Saudis

Saudis back modest OPEC+ output cut, so no shock to market
Delegates say a consensus is emerging around an overall cut of around 1m barrels a day, although the figure isn’t final By BLOOMBERG VIENNA • Saudi Arabia proposed a moderate oil-production cut from OPEC and its allies that would nudge the market back into balance, seeking to walk a fine line between preventing a surplus and appeasing US President Donald Trump. “We, in the kingdom, are going to be advocating something adequate to balance the market,” Energy Minister Khalid Al-Falih told reporters at the opening session of the group’s meeting in Vienna yesterday. A cut of about one million barrels a day (bpd) from the whole group should be adequate and “certainly we don’t want to shock the market”. Events in the Austrian capital weren’t the only story yesterday. As ministers sat down at the headquarters of the OPEC, Russian Oil Minister Alexander Novak flew to St Petersburg to meet Russian President Vladimir Putin to decide on their country’s contribution. If the group’s most important ally in the broader OPEC+ coalition decides to make a sizeable cut, the cartel will follow up. Saudi Arabia is equally prepared for a deal or no-deal situation, Al-Falih said. “If everybody is not willing to join and contribute equally, we will wait until they are.” Oil fell after the remarks, losing US$2.90 to US$58.66 (RM244.61) a barrel at 10:37am in London yesterday. Saudi Arabia, OPEC’s de facto leader, has made clear that it won’t shoulder the burden of trimming production alone. In private conversations, delegates said a consensus was emerging around an overall cut, including Russia, of around one million bpd, although all cautioned the figure wasn’t final. The wait for Moscow signals how much OPEC has changed since 2016 when Saudi Arabia and Russia ended their historic animosity and started to manage the oil market together. The alliance has transformed OPEC into a duopoly in which Russia, which isn’t a formal member of the cartel but part of the production cuts alliance, is asserting its power. While Middle Eastern producers are desperate to reverse the recent slump in prices to pay for government spending, sensitivities are different in Russia, where the government is running a budget surplus and a weak ruble mitigates the impact of lower prices. The government is concerned about the impact of higher prices on Russian consumers, stoking discontent with economic policy, according to one Kremlin official. US Opposition A day of preliminary talks in the Austrian capital on Wednesday concluded with a panel led by Saudi Arabia and Russia recommending an output reduction lasting six months, but the committee didn’t discuss how big any cuts should be. Al-Falih said his preference was for a reduction extending into the third quarter. The group may agree a formal cut of under a million bpd, Nigeria’s Oil Minister Emanuel Kachikwu said in a TV interview yesterday morning. OPEC is also contending with vociferous opposition from the US president, who’s taken to using his Twitter account to berate the group’s policies and sees low oil prices as key to sustaining America’s economic growth. While ministers met in OPEC’s Vienna headquarters on Wednesday, Trump tweeted that the “world does not want to see, or need, higher oil prices!” “I’m cautiously optimistic that a deal gets done, but the devil will be in the detail,” said Mohammad Darwazah, a director at Medley Global Advisers. “How OPEC communicates this to the market may be just as important as what gets done.” Although Russia, the largest producer in the wider group known as OPEC+, agreed to a cut in principle, the eventual size of their contribution remains undefined and will be key to putting together the final deal. In private conversations earlier this week, OPEC delegates said that Saudi Arabia had favoured a Russian cut of about 300,000 bpd, but Moscow was seeking a smaller reduction of about 150,000, said people familiar with those talks. Those differences persisted after Wednesday’s meeting, OPEC delegates said. Russia’s second-largest oil producer, Lukoil PJSC, is ready to comply with any request from the Kremlin but hopes output cuts won’t be necessary, said CEO Vagit Alekperov. “I hope that maybe these measures won’t be necessary,” he said in an interview with Bloomberg Television in Vienna. An oil price around US$60 suits the needs of producers and consumers, and it should remain at that level in January, he said. If Russia does agree a cut, it would take three to four months to fully implement it, he said. Iranian Exception Iran is currently subject to US sanctions and as such won’t participate in any curbs, the country’s Oil Minister Bijan Zanganeh said. The last time the OPEC+ group agreed to curtail output, in late 2016, it settled on a combined 1.8 million-bpd reduction. In preparatory meetings ahead of this week’s summit, delegates had said a cut of as much as 1.3 million bpd next year is needed as demand growth slows and US shale production surges. Resolving the group’s internal differences and convincing a sceptical oil market that they’re serious about preventing a new supply glut in 2019 would require ministers to conclude weeks of debate and settle on a final figure. “Some countries will struggle because their economies are very constrained” and Nigeria itself could only manage a small cut, Kachikwu said. var VUUKLE_EMOTE_SIZE = "90px"; VUUKLE_EMOTE_IFRAME = "180px" var EMOTE_TEXT = ["HAPPY","INDIFFERENT","AMUSED","EXCITED","ANGRY","SAD"]The post Saudis back modest OPEC+ output cut, so no shock to market appeared first on The Malaysian Reserve. [...]
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Saudi’s daily output reaches record as Trump presses for cheaper oil
By BLOOMBERG LONDON • Saudi Arabia is pumping more crude than at any time since its first barrel was extracted 80 years ago, responding to pressure from US President Donald Trump to keep driving oil prices lower. Saudi daily output reached 11.2 million barrels a day, from 10.8-10.9 million barrels earlier this month, according to a person familiar with the matter, who asked not to be identified because the data is private. While Brent crude, the global benchmark, already tumbled as much as 33% since early October, Trump a week ago tweeted: “Thank you to Saudi Arabia, but let’s go lower!” The surge in Saudi supply comes two weeks before the kingdom and its allies in the OPEC+ group meet in Vienna to set policy for 2019. Negotiations have already started and will likely intensify later this week at the Group of 20 (G-20) summit in Buenos Aires, where the leaders of Saudi Arabia and Russia and their oil ministers are scheduled to meet. The two nations are the world’s biggest crude exporters. “In the past, G-20 summits have provided the opportunity to negotiate informally the broad contours of the production agreements that OPEC+ members have later ratified,” Amrita Sen, chief oil analyst at Energy Aspects Ltd in London, said in a note to clients. Brent fell last week to a one-year low of US$58.41 (RM244.76) a barrel, down from a four-year high of US$86.74 in early October. Prices have slumped as the US, Saudi Arabia and Russia increase supply close to a record, at a time when traders are fretting about slowing growth in demand in emerging markets, particularly in Asia. Trump has repeatedly used Twitter to ask Saudi Arabia and other OPEC members to boost production. In January, Saudi production was below 10 million barrels. More recently, Trump has compared lower oil prices to a tax cut and a tool to keep inflation low, giving the US Federal Reserve the opportunity to stop raising interest rates. Saudi output has also been rising as the kingdom seeks to ensure enough supply as Iranian exports slump following the re-imposition of US sanctions. Buyers of Saudi crude ordered more barrels in early October to guard against a sudden plunge, although in the end the US administration granted more waivers than anyone was expecting. It’s unclear whether Riyadh plans to keep boosting output and a Saudi oil official declined to comment. The surge this month also means that the kingdom is effectively setting a high baseline for any future cut in output. Saudi Arabia has already said it supports a drop in output and has pledged to reduce oil exports by 500,000 barrels a day in December, compared to November. Key decision makers will be at the G-20 summit in Buenos Aires later this week, in a meeting that may well decide the direction of oil prices in 2019. Saudi Crown Prince Mohammed Salman and Russian President Vladimir Putin, who have been working together to manage the oil market for the past two years, both plan to be in the Argentinian capital. “Both have a common interest in seeing a production cut to mitigate the potential future surplus created by the mismatch between the rise in OPEC+ output and the volume of waivers issued for Iranian oil,” Jeffrey Currie, the head of commodities research at Goldman Sachs Inc, told clients in a note. Resisting Trump’s desire for lower oil prices would require the Saudi crown prince to go against the White House, just after the president publicly backed him following the killing of Saudi national and Washington Post columnist Jamal Khashoggi. Khalid Al-Falih and Alexander Novak, the Saudi and Russian energy ministers, are also scheduled to travel to Buenos Aires, according to people familiar with their plans. Their presence reinforces the impression that Saudi Arabia and Russia will try to reach a deal before the OPEC meeting a few days later. “We believe OPEC+ countries will come to an agreement despite recent tweets from the US arguing for lower oil prices,” Currie wrote. var VUUKLE_EMOTE_SIZE = "90px"; VUUKLE_EMOTE_IFRAME = "180px" var EMOTE_TEXT = ["HAPPY","INDIFFERENT","AMUSED","EXCITED","ANGRY","SAD"]The post Saudi’s daily output reaches record as Trump presses for cheaper oil appeared first on The Malaysian Reserve. [...]
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Saudis implicate royal advisor, top spy in Khashoggi killing
By BLOOMBERG RIYADH • A Saudi royal advisor and a senior intelligence official played key roles in the mission that ultimately led to the killing of government critic Jamal Khashoggi and authorities will seek the death penalty for five people who confessed to the murder. Eleven people out of the 21 held in the case have been charged over Khashoggi’s murder at the Saudi consulate in Istanbul on Oct 2, deputy attorney general Shaalan Shaalan said in a televised news conference on the case. Crown Prince Mohammed Salman, who runs the day to day affairs of the world’s top oil exporter, had no knowledge of the mission, he added. The killing of Khashoggi has provoked a global outcry and tarnished the reputation of the 33-year-old young prince. Saudi Arabia stuck by its earlier narrative that the Washington Post columnist was killed after a mission to abduct him went awry. The deputy chief of intelligence ordered that Khashoggi be brought back to the kingdom, Shaalan said. The team killed him after the talks failed and his body was handed to a collaborator in Turkey, he added. Asked whether Saud al-Qahtanti, an aide to Prince Mohammed, had any role in the case, Shaalan said a royal adviser had a coordinating role and had provided information. The former advisor is now under investigation, the prosecutor said, declining to reveal the names of any of those facing charges. The prosecution “demands the death penalty for those who ordered and executed the killing and they’re five people”, he said. var VUUKLE_EMOTE_SIZE = "90px"; VUUKLE_EMOTE_IFRAME = "180px" var EMOTE_TEXT = ["HAPPY","INDIFFERENT","AMUSED","EXCITED","ANGRY","SAD"]The post Saudis implicate royal advisor, top spy in Khashoggi killing appeared first on The Malaysian Reserve. [...]
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US sanctions 17 Saudis over killing of journalist Khashoggi
WASHINGTON (Nov 15): The US Treasury imposed sanctions on 17 Saudi officials on Thursday for their role in the killing last month of Jamal Khashoggi... [...]
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Saudi’s PIF marks Tesla as its latest high-profile bet
DUBAI • Saudi Arabia’s purchase of a stake of about US$2 billion (RM8.14 billion) in Tesla Inc is only the latest high-profile investment by its sovereign wealth fund since 2016. The Public Investment Fund (PIF) built up less than 5% stake in the electric carmaker in recent months, according to a person familiar with the matter, just as Elon Musk considers taking the company private. PIF’s move comes as it seeks to turn into a US$2 trillion powerhouse and help diversify Saudi Arabia’s oil-dependent economy. Here’s a selection of PIF’s recent investments and holdings: Uber PIF invested US$3.5 billion in US rideshare company Uber Technologies Inc in June 2016. PIF MD Yasir Al-Rumayyan took a board seat at the San Franciscobased company after the deal, which valued Uber at US$62.5 billion. At the time it was the biggest infusion of cash into Uber from a single investor. Virgin The fund announced plans in October 2017 to invest about US$1 billion in Virgin Group’s space companies, Virgin Galactic, The Spaceship Co and Virgin Orbit. PIF also holds an option to invest an additional US$480 million in Virgin’s space services. Saudi Arabia plans to support the ventures’ plans for human spaceflight and launching satellites into orbit, and may cooperate with Virgin to create a space-centric entertainment industry in the country. Blackstone funds PIF agreed to commit US$20 billion in May 2017 to an infrastructure investment fund with Blackstone Group LP, the world’s biggest private-equity manager. Blackstone plans to raise the same amount from other investors and with leverage, the New York-based asset manager expects to have more than US$100 billion in purchasing power for infrastructure projects, primarily in the US. SoftBank Saudi Arabia and SoftBank Group Corp announced the first close of an almost US$100 billion technology fund, the largest ever, in May 2017 secured from backers led by PIF and the Japanese company. PIF didn’t disclose the size of its investment, but Crown Prince Mohammed Salman said he might invest up to US$45 billion in the fund over five years. Apple Inc, Qualcomm Inc, Foxconn Technology Group and Sharp Corp also put in capital. Separately, PIF also owns stakes in some of Saudi Arabia’s biggest companies on behalf of the government, which include Saudi Basic Industries Corp, Saudi Basic Industries Corp, Saudi Telecom Co, National Commercial Bank, Saudi Arabian Mining Co and Samba Financial Group. — Bloomberg var VUUKLE_EMOTE_SIZE = "90px"; VUUKLE_EMOTE_IFRAME = "180px" var EMOTE_TEXT = ["HAPPY","INDIFFERENT","AMUSED","EXCITED","ANGRY","SAD"]The post Saudi’s PIF marks Tesla as its latest high-profile bet appeared first on The Malaysian Reserve. [...]
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Saudis will be surprised KSCIP no longer operating — Najib
KUALA LUMPUR (Aug 7): Former Prime Minister Datuk Seri Najib Tun Razak claimed that Saudi Arabia will be taken by surprise following Malaysia’s move to... [...]
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