-i-Martin, do not reveal why Chinese officials understate the economic performance.

“One explanation consistent with our results could be if Chinese national accounts understate the growth rate of services, which would progressively understate growth as services become a larger fraction of the Chinese economy,” they say.

Data on nighttime lights is maintained by the National Oceanic and Atmospheric Administration and is publicly available. Some other studies of the kind show the difference between North and South Korea, a sample of African villages and the economic fluctuations during the Asian financial crisis.

The agency says lights are highly correlated with measures of economic activity regarding levels as well as growth rates.

Article source: https://www.rt.com/business/385176-china-night-time-lights-economy/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Fitch no longer thinks Trump poses threat to global economy

The billionaire investor, hired by President Trump as commerce secretary to curb the $500 billion trade deficit inherited from Barack Obama’s administration, has accused US trade partners of protectionism in an interview with The Financial Times.

“The response is very simple: we are the least protectionist of the major areas. We are far less protectionist than Europe. We are far less protectionist than Japan. We are far less protectionist than China,” Ross told the newspaper.

“We also have trade deficits with all three of those places. So they talk free trade. But in fact what they practice is protectionism. And every time we do anything to defend ourselves, even against the puny obligations that they have, they call that protectionism. It’s rubbish,” he added.

Last week, Christine Lagarde said global economic growth has sped up, but “protectionism is clearly a threat,” she warned. The IMF chief did not single out any country.

According to Ross, Lagarde and others are trying to protect the system that let others enjoy trade surpluses, covered by the US deficit.

“We like it that way. So we don’t want you to disrupt it. That’s what they are really saying when you strip it away,” Ross said.

“That’s the bottom line. But that’s not going to happen. Our tolerance for continuing to be the deficit that eats the surpluses of the whole rest of the world — the president is not tolerant of that anymore,” he added.

Donald Trump took the Oval Office pledging to reduce the trade deficit, create jobs in the US and return manufacturing to the country.

Article source: https://www.rt.com/business/385041-us-protectionism-imf-rubbish/?utm_source=rss&utm_medium=rss&utm_campaign=RSS