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Growing Oil Prices in Asia

(AFP) / 19 June 2013

Oil prices turned higher in Asian trade Wednesday, as investors await the outcome of a US Federal Reserve meeting for clues on when it will begin scaling back its massive stimulus programme.
New York’s main contract, light sweet crude for delivery in July, was up 17 cents to $98.61 a barrel and Brent North Sea crude for August delivery added 12 cents to $106.14 in the afternoon.

Markets have been in turmoil for weeks on speculation the US central bank will announce a tightening of its $85 billion-a-month asset-buying programme, known as quantitative easing.

“Trading is quiet today as investors are looking to the US Fed meeting for direction,” Desmond Chua, market analyst at CMC Markets in Singapore, said.

“If the US Fed decides on a more gradualist approach to tapering quantitative easing, that is likely to push oil prices up,” he said.

The US Fed’s Federal Open Market Committee will issue a statement later on Wednesday after a two-day policy meeting, which will be quickly followed by a briefing from Fed chairman Ben Bernanke.

Some analysts say Bernanke would likely signal the Fed is close to tapering the purchases, but would temper that by arguing that a move would depend on conditions in the world’s largest economy. A mixed bag of US data recently has pointed to an uncertain recovery.

Leaders from the influential Group of Eight nations on Tuesday called for a peace conference for the country and agreed to push for a transitional government that could include defectors from President Bashar Al Assad’s regime.

Source: Khaleej Times

Record increase on Abu Dhabi Oil Prices

Haseeb Haider / 20 June 2013

Abu Dhabi grew 7.7 per cent year on year in 2012, on higher oil prices. “The flexibility of Abu Dhabi economy combined with the huge financial surpluses, strong growth in non-oil sectors, high oil prices, along with several other significant factors have all contributed to the stability and sustained growth of the local economy,” said Statistics Centre – Abu Dhabi, or Scad.
Abu Dhabi’s GDP at current prices reached a record Dh911.6 billion in 2012, up from Dh846.7 billion in 2011, according to a report released by Scad.

The preliminary data announced by the statistical gathering agency also indicate a rise in the annual growth rate of non-oil sectors to 9.6 per cent, surpassing all earlier forecasts and estimates, underlining the “robustness, stability and competitive advantage of the economy, boosting its appeal to local and foreign investors.”

Abu Dhabi showed a significant growth in oil and non-oil sectors at current prices achieved a net gain of Dh64.9 billion, surpassing all forecasts and estimates. The GDP time series indicates that the Abu Dhabi GDP at current prices has doubled 2.4 times from 2005 to 2012, increasing form Dh383.430 billion to Dh911.591 billion during this period.

The non-oil activities and sectors contributed about 43.5 per cent of Abu Dhabi’s GDP at current prices in 2012, and 48 per cent at constant prices for the same year.

The non-oil activities achieved high growth rates of about 9.6 per cent at current prices and 7.7 per cent at constant prices over the past year.

There has been an upward trend in non-oil activities over the course of the past few years, with the non-oil GDP at constant prices growing from Dh200.209 billion in 2005 to Dh325.433 billion in 2012.

Abu Dhabi has made huge strides and achieved a high level of diversity in a short span of time becoming a business hub. for concluding major business deals.

Buoyed by oil revenues going into infrastructure, in recent years Abu Dhabi economy has advanced in leaps and bounds and has evolved into regional, financial, commercial and tourist hotspot.

Oil accounted for 56.5 per cent of the Abu Dhabi’s GDP at current prices and only for 52 per cent of the GDP at constant prices in 2012 despite the considerable rise in oil prices during the past years.

The real estate and education sectors grew 15 per cent in 2012, while wholesale and retail trade grew 14.5 per cent, followed by transport and storage 13.4 per cent.

Manufacturing activities achieved a record growth rate of 11.2 per cent followed by the electricity, gas, and water by10.1 per cent.

Source: Khaleej Times

Oil Prices Falls – US Economy

Oil prices fell Thursday, a day after the Federal Reserve indicated it could begin to wind down its massive stimulus program later this year, as long as the US economy remains on the upswing.
U.S. benchmark oil for July delivery fell $2.08 to $96.16 per barrel by late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange.

The contact dropped 20 cents to finish at $98.24 a barrel on the Nymex on Wednesday, when Fed chairman Ben Bernanke suggested that he was optimistic about the U.S. economy — and that the Fed might start scaling back its massive $85 billion a month government bond purchases later this year if conditions continue to improve.

The Fed’s stimulus program has been a boon to stock and commodities markets, where investors have turned in search of returns that outgun those on bonds.

Analysts said the slump in oil prices could be just a short-term response to a change in U.S. central bank policy. In the medium term, the scaling back of such a loose monetary policy will be “a positive for the oil market, suggesting that the economy is on a sustainable growth trajectory,” said Caroline Bain, lead commodities analyst for The Economist Intelligence Unit.

Separately, the American Petroleum Institute said U.S. crude stocks fell by about 4.3 million barrels for the week ending June 14 to 362 million barrels. That contrasted with figures given by the U.S. Energy Information Administration, which said that crude inventories grew by 300,000 for the week. Analysts expected supplies to drop by 1 million barrels.

Brent crude, a benchmark for many international oil varieties, fell $1.80 to $104.32 a barrel on the ICE Futures exchange in London.

Source: Khaleej Times

Brent oil futures rebounded above $105 a barrel

Brent crude was up 32 cents at $105.27 a barrel at 1000 GMT on Friday, on track to end the week marginally higher

London: Brent oil futures rebounded above $105 (Dh386) a barrel on concern over the war in Syria and continuing weakness for the dollar.

Though Syria is not key to global oil supply, investors are worried that escalation in the civil war could drag in other countries and plunge the whole oil-producing region into conflict.
“Crude oil has been trading in a range for more than a month … With the escalation in Syria, the buying on the dips is probably going to be stronger as the geopolitical premium needs to be increased,” Petromatrix analyst Olivier Jakob said.
Brent crude was up 32 cents at $105.27 a barrel at 10am GMT on Friday, on track to end the week marginally higher.

The contract has rebounded from a weekly low of $101.82 on Tuesday, partly driven by a weaker dollar.
US oil was 27 cents higher at $96.95 a barrel, trading at the highest level in nearly a month, and was also set to rise slightly on the week.

President Barack Obama authorised the shipment of US weapons to Syrian rebels for the first time after the White House said it had proof that the Syrian government used chemical weapons against rebels.
“We’re seeing the Syrian situation worsen … all the foreign backers are upping their stakes in Syria and none of them can really be sure what the consequences will be,” Richard Mallinson, a consultant at Energy Aspects, said.
IRAN SANCTIONS

In other geopolitical news, millions of Iranians voted to choose between six candidates to replace incumbent president Mahmoud Ahmadinejad, but none is seen as challenging the Islamic Republic’s 34-year-old system of clerical rule.
Analysts say the outcome is unlikely to have any short-term impact on oil because any improvement in relations with the West over Iran’s nuclear programme will take time to translate into a change in policy.
“Sanctions on oil are probably going to be among the last [issue] to be addressed, because they are the biggest lever the West has,” Mallinson said.
Oil has risen this week in spite of forecasts of “sluggish” demand growth by industry bodies such as the International Energy Agency.

“The key driver of oil has been the weakness in the dollar rather than any fundamental factors,” said Ric Spooner, chief market analyst at CMC Markets.
The dollar remained in the doldrums on Friday after hitting a four-month low against a basket of currencies in early trade.

A weaker dollar supports oil by making it cheaper for holders of other currencies.
– Reuters

Source:GulfNews

Sudan to shut South Sudan oil flow

Khartoum: Sudan on Sunday prepared to stop the oil flow from South Sudan on the orders of President Omar Al Bashir but an expert said the process could take weeks.

Bashir said petroleum companies working in South Sudan will be informed about “shutting down the pipeline” from Sunday, the official SUNA news agency reported.

The order came after Sudan’s leader warned the South over backing rebels, who analysts say humiliated the authorities with recent attacks.

South Sudan’s government in Juba denies supporting insurgents in the north.

I think if you do it properly it would take 45 days,” to stop the oil without causing damage, said the independent expert who asked not to be further identified.
“It’s not like opening and closing a water tap.”

At a press conference scheduled for 1100 GMT Sudan’s Information Minister Ahmad Bilal Osman was expected to comment further on relations with South Sudan.

This will be the second closure of South Sudan’s oil wells and the Sudanese pipeline system in about 18 months.
Production had only resumed in early April after the two countries agreed on detailed timetables to normalise relations, after intermittent border clashes, by implementing the oil deal and eight other security and economic pacts.
In early 2012 the South stopped its crude production after accusing Khartoum of theft in a dispute over export fees.
The previous shutdown “went very well”, the expert said, adding Sudan’s oil ministry has enough experience to safely close the system and its pipeline running 1,500 kilometres to the Port Sudan terminal.

Thousands of wells on the South Sudanese side will need to be shut one by one and the pipeline flushed, he said.
“You need to evacuate the oil somewhere,” the expert said.

“If they do not do that properly the oil will gel. It’s not easy to reverse it to liquid again.”
The expert was not sure what point the oil had reached in the pipeline but said “it should be close to Port Sudan”.
Bashir warned on May 27 that he would block the oil if the South’s government provides assistance to rebels fighting in South Kordofan and Blue Nile states, or in the Darfur region.

Khartoum has long accused South Sudan of supporting rebels in the north, a complaint which for months held up implementation of the oil and security pacts.
Bashir’s late-May threat came at a ceremony following the army’s recapture of Abu Kershola in the far north of South Kordofan.
Rebels held Abu Kershola and its garrison for a month after seizing it during a coordinated attack on several areas including the strategic and previously peaceful town of Umm Rawaba in North Kordofan.
Analysts called the initial attack a humiliation for the authorities.

More recently there were very strong rumours that the “liberation” of Abu Kershola only resulted from a withdrawal by rebels of the Sudan Revolutionary Front coalition, one Sudan analyst told AFP.
“The problem is that nobody has seen any evidence” of continued South Sudanese support to the insurgents, the analyst said.

“They (Sudan) have their own internal difficulties and they want to use South Sudan as a scapegoat,” South Sudanese Information Minister Barnaba Marial Benjamin told AFP .
South Sudan split from Sudan in July 2011 in the wake of a referendum vote for independence under a peace deal that ended a 22-year civil war.

Independence left key issues unresolved, including how much the landlocked South should pay for shipping its oil through Sudan’s export infrastructure.

In a March report the Small Arms Survey, a Swiss-based independent research project, said it found no evidence of weapons supplies from Juba to the Sudan People’s Liberation Movement-North (SPLM-N) after the South’s independence.
“There are, however, some reports that both SPLM-N and JEM are benefiting from other kinds of assistance,” including logistics, fuel and food, the report said.

SPLM-N has been fighting for two years in South Kordofan and Blue Nile states.

Analysts say they have been assisted by JEM, the Justice and Equality Movement of Darfur.

Source: Gulf News

UAE equities rebound in low trade

Markets in the UAE resumed gains on Tuesday, although trading was volatile as an early-year surge in share prices faltered.

Dubai’s index rose 0.6 per cent, having been down as much as 0.9 per cent in early trade. That initial drop followed a 2.3 per cent decline on Monday, Dubai’s largest in 15 months, but low volumes — less than 20 million shares changed hands in the opening 30 minutes, considerably below recent norms — indicated that few investors were willing to sell at those prices.

Trading then picked up as stocks rebounded. The DFM General Index rose 0.6 per cent to 2,358 points. Abu Dhabi main index climbed 0.3 per cent to 3,567 points. “The market, as expected, is volatile and there’s no clear trend at the moment,” said Sebastien Henin, portfolio manager at The National Investor. Dubai is up 45.3 per cent in 2013 and Abu Dhabi has gained 35.6 per cent over the same period, with this surge likely to give way to more sustained profit taking eventually.

A potential trigger for a sell-off may be MSCI’s decision on whether to upgrade the UAE and Qatar to emerging market status. The index complier will announce its verdict at 2100GMT. “The market will correct whether we get upgraded by MSCI or not — it’s more of a short-term consolidation period as we come closer to the summer,” said Musa Haddad, head of investment advisory services at National Bank of Abu Dhabi.

“The market still looks very strong, volumes are positive and liquidity is available, which shows the longer-term upward trend isn’t about to change.”

MSCI has opted against upgrading the UAE and Qatar from frontier markets classification on multiple occasions since 2009, but traders are hopeful the UAE will make the cut this time following market reforms. An upgrade would likely attract additional foreign money to UAE stocks, although the country’s weighting on MSCI’s emerging market index would be less than one per cent so the impact could be limited.

“The big question is how the market would react after the announcement,” added Henin.

Long-term investors will likely use any market pull-back to accumulate shares at lower prices, said NBAD’s Haddad. “We expect the market to have further upside this year, but at this point in time it will be in a consolidation phase,” he said.

Emaar Properties was Dubai’s main support, rising 0.7 per cent.

Emirates NBD fell 1.9 per cent. Dubai’s largest bank said on Tuesday it had completed the acquisition of BNP Paribas’ Egyptian assets after receiving regulatory approval in the North African country.

Egypt’s bourse rose 1.5 per cent from Monday’s 10-month low, ending a seven-session losing streak. Trading fell to a week-low, with investors wary due to ongoing political instability in the Arab world’s most populous country.

Protesters are preparing for mass demonstrations on June 30 to mark President Mohamed Mursi’s one-year anniversary in office. “Egypt’s market is driven by political factors and whenever politics is the main driver, we would rather stay away,” added Haddad. —

 

Source: Khaleej Times

Petronas to spend $16 billion on Canadian facility

Malaysian national oil company Petronas says it expects to spend up to $16 billion to build a liquefied natural gas export facility in western Canada.

Arif Mahmood, Petronas vice president of corporate planning, says the company will invest between $9 billion and $11 billion to construct two LNG liquefaction plants.

Another $5 billion will be invested in a 750 kilometer-long pipeline, to be built by TransCanada Corp., to supply gas to the two plants, he said Tuesday in an email to The Associated Press.

The Pacific Northwest LNG project, located on Lelu Island in the Port Edward district, will liquefy and export natural gas produced by Progress Energy Canada. Both companies are owned by Petronas, which secured its first LNG buyer, Japan Petroleum Exploration Co.

Source: Khaleej Times

Dubai SME100 rankings Nominations up 171 percent

Dubai SME on Tuesday announced that nearly 3,000 small and medium enterprises have been nominated for the 2013 Dubai SME100 rankings, with their estimated output pegged at over Dh53 billion.

The nominations represent a 171 per cent increase over the 1,092 SMEs nominated for the 2011 ranking. Sector-wise, 53 per cent of SMEs nominated are from the trading sector, 36 per cent from services and 11 per cent from manufacturing.

“The Government of Dubai has launched various initiatives aimed at promoting entrepreneurship and SME development under its SME five-year plan. This commitment to promote entrepreneurship and SMEs is in the DNA of Dubai, supported and led by our socio-economic stability, openness and visionary leadership. Dubai has moved to the next level of growth, and in our renewed dynamism and development outlook, SMEs play a strategically significant role in creating new value-add to the economy of Dubai and the UAE,” Sami Al Qamzi, director-general of Dubai Department of Economic Development, said in a statement.

“Over 95 per cent of the businesses in Dubai today are small and medium enterprises. Together, SMEs constitute the largest reserve of knowledge, innovation and human capital in the UAE as well as a significant contributor to the nation’s GDP. The Dubai SME 100 initiative provides an added incentive for SMEs to keep growing. They will definitely feel encouraged to think outside accepted parameters, push their creativity and thus achieve their unique goals.”

Dubai SME100 identifies the top-performing SMEs in Dubai to help groom them into bigger and more sustainable enterprises, and support them through their growth into larger, internationally-oriented companies.

Post ranking, the SMEs are given specialised capability development training in such critical areas as investment development, corporate governance, valuation, legal support and risk management. The ranking is valid for two years.

“We are delighted at the substantial increase seen in Dubai SME100 applications compared to 2011. It shows the level of interest in the ranking and its growing market recognition. We hope that more SMEs will apply for the ranking as it will help them gain greater value in the market, as demonstrated by the 2011 batch of Dubai SME100 companies,” Dubai SME CEO Abdul Baset Al Janahi said.

 

 

Source: Khaleej Times

Oil prices up in Asia after upbeat US jobs data

Oil prices rose in Asian trade Monday as moderate growth in new jobs in the United States raised hopes about a pick-up in demand in the world’s biggest crude consumer, analysts said.

New York’s main contract, West Texas Intermediate for delivery in July, gained five cents to $96.08 a barrel and Brent North Sea crude for July added three cents to $104.59 in the afternoon.

“At this moment, the crude market is driven by the positive sentiment about job creation in the United States, which points towards a growing economy,” Desmond Chua, market analyst at CMC Markets in Singapore, said.

US Labour Department figures released Friday showed 175,000 jobs were generated in May, despite worries that huge government spending cuts would lead to a slowdown in hiring.

The numbers for May were a firm gain from April’s 149,000 rise, though still below the 193,000-a-month January-April average.

The jobs data, which came after several lacklustre US economic reports last week, also boosted hopes the Fed will hold off any moves to rein in its monetary easing programme any time soon.

 

 

Source: Khaleej Times