June 7, 2020

OPEC+ decides to keep oil production cuts through July – Russian energy minister

“OPCE+ have decided to maintain oil production cuts of 9.7 million barrels per day for July,” Novak announced following the online meeting of the 13 members of the oil alliance and 10 non-OPEC states. The OPEC+ had initially agreed in April that it would cut supply by 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Those cuts were due to taper to 7.7 million bpd from July to December, but for July the terms of the deal will remained unchanged.

One of the reasons for prolonging the agreement were excessive oil reserves, despite supply shortages being expected in the near future, the minister pointed out.

Mexico, which was earlier reluctant to play along and prolong production cuts, remains in the deal, Novak said.

During the online meeting of the largest players on the oil market, it was also decided that Saudi Arabia, UAE, Kuwait and Oman will additionally reduce oil production in July by 1.2 million barrels per day, Azerbaijan’s energy ministry said. Countries such as Iraq and Nigeria, which exceeded production quotas in May and June, were told to compensate by introducing extra cuts between July and September. Russia intends to fulfil its obligations 100 percent in June, with all of the country’s oil companies confirming the cuts, Novak pointed out.

Prolonging the deal till the end of July will allow to reduce risks and decrease oil reserves, he said, adding that the market reacts positively to the OPEC+ deal.

“Demand is returning as big oil-consuming economies emerge from pandemic lockdown. But we are not out of the woods yet and challenges ahead remain,” Prince Abdulaziz bin Salman, energy minister of Saudi Arabia – the de facto leader of OPEC – told his colleagues during the conference.

On Friday, benchmark Brent crude reached $42 per barrel, more than doubling since April. However, it’s still a third lower than its price in late 2019.

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OPEC+ agrees to extend record oil cuts for another month – reports

The 13 members of the oil alliance and 10 non-OPEC states held an online meeting on Saturday to decide the fate of the cuts, currently at 9.7 million barrels per day (bpd). Delegates said all sides have agreed to extend the cuts for another month until the end of July, according to Bloomberg. The OPEC conference was still underway as the report emerged, while the joint meeting with non-OPEC nations was yet to start.

“The agreements went ahead as planned,” Iranian Oil Minister Bijan Zanganeh told the Shana news agency once consultations between the OPEC nations had concluded. There was a problem with a “lack of compliance of members like Iraq with the production cut quota,” but he noted that they had agreed to compensate for that in the coming months.

According to the initial plan hammered out in April, the record curbs were set to stay in place in May and June before dropping to 7.7 bpd from July.

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Not all members of the oil group were eager to support extended curbs. Nigeria’s minister of state for petroleum resources signaled ahead of the meeting that one or two nations, which he did not directly name, were against the measure. Meanwhile, Riyadh had reportedly been pushing for even longer curbs, considering an extension to August or even December.

While oil prices have already rebounded from April lows, when WTI entered negative territory for the first time ever and Brent slumped below $20 a barrel, the market is still under tremendous pressure due to the coronavirus. At the same time, some of the signatories of the deal – including the OPEC’s second largest producer, Iraq – failed to meet their obligations in May, keeping production above their quota.

Also on rt.com Global energy demand will collapse again if coronavirus makes a comeback, IEA warns

On Friday, when OPEC confirmed that the meeting was brought forward, both global oil benchmarks surged over five percent. The rally marked a sixth consecutive weekly gain for WTI and Brent, which ended the week at $39.55 per barrel and $42.30 per barrel respectively. That is still around a third less than the price of oil at the end of 2019, before the oil market started to collapse.

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Article source: https://www.rt.com/business/491037-opec-extends-oil-cuts/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Coronavirus crisis triggers private investment BOOM on Russian stock market

Crisis times often force people to rethink their financial strategies and look for new sources of income. This might be the reason for the recent boom in retail investing on the Moscow Exchange. 

Figures show that in February there were around 4.2 million private investors’ accounts on the country’s top trading platform, while the number surged to over 5.1 million by the end of spring. In March and April nearly 320,000 accounts were registered each month, while in May over 220,000 people joined in.

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While the first wave came amid market turmoil that was triggered by crashing oil prices, the investment inflow continued as the coronavirus left many people locked up at home due to government restrictions. Since the end of March, Russian regions started to introduce quarantine measures, giving people more time for trading.

Last month, retail investors bought almost 30 billion rubles (around $438 million) worth of shares of Russian companies listed on the Moscow Exchange. It follows active stock buying in the two previous months, when Russians piled over 78 billion rubles (around $1.4 billion) into the stock market.

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The energy sector has proven to be the most popular among Russian investors, as shares of national energy majors Gazprom and Rosneft as well as Lukoil were among the top 10 companies in the investment portfolio. Major Russian major Sberbank, VTB bank and Aeroflot are also among the most attractive stocks. 

The rise of retail investment comes as the digital era has facilitated access to trading. Some Russian banks now offer the use of their special platforms for investing in a range of securities including Russian and international shares.

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Article source: https://www.rt.com/business/491026-private-investment-boom-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China vows to do ‘whatever necessary’ to shield its US-blacklisted firms

New US sanctions on Chinese companies – some of which the Trump administration sees as acting “contrary to the national security,” and others it has accused of human right violations – took effect on Friday. The restrictions, announced last month, are set to block the sale of US goods and technology to businesses on the list.

“The United States has repeatedly used national security as a reason, abused measures such as export control, and used national forces to crack down on other countries’ companies,” China’s Ministry of Commerce said when the measure came into effect.

Also on rt.com US tech giants still doing business with blacklisted Chinese companies, research firm claims

Calling on Washington to “immediately stop these wrong practices,” the statement added that Beijing would not hesitate to use “whatever measures were necessary to resolutely safeguard the legitimate rights and interests of Chinese enterprises.”

The latest targets in the infamous economic blacklist include major Chinese cybersecurity firm Qihoo 360 along with other tech suppliers, the bulk of which are developing artificial intelligence (AI) and facial recognition technologies. While the company denied any wrongdoing, it earlier accused the CIA of breaking into the Chinese airline and oil industries, among other targets.

Also on rt.com Beijing may target Apple, Boeing other US tech giants in retaliation for Huawei ban – Chinese state media

Earlier in May, the US extended pressure on China’s tech giant Huawei. The company – deemed a security threat by Washington – has long been in the same Entity List, prohibiting US firms from doing business with it without special permission. In its latest move, the US tried to cut the firm off from global semiconductor supplies.

The move infuriated Beijing, with Chinese state media saying the government may retaliate with a similar “unreliable entity list.” The restrictions may come as a huge blow to US tech giants such as Apple and Boeing, both of which were named among the targets, cutting their access to the lucrative Chinese market.

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Article source: https://www.rt.com/business/491015-china-blasts-entity-list/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

US unemployment rate not as awful as expected with surprising job increase

The federal unemployment rate dropped to 13.3 percent in May from 14.7 percent a month earlier, according to figures released by the Department of Labor on Friday. This is much better that analysts predicted as it was feared that the US could have extended April’s record losses, with another 8 million jobs lost and the unemployment rate expected to spike to 20 percent. 

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“These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it,” the department said.

While around half of the jobs were secured in leisure and hospitality, employment was also up in construction, education, and health services. However, government employment continued to decline sharply, according to the labor agency data.

US President Donald Trump was quick to take credit for the “incredible” jobs data, promising to hold a news conference on the matter later in the day.

The upbeat May employment numbers triggered a rally on Wall Street, with the Dow Jones Industrial Average climbing over 700 points shortly after the opening bell. Both the tech-heavy Nasdaq Composite and the SP also advanced, gaining nearly two percent.

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Article source: https://www.rt.com/business/490904-us-unemployment-falls/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Oil prices rally on hopes that major global producers led by Russia & Saudi Arabia will extend supply cuts

Friday’s rally signaled that both key global oil benchmarks are on track for a sixth week of gains. Apart from slowly recovering global demand for the commodity, the prices were also boosted by massive output cuts, introduced by the Organization of Petroleum Exporting Countries (OPEC) and allied major oil producers led by Russia, together known as the OPEC+ group.

Also on rt.com OPEC’s second largest producer won’t give up on output cuts

While the production caps came into force on May 1, the group is set to hold a meeting to review their output cuts on Saturday, some delegations confirmed. It is expected that the parties will extend existing production curbs of 9.7 million barrels per day (bpd) until the end of July, instead of planned easing. According to the initial scheme, the cuts were set to be reduced to 7.7 million bpd in July before dropping to 5.8 million bpd at the beginning of the next year.

The meeting was initially scheduled to take place later this month, but the organization decided to bring it forward. 

Also on rt.com Russia to drill new oil wells to be ready to go when current OPEC+ production cut deal expires in 2022

While the primary players – Russia and Saudi Arabia – support the extension of the output cuts, some other signatories reportedly failed to comply with the conditions of the deal. Iraq, the OPEC’s second largest oil producer, exceeded its production quota in May, but promised to compensate for it by curbing output next month. However, some companies operating in the country are reportedly refusing to cut output, jeopardizing the oil accord meant to prop up prices. 

Iraq is not the only nation struggling to stick to its commitments. Smaller exporters such as Nigeria, Angola, and Kazakhstan also failed to comply with the terms of the deal, but are believed to be in support of the proposed extension.

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Article source: https://www.rt.com/business/490886-oil-rallies-opec-meeting/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

‘Amazon wouldn’t be nearly as large’ if US was a real economy – Peter Schiff responds to Elon Musk’s call to break up monopolies

In a follow-up tweet to the Tesla boss’ “Time to break up Amazon. Monopolies are wrong!” post, Schiff has slammed the US central bank.

“Time to end the Fed’s monopoly on money printing and price fixing interest rates,” he wrote, adding: “If we had a real economy, based on savings and production, instead of a bubble based on credit conjured into existence, Amazon wouldn’t be nearly as large, as it would have to generate real profits.”

Schiff, who has repeatedly warned the US economy is a “gigantic bubble,” later retweeted his own earlier tweet, stating that the national debt had already passed $24 trillion.

Musk’s criticism of Amazon followed a complaint by writer Alex Berenson, who claimed the world’s largest online retailer “censored” his book about the Covid-19 pandemic by refusing to publish it.

Also on rt.com Amazon BACKS DOWN after many, including Elon Musk, slam it for censorship of book questioning Covid-19 threat

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Article source: https://www.rt.com/business/490879-schiff-musk-amazon-fed/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Forcing Chinese firms off American stock markets will backfire on US, Beijing warns

China’s Foreign Ministry Spokesperson Geng Shuang accused Washington of making hasty generalizations about Chinese companies’ accounting practices, Reuters reported, citing the official’s regular press briefing.

The statement comes as the Trump administration seeks ways to crack down on Chinese companies, making it harder for them to trade on foreign exchanges. On Thursday, President Donald Trump accused China of benefiting from US capital markets “without complying with critical protections” and ordered regulators to come up with ways to tighten scrutiny of US-listed Chinese enterprises within the next 60 days.

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At the same time, US Secretary of State Mike Pompeo said that China-based firms have a “pattern of fraudulent accounting practices,” as he praised Nasdaq for proposing to tighten listing rules for them.

“American investors should not be subjected to hidden and undue risks associated with companies that do not abide by the same rules as US firms,” he said in a statement, adding other exchanges in the US and beyond should follow suit.

As financial markets have become another front of US-China tensions, more Chinese firms are considering listing on the Hong Kong exchange. The CEO of Hong Kong Exchanges and Clearing, which owns the Hong Kong stock exchange, expects that many companies will return to the Asian financial hub due to US political pressure.

Also on rt.com US tech giants still doing business with blacklisted Chinese companies, research firm claims

“This is going to be a big year for IPOs, including both huge IPOs from [mainland] China, but very substantial returnees, what we call them, from the United States,” Charles Li said. “Today the atmosphere in the US is becoming less friendly and we obviously have fundamentally changed many aspects of our listing regime so that we are becoming more accommodating,” he added.

Some of China’s most valuable US-listed companies have already announced plans to raise billions of dollars through a secondary listing in Hong Kong. Online gaming company NetEase, which is expected to start trading in Hong Kong later this month, plans to sell 171 million ordinary shares. The listing could raise the company around $2.7 billion and would be the biggest stock offering in Hong Kong so far this year. However, it could be overtaken by another Chinese behemoth, online shopping service JD.com, which also plans a listing in the city.

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Article source: https://www.rt.com/business/490865-us-pressure-chinese-firms/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Oil prices slide amid OPEC+ production cuts meeting uncertainty

A ministerial conference could be called at short notice this week if there was an agreement, the sources said, adding that a meeting on Friday could be arranged.  

OPEC and non-OPEC allies were originally scheduled to review their production cuts on June 9-10. However, Algeria, which currently holds the rotating OPEC presidency, proposed last month to bring the meeting forward.

On Wednesday TASS reported, citing sources, that the key OPEC+ producers, Russia and Saudi Arabia, have agreed to extend the maximum level of production within the alliance by at least one month.

Also on rt.com OPEC’s second largest producer won’t give up on output cuts

Russian Energy Minister Alexander Novak said on Thursday that the global oil market could face a shortage of three to five million barrels per day in July, depending on the deal reached by OPEC+.

In April, the international oil producing alliance OPEC+ agreed to reduce supply by a combined 9.7 million barrels per day (bpd) during May and June. The move was designed to prop up crude prices as the Covid-19 pandemic led to an unprecedented collapse in energy demand. Production cuts began on May 1 and are set to run through to the end of June.

Crude prices climbed in recent weeks, recovering from a dramatic fall in April which saw Brent futures hover close to 20-year lows and US WTI tumble into negative territory for the first time in history.

Also on rt.com Russia reduces oil production in May close to OPEC+ target

The international benchmark was trading 0.8 percent lower as of 14:36 GMT on Thursday, at $39.44 a barrel. US crude tumbled 1.4 percent to $36.75.

According to analysts at SP Global Platts, Brent crude prices “may find some pockets of support” in the range of $35 to $40 a barrel in June.

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Article source: https://www.rt.com/business/490771-russia-saudi-opec-agreement/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia ramps up natural gas delivery to China via Power of Siberia mega pipeline

The 3,000km (1864 miles) cross-border pipeline started official deliveries of Russian natural gas to China in December. The so-called eastern route’s capacity is 61 billion cubic meters of gas per year, including 38 billion cubic meters for export.

According to Xinhua News Agency, the pipeline enters China via the border city of Heihe and runs through nine provinces, municipalities and autonomous regions. It has also been connected with existing natural gas networks in China to allow the Russian natural gas supply to reach China’s northeast, Beijing-Tianjin-Hebei and the Yangtze River Delta region.

Also on rt.com Russia pivots East with launch of natural gas deliveries to China

Agreement on gas supplies via the Power of Siberia pipeline was reached in 2014, with Russia’s energy giant Gazprom and the China National Petroleum Corporation (CNPC) inking a 30-year contract. It is Gazprom’s biggest-ever agreement and the first natural gas pipeline between Russia and China.

The Russian company plans to start with deliveries of 10 million cubic meters a day and aims to reach peak capacity by 2025. Gazprom plans to export five billion cubic meters of gas to China this year, 10 billion in 2021 and 15 billion in 2022.

Gas consumption in China, Asia’s biggest economy, has surged in recent years as the government pressures homes and factories to use it instead of coal to combat air pollution. Gazprom intends to become China’s biggest supplier, making up more than 25 percent of gas imports by 2035 as demand for natural gas grows.

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Article source: https://www.rt.com/business/490733-russia-china-gas-supplies/?utm_source=rss&utm_medium=rss&utm_campaign=RSS