Archives for June 2017

Oil prices sink to 7-mo lows on growing global oversupply

Lingering concerns about an oil glut has dragged Brent crude 16 percent down since the beginning of the year despite supply cuts by OPEC and Russia.

On Friday, US crude futures were trading at $45.21 a barrel at 12:29 GMT, having added more than five percent this week.

Brent was up 0.63 percent at $47.63 per barrel, while US West Texas Intermediate added 0.78 percent to $45.28. The weekly gains were reportedly the highest for both contracts since the week ending May 19.

Last week crude prices hit a 10-month low as rising production activity boosted concerns about global oversupply.

However, this week’s data revealed a temporary drop in US oil output knocking out the bearish sentiment.

US crude production declined by 100,000 barrels per day to 9.3 million last week, marking the steepest weekly fall since July 2016.

Analysts polled by Reuters lowered the price forecasts, with 2017 average Brent and WTI prices down by more than two dollars since last month.

Brokerages including Goldman Sachs and Societe Generale have also cut their 2017 outlook for oil prices, while funds have been unloading long speculative positions, reducing bets on higher prices.

READ MORE: Saudi reshuffle could completely shake up oil markets

“The market’s calls for further cuts from OPEC continue to be rejected by the oil group. UAE Energy Minister Suhail Al Mazrouei was the latest minister to suggest there are no plans or talks on further curbs. This follows on from comments from Russia that such a topic is not on the table,” said ANZ Banking Group in a note seen by Reuters.

Article source: https://www.rt.com/business/394819-oil-rally-us-output-decline/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“On June, 29 the European Union filed an appeal regarding the panel report,” said the trade body in a short statement.

Earlier this month, a WTO dispute panel ruled the US had dealt with all but one of the instances of illegal subsidies to Boeing. However, the company’s European rival Airbus insists the US keeps offering illegal support.

Boeing becomes latest casualty of EU-US trade spat

The EU appeal is the latest step in the 13-year clash between the two titans of the civil aircraft sector.

In 2012, the WTO found that billions of dollars of federal aid to Boeing were illegal and notified the US to drop the programs.

However, the EU filed a new complaint just a few months later, claiming the administration was not complying with that order.

On June 9, the WTO’s dispute panel agreed the US authorities had not taken “appropriate steps to remove the adverse effects or withdraw the subsidy.”

The trade body said Washington had continued to provide Boeing with illegal support in the form of tax cuts totaling $325 million between 2013 and 2015.

At the same time, the panel rejected most of the EU complaint, saying Brussels could not prove the US subsidies after 2012 were harming the bloc’s interests via lost sales and price cuts.

READ MORE: Boeing received over $5.3 billion in banned US subsidies

Both sides claimed the panel’s June findings as a victory, with the US also planning to appeal the June 9 ruling.

The WTO has also reprimanded the European authorities over billions in illegal subsidies provided to Airbus.

In September, the panel said Brussels hadn’t complied with a 2011 ruling to withdraw several support and subsidy programs for Airbus.

The trade body didn’t give an estimate for the programs, but Boeing claims they amounted to $22 billion worth of illegal support for Airbus development and sales.

Article source: https://www.rt.com/business/394777-eu-appeals-wto-decision-boeing/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

South Korea to seek free trade agreement with UK after Brexit

According to South Korea’s Yonhap News Agency, the business delegation accompanying President Moon Jae-in has said it will pour $12.8 billion into the US economy in the next five years.

The delegation is made up of top executives from 52 South Korean companies such as Samsung, LG, SK, and Doosan.

The investment projects will cover the construction of new production facilities and research centers, as well as mergers and acquisitions. An additional $22.4 billion will be spent on buying aircraft and other American products and resources.

Samsung said it plans to spend $380 million to construct a new home appliance factory in South Carolina and $1.5 billion at its semiconductor plant in Texas.

“As the demand for the products is rising globally, the establishment of a new US production line will not lead to the supply decline from factories of other regions,” Samsung official said.

LG will put $250 million into building a new washing machine plant in Tennessee and $300 million on a new building in New Jersey.

South Korean energy and telecom conglomerate SK said it plans to strengthen business ties and expand investment in the US shale gas business. Together with General Electric, it will work on developing shale gas fields. They will also promote the sale of US LNG and LPG in Asia, South America, and Africa.

Doosan, a major South Korean power equipment conglomerate, also wants to strengthen links and expand its presence in the US market.

The country’s top automaker Hyundai announced a $3.1 billion investment over the next five years into research, including self-driving cars.

South Korea is America’s sixth-largest trading partner with trade worth $112 billion last year. However, the US trade deficit with South Korea has nearly doubled over the past five years, reaching almost $28 billion in 2016.

Article source: https://www.rt.com/business/394559-south-korea-us-gas/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

EU leaders agree to extend Russia sanctions over Ukraine

According to a release published on Wednesday, the “decision follows an update from President Macron and Chancellor Merkel to the European Council of 22-23 June 2017 on the implementation of the Minsk Agreements.”

Russian presidential spokesman Dmitry Peskov said the Kremlin takes the EU’s extension of sanctions “negatively and with sorrow.”

Last week, EU leaders confirmed their decision to keep sanctions in place, with the President of the European Council Donald Tusk tweeting “Agreed. EU will extend economic sanctions against Russia for their lack of implementing the Minsk Agreement.”

The sanctions were first introduced over the crisis in Ukraine and the Crimea reunification in 2014. They include an arms export ban, limited access to finance for Russian banks, and travel bans for over 150 individuals. Many measures, specifically, prohibit financial interactions with Crimea.

In response, the Kremlin imposed an embargo on EU agricultural produce, food and raw materials. Since then the sides have repeatedly broadened and extended the restrictive measures.

Russian President Vladimir Putin said the embargo on certain Western food products was good for Russia’s economy and should last “as long as possible.” He explained the ban is also in consumer interests, with high-quality products at lower prices becoming more available.

Prime Minister Dmitry Medvedev said the measures introduced stimulate domestic production and many Russian companies have been asking the government to keep them.

Article source: https://www.rt.com/business/394411-eu-russia-sanctions-extension/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

EU leaders agree to extend Russia sanctions over Ukraine

According to a release published on Wednesday, the “decision follows an update from President Macron and Chancellor Merkel to the European Council of 22-23 June 2017 on the implementation of the Minsk Agreements.”

Russian presidential spokesman Dmitry Peskov said the Kremlin takes the EU’s extension of sanctions “negatively and with sorrow.”

Last week, EU leaders confirmed their decision to keep sanctions in place, with the President of the European Council Donald Tusk tweeting “Agreed. EU will extend economic sanctions against Russia for their lack of implementing the Minsk Agreement.”

The sanctions were first introduced over the crisis in Ukraine and the Crimea reunification in 2014. They include an arms export ban, limited access to finance for Russian banks, and travel bans for over 150 individuals. Many measures, specifically, prohibit financial interactions with Crimea.

In response, the Kremlin imposed an embargo on EU agricultural produce, food and raw materials. Since then the sides have repeatedly broadened and extended the restrictive measures.

Russian President Vladimir Putin said the embargo on certain Western food products was good for Russia’s economy and should last “as long as possible.” He explained the ban is also in consumer interests, with high-quality products at lower prices becoming more available.

Prime Minister Dmitry Medvedev said the measures introduced stimulate domestic production and many Russian companies have been asking the government to keep them.

Article source: https://www.rt.com/business/394411-eu-russia-sanctions-extension/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Gazprom begins Turkish Stream pipeline construction

Gazprombank is completing the withdrawal from Promak, a company which owns a 60 percent stake in the two importers of Russian gas to Turkey – Enerco and Avrasya, the newspaper writes.

Gazprom Deputy Chairman Aleksandr Medvedev said the company plans to sell another Turkish asset – Bosphorus Gaz.

According to Medvedev, the Turkish market is “unpredictable” and loses appeal due to the weakening of the lira and regulated tariffs. Kommersant’s sources in the industry said Bosphorus lost about €100 million in 2016.

Gazprom owns 71 percent of Bosphorus Gaz. The company will sell its share to the local Sen Group, which owns the remaining 29 percent, the newspaper says.

Leaving the market may strengthen Gazprom’s negotiating position in export prices, as the company will no longer have a direct interest in maintaining the profitability of the sales business within Turkey, experts say. Gazprom has been suing Turkish state corporation Botas and private companies in a price dispute.

However, no final decision to leave the market has been made, the newspaper added.

Last month, Gazprom began constructing the Turkish Stream natural gas pipeline off the Russian Black Sea coast.

The project, with an estimated cost of €11.4 billion ($12.7 billion) was announced in December 2014. However, it was put on hold after the downing of a Russian plane in Syria by a Turkish jet in November 2015.

The pipeline could extend from Turkey to Europe, but Russia needs solid guarantees from Brussels the project will not be scrapped like the South Stream pipeline project, said Foreign Minister Sergey Lavrov last October.

Article source: https://www.rt.com/business/394352-turkey-gazprom-gas-sales/?utm_source=rss&utm_medium=rss&utm_campaign=RSS