January 17, 2019

Oil markets could see deficit in 2019

The oil supply surplus is “starting to reverse,” according to a new report from Bank of America Merrill Lynch.

The investment bank noted that oil prices had collapsed in late 2018 not only because of an oversupply problem, but also because of other “non-fundamental factors,” including the selloff of long positions by hedge funds and other market managers, as well as by fear and uncertainty in broader financial markets. Still, the bottom line was that the oil market saw a glut once again emerge in the fourth quarter.

However, “now the 1.3mn b/d surplus in 4Q18 is starting to reverse,” Bank of America Merrill Lynch analysts wrote in a January 10 note. In fact, the bank says that the OPEC+ cuts could translate into a “slight deficit” for 2019. “With investor positioning reflecting a bearish set-up, Brent prices have already bounced back above $60/bbl, and we retain our $70/bbl average forecast for 2019,” BofAML wrote.

Also on rt.com Wall Street sees oil price recovery in 2019

Oil price forecasts vary quite a bit, but a dozen or so investment banks largely agree that the selloff in late December, which pushed Brent down to $50 per barrel, had gone too far. BofAML is betting that Brent rises back to $70 per barrel.

However, the investment bank issued a rather significant caveat. This assessment is based on the assumption that the global economy does not take a turn for the worse. BofAML analysts said that Brent could plunge as low as $35 per barrel if global GDP growth slows from 3.5 percent to 2 percent.

At this point, it is anybody’s guess if the global economy slows by that much, but there is a growing number of indicators that at least suggests such a deceleration is possible. The recent data from China showing a shocking slowdown in both imports and exports is discouraging. Exports fell 4.4 percent in December from a year earlier, while imports crashed by 7.6 percent, suggesting that the world’s second largest economy is starting to weaken a bit.

Also on rt.com World may face ‘low price scenario’ for oil this year if OPEC plan fails, JP Morgan warns

Nevertheless, the oil market fundamentals, as they stand, do not look overly bearish. Bank of America Merrill Lynch estimates that supply from OPEC+ will fall by a whopping 2.6 million barrels per day (mb/d) in the fourth quarter of this year compared to the fourth quarter of 2018. That figure includes the 1.2 mb/d of agreed upon cuts, plus substantial losses from Iran and Venezuela. Those significant declines, combined with slower US shale growth and a steady increase in demand, should be enough to tip the oil supply balance into deficit territory, BofAML concludes.

“On a net basis, we see aggregate [year-on-year] global oil supply growth of just 400 thousand b/d in 2019 and a deficit building into the summer months,” the bank said.

READ MORE: What’s behind the crash in crude?

Moreover, the supply surplus that did emerge in late 2018 was much smaller than the one that occurred between 2014 and 2016. The most recent surplus totaled perhaps 200 million barrels, compared to around 1-billion-barrel surplus in the 2014-2016 period, according to Scotiabank. In that context, erasing the glut should be easier to achieve.

As such, top OPEC+ officials do not seem overly concerned. “Market sentiment today is being shaped by undue concerns about demand, underestimation of the impact of agreed supply cuts, and a misreading of the supply-demand trends which causes counterfactual actions by financial players,” Saudi oil minister Khalid al-Falih said at the Atlantic Council’s 2019 Global Energy Forum in Abu Dhabi.

Also on rt.com OPEC-Russia alliance to extend oil production cuts if necessary

“In other words, if we look beyond the noise of weekly data and vibrations in the market, and the speculators’ herd-like behavior, I remain convinced that we are on the right track and that the oil market will quickly return to balance,” he said.

One of the key variables to watch is Iran’s oil exports levels. Waivers granted to countries importing oil from Iran expire in May. The top US official dealing with Iran sanctions, Brian Hook, hinted at the same conference in Abu Dhabi that the American government wouldn’t be as lenient this time around. “All I can say is that certainly when we have a better supplied oil market, then that will put us in a better path to [reducing Iranian crude exports] to zero,” Hook said.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/448955-oil-markets-deficit-2019/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russian economy minister to lead country’s delegation to Davos

Novak is also planning to take part in the annual business event. Last week, Kremlin spokesman Dmitry Peskov said that Russian President Vladimir Putin hadn’t decided whether he’d attend the WEF.

Oreshkin is expected to take part in the session called “Russia’s Economy – A Step Forward,” as part of Russia House, which is organized by the Roscongress Foundation.

US President Donald Trump canceled his planned trip to the forum, citing the ongoing impasse with congressional Democrats that’s keeping parts of the US government closed for a third week. French President Emmanuel Macron said he was not planning to attend amid the ongoing Yellow Vest protests across France.

Also on rt.com Davos U-turn: World Economic Forum welcomes all Russian businessmen after boycott threat

In November, reports emerged claiming that Viktor Vekselberg, the owner of Renova group, aluminum tycoon Oleg Deripaska, and the head of VTB Bank Andrey Kostin would not be allowed to attend the 2019 Davos meeting due to being included on the list of US sanctions. Back then, Moscow lambasted the possible ban and threatened to boycott the forum at state level. However, the WEF backtracked on the decision.

One of the world’s largest business events, scheduled for January 22–25, the WEF in Davos plans to welcome participants from some 50 countries. This year’s forum is dubbed “Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution.”

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448949-russian-economy-minister-davos/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Ain’t ‘lovin’ it’: McDonald’s loses ‘Big Mac’ trade mark battle in EU

The case was brought before the regulator two years ago by an Irish restaurant chain called Supermac’s. It accused McDonald’s of “trademark bullying” and wanted to prevent the giant of trademarking the terms “Big Mac” and “Mc” in some instances in Europe. Both fast food restaurants sell burgers and fries.

Also on rt.com McMaggots: Woman finds wriggling larva in McDonald’s ketchup dispenser (VIDEO)

McDonald’s said that it intends to appeal the decision and is confident it will be overturned.

“We are disappointed in the EUIPO’s [European Union Intellectual Property Office – Ed.] decision and believe this decision did not take into account the substantial evidence submitted by McDonald’s proving use of our BIG MAC mark throughout Europe,” a McDonald’s spokesperson said in a statement.

READ MORE: Welcome back: Russia reclaims rights to Stolichnaya vodka brand after bitter legal fight

Pat McDonagh, the managing director and founder of Galway-based Supermac’s, said: “Never mind David versus Goliath, this unique landmark decision is akin to the Connacht team winning against the All Blacks.”

“This is the end of the McBully…Just because McDonald’s has deep pockets and we are relatively small in context doesn’t mean we weren’t going to fight our corner,” he added.

Also on rt.com McDonald’s in Kim’s land? Pyongyang seeks US investment as relations with S. Korea thaw

Founded in 1978, Supermac’s has about 100 restaurants in Ireland. It has been locked in a legal battle with McDonald’s since 2015 when it planned to expand into the UK and rest of the EU.

The trademark dispute is not the first time that McDonald’s has gone to the courts over prefixes. In 2009, a Malaysian chain won the right to call itself McCurry after an eight-year battle with the fast food chain.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448940-mcdonalds-loses-trademark-eu/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia’s gold & foreign currency reserves surge for third consecutive year

Reserves reportedly grew to over $468 billion from $432 billion at the beginning of last January. According to the regulator, reserves grew for the third consecutive year. In 2017, growth totaled $55 billion, while 2016 saw an increase of $9.3 billion.

Russia shifts $100bn of its reserves into yuan, yen euro in a great dollar dump

The value of gold in the reserves increased by nearly five percent to $86.9 billion in December, with the share of the precious metal surging to 18.5 percent. Last year, saw the value of gold in Russia’s reserves grow by over $10 billion, marking an increase of 13 percent.

The aggregate value of the national reserves grew by 0.6 percent to $381 billion in December, and showed an increase of 7.2 percent last year.

Russia’s growing reserves in the last three years seem to point to an adjustment to economic sanctions imposed by the US and the European Union in 2014. Western penalties had a significant initial impact on Russia’s reserves, which saw a decrease of $124 billion in 2014 and a $17 billion contraction the following year.

Russia’s international reserves are highly liquid foreign assets comprising stocks of monetary gold, foreign currencies and Special Drawing Right (SDR) assets, which are at the disposal of the Central Bank of Russia and the government.

Earlier this month, Russia’s central bank reported that it cut the share of the US dollar in the country’s foreign reserves to a historic low, transferring nearly $100 billion into the euro, the Japanese yen and the Chinese yuan. The step came as a part of a broader state policy on eliminating a reliance on the greenback.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448930-russia-foreign-reserves-growth/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

US investment fund triples stake in Russia’s internet giant Yandex

The company that identifies itself as one of the world’s most reputable investment firms reportedly boosted its stake from 1.8 percent to 6.41 percent, which represents about 18.365 million shares, as of December 31, 2018.

Russian ‘city of the future’ becomes first in Europe to offer self-driving taxi service

Yandex closed trading in the US at $29.55 per share on Monday so the entire OppenheimerFunds stake in the Russian company is currently worth $542.7 million.

In 2015, the New York-based investment company entirely eliminated its stake in Yandex. Prior to that OppenheimerFunds had been the largest portfolio investors in the Russian corporation holding 36.4 million class A shares (11.48 percent of equity, 4.2 percent of votes) in Yandex.

The fund resumed investment in the Russian firm in the fourth quarter of 2017, having bought 5.1 million shares.

Based in Moscow, Yandex operates an Internet website and a search engine in Russia. The company offers news, shopping information, blogging, photography, music and video services. It also provides online taxi and food delivery services. The company reportedly gets most of its revenues from online advertising.

In August, Yandex announced the test launch of a new autonomous ride-hailing service in the special economic zone of Innopolis. In December, the internet giant released its first smartphone, called Yandex.Phone, and launched its own home assistant smart speaker.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448877-us-fund-triples-yandex-share/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia’s diamond titan returns to Zimbabwe to help country regain its former luster

According to Ivanov, the details of the projects will be negotiated in the near future. Alrosa is reportedly planning to continue exploration of the region with the support of the Zimbabwean government.

“I’m sure we’ll be able to discuss prospects of our participation in the sphere of geologic exploration activities and development of deposit with a high degree of exploration maturity,” Ivanov told journalists.

Russia looks to eliminate US dollar from trade with African countries – official

“We are ready to share all of Alrosa’s technology when it comes to grading and preparing diamonds for sale, as well as the necessary know-how so that Zimbabwe could get back the position the country had on the global diamond mining market for several years,” he added.

In December, the Russian diamond miner set up a subsidiary Alrosa (Zimbabwe) Limited in the Zimbabwean capital of Harare. Alrosa’s geologists and mining engineers will arrive in the country in February to start operations, according to the company.

According to Ivanov, Zimbabwe’s authorities are currently implementing a wide range of legislative changes that would let Alrosa enter the country’s market and negotiate more serious projects with Zimbabwean partners.

On Monday, Zimbabwe’s President Emmerson Mnangagwa said that the southern African country is counting on Alrosa’s support to expand its diamond industry. Mnangagwa is making his first visit to Moscow since becoming president. He succeeded Robert Mugabe in November 2017, who ruled the country for 38 years.

Alrosa’s major production assets are based in Russia, but the company also runs operations in Angola and stopped working in Zimbabwe in 2016. The African country’s diamond production has seen a dramatic plunge of nearly 75 percent over the past five years.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448874-alrosa-zimbabwe-diamond-mining/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Expect a wild ride for the British pound – Professor Steve Keen

Professor of Economy, Steve Keen who is the author of Debunking Economics, told RT that it’s hard to say how the vote will affect the British currency but added “definitely, expect a wild ride,” while the markets are “completely dominated with speculation.”

“With speculators gambling one can’t actually say whether it will have impact one way or the other,” he said.

Also on rt.com What’s next for Brexit Britain after UK Parliament voted ‘no’ on Theresa May’s deal?

“In general, I think the pound will be at least 30 percent lower than it had been,” Keen said, explaining “I think it is overvalued and that makes British manufacturing uncompetitive…”

The professor also said that if the break with the European Union happens the pound will fall in value but “overall it won’t be a good thing or a bad thing” because it is already seriously overvalued.

The British currency has been sliding since 2008, well before the Brexit referendum. According to Keen, that means that Britain has some other serious economic problems.

“The main problem the British have had is that they made a mistake 40 years ago deciding to go with services rather than manufacturing.”

He explained that Britain is now running a substantive deficit compared to Germany which is running a gigantic balance of trade surplus.

Also on rt.com ‘Winter is coming’: Gove warns of GOT-style apocalypse if crucial Brexit vote fails

“So, that is the key problem for the British economy and it really has almost nothing to do with Brexit,” Keen said.

He also agreed with economists that a deal will unlock withheld investment by the UK and foreign businesses and could ultimately set the UK up to be the fastest growing major economy in 2019.

Steve Keen noted that Britain being forced to actually develop an industrial policy after having ignored it for 30 years could be a very positive consequence of Brexit. That will be a chance to “revive the British economy,” he said.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448873-pound-sterling-fall-brexit/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Canada sees no cancer risk from Monsanto’s Roundup weed killer

The federal agency dismissed eight notices of objection and assertions made in the so-called Monsanto Papers in 2017.

“After a thorough scientific review, we have concluded that the concerns raised by the objectors could not be scientifically supported when considering the entire body of relevant data. The objections raised did not create doubt or concern regarding the scientific basis for the 2017 re-evaluation decision for glyphosate,” Health Canada said in a press release.

Also on rt.com ‘Completely safe’: Monsanto owner Bayer hit by new wave of lawsuits over Roundup weed killer

The 2017 re-evaluation determined that glyphosate is not genotoxic and is unlikely to pose a human cancer risk. It also determined that dietary exposure associated with the use of glyphosate is not expected to pose a risk of concern to human health. When used according to revised label directions, glyphosate products are not expected to pose risks of concern to the environment, according to the study.

Health Canada said it has selected a group of 20 of its own scientists who were not involved in the 2017 decision to evaluate the eight objections and the concerns raised publicly around glyphosate. The agency said its scientists “left no stone unturned in conducting” the review.

Also on rt.com Monsanto’s top weedkiller now found in pet food as well as cereal

The agency noted that it “had access to numerous individual studies and raw scientific data during its assessment of glyphosate, including additional cancer and genotoxicity studies.” It added that it will “continue to monitor for new information related to glyphosate, including regulatory actions from other governments, and will take appropriate action if risks of concern to human health or the environment are identified.”

Glyphosate is the active ingredient in Monsanto’s Roundup, which is the most popular weed killer in the US. German chemicals and pharmaceuticals giant Bayer, which bought Monsanto last year, disclosed earlier that lawsuits from 9,300 plaintiffs were pending at the end of October. The lawsuits alleged that the company’s recently acquired weed-killing product caused cancer.

Also on rt.com Monsanto loses appeal on historic Roundup cancer verdict, owes $78mn

The surge in lawsuits followed the $289-million California court verdict when Monsanto was ordered to pay damages to a man who alleged its glyphosate-based weed killers, including Roundup, caused his cancer.

Bayer rejected all the accusations, claiming there are hundreds of scientific studies and regulatory authorities that show glyphosate, the compound contained in the weed killers, is safe to use.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448846-canada-monsanto-glyphosate-safety/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia’s trade with China surges to more than $107 billion

The agency noted that last year Russian imports of Chinese goods increased by 12 percent to $47.98 billion. At the same time, China’s imports from Russia grew by 42.7 percent, reaching $59.08 billion. In December alone, the volume of trade between the neighboring countries reportedly totaled $9.8 billion.

Russia-China trade turnover has grown significantly over recent years. In 2017, mutual trade amounted to $84.07 billion demonstrating a growth of 20.8 percent. In 2016, the trade turnover grew by 2.2 percent in annual terms to $69.52 billion.

Also on rt.com Trump tariff fail? China’s trade surplus with US hits highest level in more than decade

Russia became China’s number one partner when it comes to trade growth dynamics, according to the GAC spokesman Li Kuiwen. The spokesman added that China had mostly exported electromechanical goods to Russia, while purchased oil, coal, and wood.

Last week, the Chinese commerce ministry said that mutual trade between the countries in December reached $100 billion for the first time ever. Russia is currently ranked as China’s tenth biggest trade partner. Beijing remained a major importer of Russian produce, accounting for 15 percent of the country’s international trade as of 2017.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448783-russia-china-trade-turnover/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russian nuclear firm wins contracts to clean up Fukushima

“We have been engaged by Japan to implement the nuclear accident management plan at the Fukushima NPP. We have won two tenders and are going ahead,” Likhachev told Russia-24 news channel.

Also on rt.com Putin offers Russian assistance to Japan to clean up Fukushima

In September 2017, Rosatom’s First Deputy CEO Kirill Komarov said that Rosatom offered their Japanese counterparts assistance in cleaning up at the Fukushima NPP and in decommissioning other unsafe nuclear power plants.

READ MORE: Fukushima rice to be sold in Britain

That followed Russian President Vladimir Putin’s announcement that Russia and Japan will start joint efforts to clean up after the accident.

The decommissioning of the wrecked Fukushima reactors could take several decades and cost $200 billion. Japan plans to restart 16 out of the 45 Fukushima-type reactors, while the others will be mothballed. The country intends to reduce the share of nuclear energy from 29 percent in 2011 to 21-22 percent by 2030.

The accident at the Fukushima nuclear power plant occurred in March 2011 when a massive tsunami triggered by a 9.0-magnitude earthquake overwhelmed the reactor cooling systems at the Fukushima Daiichi plant in northeastern Japan. It caused reactor meltdowns, releasing radiation in the most dangerous nuclear accident since Chernobyl in 1986.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/448765-rosatom-bids-fukushima-npp/?utm_source=rss&utm_medium=rss&utm_campaign=RSS