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Tue, 28th February 2017

Anirudh Sethi Report

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Archives of “saudi arabia” Tag

OPEC Production Cut May Need to Be Extended: Oil Ministers

The oil ministers of Iran and Qatar have suggested that OPEC’s production cut agreement may have to be extended beyond the June deadline, despite an almost 100-percent compliance rate.

The comments come a day after the American Petroleum Institute reported the second-largest crude oil inventory increase in history, at 14.227 million barrels, which added fuel to worries that production cut efforts are not enough to rebalance the market.

US court refuses to immediately restore Trump travel ban

A U.S. appeal court late on Saturday denied a request from the U.S. Department of Justice to immediately restore a immigration order from President Donald Trump barring citizens from seven mainly Muslim countries and temporarily banning refugees.

The court ruling dealt a further setback to Trump, who has denounced the judge in the state of Washington who blocked his executive order on Friday. In tweets and comments to reporters, the president has insisted he will get the ban reinstated.

 Trump says the temporary immigration restrictions on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen, and on all refugees, are necessary to protect the United States from Islamist militants. Critics say they are unjustified and discriminatory.

The judge’s order and the appeal ruling have created what may be a short-lived opportunity for travelers from the seven affected countries to get into the United States while the legal uncertainty continues.

In a brief order, the appeals court said the government’s request for an immediate administrative stay on the Washington judge’s decision had been denied. It was awaiting further submissions from Washington and Minnesota states on Sunday, and from the government on Monday.

The government’s appeal says the decision by judge James Robart in Washington poses an immediate harm to the public, thwarts enforcement of an executive order and “second-guesses the president’s national security judgment about the quantum of risk posed by the admission of certain classes of (non-citizens) and the best means of minimizing that risk”.

Trump denounced the “so-called” judge in a series of tweets on Saturday and told reporters: “We’ll win. For the safety of the country, we’ll win.”

IRAQI FAMILY

The president’s Jan. 27 order has drawn criticism even from U.S. allies and created chaos for thousands of people who have, in some cases, spent years seeking asylum in the United States.

Iraqi Fuad Sharef, together with his wife and three children, spent two years obtaining U.S. visas, and had packed up to move to America last week, but were turned back to Iraq after a failed attempt to board a U.S.-bound flight from Cairo.

Google Tells Offshore Staff To Return To The US After Trump Executive Order

In the immediate aftermath of Trump’s controversial executive order, prohibiting entry into the US of citizens from seven mostly-Muslim nations – Syria, Iraq, Iran, Sudan, Somalia, Yemen and Libya – yet which excludes such nations as Saudi Arabia, Egypt and Turkey in which Trump has done business deals…

… Google issued a stark warning to staff traveling overseas who may be impacted by Trump’s new executive order on immigration: Get back to the U.S. now.

According to Bloomberg, Google CEO Sundar Pichai slammed Trump’s move in a note to employees Friday, telling them that more than 100 company staff are affected by the order. “It’s painful to see the personal cost of this executive order on our colleagues,” Pichai wrote in the memo. “We’ve always made our view on immigration issues known publicly and will continue to do so.” The memo follows a similar statement made on Friday by Facebook Chief Executive Officer Mark Zuckerberg in which he said he was “concerned” by Trump’s recent moves to restrict immigration.

Saudi minister says 1.5 mbpd of oil already removed from market

OPEC and Russia tout progress

Producers have already cut output by 1.5 mbpd, according to Saudi minister of energy Khalid Al-Falih. He said his country along with Kuwait and Algeria have already taken more off the market than required.

Meanwhile, Russian oil minister Novak said progress in cutting Russian production was “ahead of schedule”.

The monitoring committee of OPEC are meeting today and tomorrow. The topic won’t yet be compliance because we’re not yet at the end of the first month of the agreement. Instead, they will talk about how to monitor and measure.

The total amount of oil expected to be removed from the market for six months is 1.8 mbpd. Skeptics argue that much of the ‘cut’ is optics and that countries were producing beyond capacity in the lead-up to the agreement or had scheduled natural/seasonal depletions.

Influential Algerian oil minister Boutarfa repeated a comment from his Saudi counterpart, who said last week that quotas beyond June may not be necessary.

“If we really comply by 80-90%, it may not be necessary to continue,” he said.

WTI crude finished $1.10 higher on Friday to $53.22 but failed in a test of downtrend resistance after a large jump in oil drilling rigs.

Oil supply cuts may not be extended after June – Saudi Arabia’s oil minister

Saudi Arabia’s oil minister said that the supply cuts agreed by Opec and non-Opec countries at the end of last year may not need to be extended beyond June, as rising demand and strong compliance should have pushed the market towards balance by then.

Khalid al Falih, speaking at an industry event in Abu Dhabi, struck a bullish pose saying the cuts, which began on January 1, would have their “full impact by the first half” of 2017.

“We don’t think it’s necessary given the level of compliance…and given the expectations of demand,” Reuters reported.

He added, however, that the group could still extend the six-month deal “if there was a need”.

Brent crude, the international oil benchmark, was up 38 cents at $55.83 a barrel by 10am London time while US benchmark West Texas Intermediate gained 32 cents to $52.69 a barrel.

US oil output to rise 1.3% in 2017, EIA says

US oil production has turned a corner after a long period of weak petroleum prices, the government said, with volumes rising for the first time since early 2015.

The Energy Information Administration forecast that oil output from the US will increase 1.3 per cent to 9m barrels per day in 2017, abandoning an earlier prediction of a 0.9 per cent fall.

In the first forecast for 2018 in its monthly Short-Term Energy Outlook, the statistical agency said US crude production will rise another 3.3 per cent, or 300,000 b/d, to 9.3m b/d. Production hit bottom last September, EIA said.

Saudis Forecast $51 Oil In 2017 Rising To $65 By 2019; Will Spend 20% Of Total Budget On Military

After suffering two record budgets shortfalls in 2015 and 2016 as a result of plunging oil prices, and which nearly brought both Saudi Arabia’s economy and banking sector to a standstill, not to mention billions in unpaid state worker wages at least until generous foreign investors funded the Kingdom’s imminent cash needs with its first, and massive, bond sale ever, today Saudi Arabia released it budget outlook for the next year.

And while the Saudis believe the country’s budget deficit will fall modestly next year even with an increase in spending, it is still set to be a painful 8% of GDP suggesting the Saudi cash burn will continue even with some generous oil price assumptions.

The budget deficit for 2017 is expected decline 33% to 198 billion riyals ($237 billion), or 7.7% of GDP, from 297 billion riyals or 11.5% of GDP in 2016 year and 362 billion riyals in 2015, the Finance Ministry said in a statement on its website on Thursday. In 2016, the finance ministry said its spending of 825 billion riyals ($220 billion) was under the budgeted 840 billion, and the 2016 budget deficit came to 297 billion, below the 362 billion in 2015.

 

Oil demand to outstrip supply next year on Opec cuts – IEA

The global oil market will move into deficit as soon as the first half of 2017 if Opec and countries outside the cartel successfully execute the global supply pact agreed in recent days.

The International Energy Agency, the Paris-based global energy advisory body, said in its monthly report that the planned output cuts could lead to demand outstripping supply by as much as 600,000 barrels a day.

“If Opec promptly and fully sticks to its production target, assessed at 32.7m b/d, and non-OPEC producers deliver the agreed cuts of 558,000 b/d outlined on 10 December, then the market is likely to move into deficit in the first half of 2017 by an estimated 0.6 mb/d.”

The IEA’s closely watched monthly report is the first major assessment of the oil market’s supply demand balance since Opec first agreed to reduce production on November 30.

Previously the agency had forecast the oil market would not move into deficit until the second half of 2017 at the earliest, with the prospect of the market remaining in surplus for a fourth straight year.

Iran Warns Of “World War, The Destruction Of Israel”, If Trump Tears Up Nuclear Pact

Ten days ago, we reported that as a result of Obama’s vow to extend the Iran Sanctions Act for another 10 years, Iran threatened to retaliate, saying it violated last year’s deal with six major powers that curbed its nuclear program.

While US officials said the ISA’s renewal would not infringe on Obama’s landmark nuclear agreement (which may or may not be voided by Trump), and under which Iran agreed to limit its sensitive atomic activity in return for the lifting of international financial sanctions that harmed its oil-based economy, senior Iranian officials took odds with that view. Iran’s nuclear energy chief, Ali Akbar Salehi, who played a central role in reaching the nuclear deal, described the extension as a “clear violation” if implemented.

“We are closely monitoring developments,” state TV quoted Salehi as saying. “If they implement the ISA, Iran will take action accordingly.” Iran’s most powerful authority, the Supreme Leader Ayatollah Ali Khamenei, warned in November that an extension of U.S. sanction would be viewed in Tehran as a violation of the nuclear accord.

To be sure, that was merely jawboning by Iran, which has far less leverage and far more to lose if it antagonizes Washington and provokes the US into reimposing sanctions upon the Gulf nation, amounting to the tune of over 1 million barrels per day in foregone oil exports that would be taken offline, should the US impose similar sanctions as those which took the country’s crude export production largely offline in the 2013-2015 timeframe.

It is also the lesser of Iran’s worries: a far bigger concern is whether Trump will tear up Obama’s landmark nuclear agreement.

Overnight US Market :Dow Closed +40 points

Stocks closed mixed Monday as the Dow hit a new all-time high and as oil prices jumped after several non-OPEC countries agreed to join the cartel in cutting output and as investors focused on interest rates. The S&P 500 and Nasdaq snapped 6-day winning streaks and retreated from record highs.

Investors were also focusing on interest rates as Federal Reserve  policymakers meet this week and most economists expect the Fed to announce a rate hike at the conclusion of the 2-day meeting on Wednesday.

The Dow Jones industrial average rose 39.58 points, or 0.2%, to a record close of 19,796.43, according to preliminary calculations. The Standard & Poor’s 500 index fell 0.1% to 2256.96,  after rising in early trading to set a new intraday record. The Nasdaq composite index dropped fell 0.6% to 5412.54.

Energy stocks got a boost as the price of U.S. benchmark crude oil jumped 2.6% to $52.83 a barrel as oil-producing countries outside of OPEC agreed to reduce production by 558,000 barrels per day. That comes after OPEC countries agreed in November to reduce production by 1.2 million barrels per day.