Archives for December 2020

The cryptocurrency, which later dropped back to trade below $28,000, is set for its biggest monthly gain since May 2019.

Analysts say that institutional investors, such as Paul Tudor Jones and Stanley Druckenmiller, have been driving bitcoin’s record run. Big investors added $11.5 billion in bitcoins over the previous three months.

“While a growing institutional presence has been part of the narrative of the current bull run, we may see increased retail interest in bitcoin as a form of digital gold,” Paolo Ardoino, chief technology officer of crypto exchange Bitfinex, told Bloomberg.

Also on rt.com Bitcoin should be worth $400,000 based on its scarcity – Guggenheim CIO

Meanwhile, regulatory concerns remain a wider factor for crypto investors. The Securities and Exchange Commission this month accused Ripple Labs and its top executives of misleading investors in affiliated token XRP. While Ripple plans to challenge the accusation in the courts, the development underscores the prospect of stricter oversight of digital assets.

XRP has plummeted over 70 percent this month and faces further pressure, with Coinbase becoming the latest exchange to announce suspension of trading in the token.

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Ripple’s XRP, the fourth-biggest token by market capitalization, was down 13 percent on the day, sitting at just above $0.20 as of Wednesday morning. It has lost over 43 percent of its value over the past week and is down more than 70 percent against its last month’s high of around $0.70.

The latest drop came shortly after US-based platform Coinbase made the decision to suspend XRP trading pairs from its marketplace “in light” of US Securities and Exchange Commission’s (SEC) lawsuit against XRP’s creator, Ripple. Trading will be fully halted on January 19.

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Coinbase’s announcement came just days after similar decisions by other cryptocurrency exchanges. Bitstamp said last week it would remove the option for XRP trading and deposits for all US customers on January 8, while OKCoin’s delisting of the cryptocurrency comes into effect on January 4. Such firms as B2C2, OSL, Crosstower, and Beaxy similarly decided to halt XRP trading.

“This is obviously bad for XRP across multiple dimensions: fewer potential buyers, and lower overall liquidity. For XRP to work as Ripple intends, XRP needs to be very liquid, so this is particularly harmful,” Kyle Samani, co-founder of Multicoin Capital, was quoted as saying by Bloomberg.  

Apple co-founder Steve Wozniak’s сryptocurrency skyrockets 1400%

As most of its digital peers, XRP enjoyed one of its biggest rallies in years in recent months as global investors started piling into cryptocurrencies. However, most of this year’s gains were erased when the SEC filed a lawsuit against Ripple and two of its executives. In a complaint unveiled earlier this month, the regulator said that Ripple had sold more than $1.3 billion in unregistered tokens since 2013. The SEC insists that XRP is actually a security and thus should have been registered with the commission. 

Ripple, which had been anticipating a sweeping lawsuit from the SEC before the official announcement, called the SEC’s allegations “an attack on the entire crypto industry” in the US. It noted that the regulator just “needlessly muddied the waters” and hurt countless innocent XRP retail holders instead of introducing regulatory clarity for crypto. 

“The SEC has introduced more uncertainty into the market, actively harming the community they’re supposed to protect. It’s no surprise that some market participants are reacting conservatively as a result,” Ripple said in statement, adding that it will continue to work with the SEC’s new leadership once appointed.

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The Covid-19 pandemic had a sharp impact on oil prices, creating considerable uncertainty over the outlook for energy demand around the globe. The ongoing global crude oil supply glut and claims that peak oil demand could occur sooner than anticipated are also weighing on energy prices. Those headwinds have done little to impede Brazil’s massive oil boom.

Growing demand for lighter sweeter crude oil grades from Asia, coupled with stronger than expected domestic demand for gasoline are buoying Brazil’s oil industry. China’s insatiable demand for lighter sweeter crude oil grades, sparked by the introduction of IMO2020 on 1 January 2020 which significantly limits the sulfur content of maritime fuels, is an important driver of Brazil’s offshore oil boom. For November 2020, China, the world’s second-largest economy, imported on average just over 11 million barrels of crude oil daily, representing a 10.1 percent increase over the previous month, although it was still almost one percent lower than a year earlier. Brazil has become a key supplier of crude oil for Asian refiners. By the end of October 2020, Latin America’s largest oil producer had become the third-largest supplier of petroleum to China. This was because of the rapidly growing popularity of its sweet medium grade Búzios and Lula crudes, which because of their low sulfur content are cheaper and easier to refine into IMO2020 compliant fuels. The introduction of IMO2020 is having a notable effect on demand and pricing for low sulfur content medium and light crude oil grades, with maritime fuel expected to grow by almost one percent this year from 2019 when it was a $149 billion market that accounted for around five percent of crude oil consumed globally. Seaborne trade accounts for around 90 percent of total world trade volumes, highlighting its importance to the functioning of the global economy. This explains why IMO2020 had such a significant effect on demand for sweeter crude oil varieties and was responsible for causing Brazil’s Búzios and Lula grades to sell at a premium to the international Brent benchmark price.

Also on rt.com Brazil is emerging as the world’s leading offshore oil producer

According to Oilprice.com data Lula is trading at a 5 percent or $2.78 per barrel premium to Brent. While prices are not readily available for Búzios, according to Petrobras it sells at a premium to Brent in Asia.

Growing demand for the sweet crude oil grades produced by Brazil’s pre-salt oilfields sees Petrobras focused on developing its pre-salt operations. Brazil’s national oil company has budgeted capital spending for exploration and production activities of $46.5 billion from 2021 to 2025. Those upstream projects being approved for development must have a breakeven price of $35 per Brent or less. Petrobras has earmarked 70 percent of that budget for its pre-salt oilfields, notably Búzios where 36 percent of the total amount will be spent. The premium price paid for Búzios crude oil is a key reason for Petrobras’ focus on expanding operations at the deep-water Búzios oilfield. The state-controlled oil company plans to deploy four new FPSOs in Búzios between 2022 and 2025 as well as boost the number of producing wells to 29. Petrobras recently reported it had completed the drilling of a new well at the Búzios field where it found what it described as “oil of excellent quality.” That will give Petrobras’ and Brazil’s pre-salt oil production a solid lift. The integrated energy major is also racing ahead with developing its wholly-owned Itapu field which is expected to produce first oil next year, three years earlier than originally planned. That oilfield will pump crude oil of a similar grade to Búzios, meaning it should also sell for a premium to Brent.

Brazil building multi-purpose industrial mega-port to boost trade with Asia

The Lula and Búzios fields feature low breakeven prices which, along with the oil produced trading at a premium to Brent, enhances their profitability. According to Petrobras, the ultra-deepwater Búzios and Lula fields are pumping crude oil with a breakeven price of less than $35 per barrel. With Brent trading at $51 per barrel and Lula selling for $53 a barrel, there is considerable incentive for Petrobras to bolster production from those fields. Aside from strong demand from Asia refiners for Brazil’s pre-salt crude oil, stronger than expected domestic fuel demand is also driving the Latin American country’s massive offshore oil boom. According to Bloomberg fuel consumption in Latin America’s largest economy recently surged past pre-pandemic levels and will continue to strengthen going into 2021. Demand for Petrobras’ low sulfur content fuel is firm and will grow because of the global push to significantly reduce sulfur emissions. 

These developments were responsible for Brazil’s October 2020 pre-salt oil output (Portuguese) ratcheting up by a notable six percent compared to a year earlier, to average just over 2.5 million barrels daily. This sees offshore pre-salt oil production responsible for 85.5 percent of Brazil’s total oil production compared to 81 percent for the equivalent period during 2019. Nevertheless, spending cuts by energy majors including Petrobras and the shut-in of uneconomic wells because of the pandemic, were responsible for Brazil’s overall October hydrocarbon production falling 2.6 percent year over year to an average of just under 3.7 million barrels of oil equivalent daily.

Clearly, while the pandemic has hit Brazil’s oil industry causing production to fall because of savage budget cuts and well shut-ins it appears to have done no material long-term damage. There are signs that pre-salt oil production will keep growing at a solid clip fueled by demand from Asian refiners. That will be further boosted by stronger demand for crude oil and refined products as vaccines are rolled out, the pandemic eases and the global economy returns growth. It has been estimated by the US EIA that world oil consumption will rise by six percent year over year during 2021 to 98 million barrels daily. For these reasons Brazil’s oil production will grow significantly with Petrobras, which for October was responsible for 73 percent of the country’s oil output, targeting oil production of 2.7 million barrels daily by 2025.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/511079-brazil-massive-oil-boom/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The agreement covers business worth more than £18.6 billion ($25.25 billion) in 2019, and was announced after a video call between Britain’s international trade secretary, Liz Truss, and Turkey’s minister for trade, Ruhsar Pekcan.

“We’re just getting started,” Truss said in a tweet on Tuesday, as she celebrated the UK’s flurry of post-Brexit deals with 62 countries and the EU, which she said amounted to £885 billion ($1.193 trillion) worth of trade.

“This is unprecedented, with no other country ever negotiating so many trade deals simultaneously,” a spokesperson for the Department for International Trade (DIT) claimed.

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The Turkey deal covers “preferential tariffs” for some 7,600 British businesses that exported goods to the country last year, a sizeable chunk of which were machinery, iron, and steel, according to the DIT statement.

It also includes protections for the movement of car parts between the UK and Turkey, including for automaker Ford, which relies on the supply chain for its Transit range of vehicles.

The deal with Turkey is one of the UK’s largest after Switzerland, Japan, Canada, Iceland, and Norway, and it follows other recent trade agreements, including with Mexico on December 15.

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On Christmas Eve, the UK reached an 11th-hour trade deal with its largest trading partner, the EU, just seven days before the December 31 transition period deadline, when it leaves the 27-nation bloc’s single market and customs union.

EU bosses will sign the deal in Brussels on Wednesday, before an RAF plane flies it to London, where it will be inked by UK Prime Minister Boris Johnson.

UK MPs will be recalled to Parliament on Wednesday to vote on the deal.

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American Airlines Flight 718 will depart Miami International Airport at 10:30am ET (15:30 GMT) for New York’s LaGuardia Airport.

By the end of February, 91 daily American flights will be flown by the MAX, with United, Southwest, and Alaska airlines also resuming service in the first quarter of the year. Brazilian carrier Gol, which operates an all-Boeing 737 fleet, became the first airline to relaunch the jets earlier this month. 

Meanwhile, American and other carriers that operate the MAX said that customers that booked on the aircraft but don’t feel comfortable flying on the plane, could switch flights without paying a fee if options are available. 

Also on rt.com FAA clears Boeing 737 Max to fly again after 20-month grounding due to deadly crashes

“The truth is anytime there’s a problem with the 737 even if it’s a coffee maker on the fritz, it’s going to be news,” Henry Harteveldt, a former airline executive and president of travel consulting firm Atmosphere Research told CNBC. He said that while some travelers may opt for other aircraft at first, if there aren’t any major issues “it will be seen as just another plane.”

Regulators grounded the troubled Boeing aircraft worldwide in March 2019, after two almost-new 737 MAX planes crashed within five months of one another. The crashes, which occurred in Indonesia and Ethiopia, killed all 346 people on board. They prompted a lengthy safety review that was met by numerous delays, driving up losses and costs for Boeing. In both crashes, the new flight control software caused the aircraft to unexpectedly nosedive shortly after takeoff.

Boeing has since updated its flight manuals and revised several features of the model, including the flight control software and associated hardware in the cabin.

In November, the Federal Aviation Administration (FAA) cleared the 737 MAX to fly again after a nearly two-year ban, with FAA chief Stephen Dickson saying he was “100 percent comfortable with [his] family flying on it.”

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The 737’s return, however, comes at a time when air travel traffic has plummeted to historic lows globally due to the coronavirus pandemic. According to Statista, the number of scheduled passengers boarded by the global airline industry dropped to only 1.8 billion people by the end of November. That represents a 60 percent loss in global air passenger traffic. 

ACI Europe airports association warned earlier that 193 airports are at risk of insolvency in the coming months if passenger traffic does not start to recover.

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Article source: https://www.rt.com/business/511005-boeing-737-returns-to-skies/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Yergin’s expectations for oil demand are roughly in line with the forecasts by the International Energy Agency (IEA) and OPEC, which don’t expect annual oil demand to return to the pre-Covid levels next year, despite the projected rise compared to this year’s slump.

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Continued low demand for jet fuel will account for 80 percent of next year’s 3.1-million-bpd gap in oil demand compared to pre-pandemic levels, the IEA said in its monthly Oil Market Report earlier this month. OPEC also revised down its oil demand projections for this year and next in its Monthly Oil Market Report for December, expecting 2021 oil demand at 95.89 million bpd, down 410,000 bpd from its projection of 96.3 million bpd from November.

IHS Markit’s Yergin doesn’t see the biggest disruption on the oil market as either bringing forward or delaying peak oil demand.

“At the end of the day, it won’t have much impact on peak oil demand, which I still think will be around 2030 or so,” Yergin told Al Arabiya English.

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The Pulitzer-Prize winning energy author also discussed the US shale patch and the chances of it returning to the rapid growth in production in the years just before the 2020 price crash.

“Let me give you a very simple answer, the answer is no,” Yergin told Al Arabiya English when asked if US oil production could return to 1.5-million-bpd annual growth.

According to IHS Markit, shale production will stay relatively unchanged at around 11 million bpd until late 2021, before it starts rising, but it will increase at a much more moderate pace.

“So that 1.5 million barrels per day, that two million barrels per day that was so disruptive for the oil market, that’s history,” Yergin told Al Arabiya English.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/510987-ihs-markit-oil-demand/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China, which is by far Australia’s largest trading partner, accounted for 39.4 percent of goods exports and 17.6 percent of services exports between 2019 and 2020, the firm said in a note seen by CNBC. According to its senior economist, Marcel Thieliant, GDP in Australia could contract even more if Beijing continues to pile tariffs on more Australian imports.

Earlier this month, Canberra launched a World Trade Organization probe into Chinese trade levies which were hiked beyond 80 percent last spring.

Goods and services that are already “in the firing line” are worth almost a quarter of Australia’s exports to China, forming 1.8 percent of its economic output, the research firm said. “That figure could rise to around 2.8 percent of GDP if China targeted other products for which it isn’t hugely dependent on Australian imports.”

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Tensions between the two nations have ramped up in recent years, largely kicked off after Canberra banned Chinese telecoms Huawei and ZTE from its 5G rollout. Relations soured further after Australia called for an international inquiry into the origins of the coronavirus outbreak in April, prompting accusations from Beijing that Australian lawmakers were acting on marching orders from Washington.

According to Capital Economics, more restrictions by Beijing could come, including exports of gold, alumina (a type of material for industrial usage), and a “vast range of smaller items.”

“While Australia should be able to divert some shipments to other countries, the escalating trade war is another reason why Australia’s economy will never return to its pre-virus path even once the pandemic has been brought under control,” Thieliant said.

Overall, the country’s GDP could fall short of its pre-virus trajectory by about 1.5 percentage points at the end of 2022 while additional trade restrictions by Beijing could widen that shortfall further. The pain could be lessened, however, as “it’s possible that Australia will find other destinations for its exports,” the economist added.

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Article source: https://www.rt.com/business/510982-australia-china-trade-escalations/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

According to the research, inward foreign direct investment (FDI) flows to the South and South-West Asia subregion slightly decreased by two percent last year to $66 billion, from $67 billion in 2018. It said, however, that the growth was mainly driven by India, which accounted for 77 percent of the total inflows to the subregion and received $51 billion in 2019, up 20 percent from the previous year.

Investment into India has evolved from information technology services for multinational enterprises (MNEs) to a thriving local digital ecosystem where many domestic players – particularly in e-commerce – have attracted considerable international investment.

In the short term, both inflows and outflows from and to the subregion are expected to decline. The UN said that in the first three quarters of 2020, the value of greenfield FDI inflows declined by 43 percent compared to the same period last year, signaling a reversal of the growth trend in the subregion.

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“However, India’s economy could prove the most resilient in the subregion over the long term. FDI inflows have been steadily increasing and positive, albeit lower, economic growth after the pandemic and India’s large market will continue to attract market-seeking investment,” said the report.

The country’s fast-growing telecom and digital spaces in particular could see a faster rebound, as global venture capital firms and technology companies continue to show interest in the country’s market through acquisitions, it added.

According to the UN, Facebook and Google’s investment in India’s Jio Platforms in 2020, worth $5.7 billion and $4.5 billion respectively, were testaments to that trend.

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“Estimates suggest that by 2025, core digital sectors such as IT and business process management, digital communication services, and electronics manufacturing could double in size.

“In addition, the pandemic has only further increased the tendency of many sectors such as agriculture, education, energy, financial services, logistics to digitalize, as Covid-19 has pushed many individual and companies to adopt digital solutions and processes,” said the report.

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