The Organisation of Petroleum Exporting Countries (OPEC) has ended talks in Vienna without a deal on oil production cuts. The size of Russia’s contribution remained a sticking point before further talks today.
Saudi Arabia’s Energy Minister Khalid Al-Falih said he was not confident of an agreement after discussions of a combined one million barrel-a-day output reduction concluded without a consensus.
That left the oil market dangling in uncertainty before non-OPEC allies joined a second day of talks yesterday.
“Not everybody is ready to cut equally,” Al-Falih told reporters in Vienna. “Russia is not ready for a substantial cut,” he said.
Oil in London tumbled as much as 5.2 per cent to $58.36 a barrel, before paring losses to $59.34.
Minister of State, Petroleum Resources Ibe Kachikwu, said the country cannot exceed 800,000 barrels per day or at most one million barrels per day, in view of the current state of the global oil industry.
He said global oil industry is currently challenged as prices went down as low $65 per barrel at the market.
Dr. Kachikwu said: “I do not see Nigeria exceeding 800,000 barrels or one million barrels per day, as the industry is industry is challenged today by factors that are beyond immediate solution. Prices have gone down to $61 per barrel, far from what it used to be in recent times.”
The minister said prices of oil should be around $65 per barrel or $67, urging everybody to contribute their quota to the growth of the market.
Kachikwu said: “Everybody should see his or her self-contributing to the industry positively. The bigger the size of the industry, the more difficult it is to contribute to and also the smaller the size of the sector is, the easier it is to contribute to its development.”
OPEC conference President Suhail Mohamed Al Mazrouei, has acknowledged the receipt of Qatar’s notice to withdraw from the membership of the organisation from January 1.
Al Mazrouei, who is also the UEA, Minister of Energy and Industry, made this known in his opening address at the 175th meeting of the OPEC conference in Vienna, Austria.
A statement by the group reads: “It should also be noted that the Organisation has received a letter from the state of Qatar giving notice of its intention to withdraw from its membership of OPEC, pursuant to Article 8 of the OPEC Statute, with effect from 1 January 2019.”
The Kingdom’s dependence on Russia shows how much OPEC has changed since 2016, when the two countries ended their historic animosity and started to manage the 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.
“The impression that the group can’t really come to a decision without first checking with Moscow is going to be difficult for some members to swallow,” said Derek Brower, a director at consultant RS Energy Group.
“The market won’t care if tomorrow they manage a sizable cut with proper metrics, but that’s still a big if,” he said.
Earlier yesterday, ministers were discussing a proposal to curb combined OPEC and non-OPEC output by about 1 million barrels a day, said a delegate. That was in line with Saudi Arabia’s preference for a moderate reduction that wouldn’t “shock the market.”
The group is under pressure after a collapse in oil prices last month. Saudi Arabia, the largest producer in the cartel, is seeking to walk a fine line between preventing a surplus next year and appeasing President Donald Trump. Striking that balance got even trickier as the United States (U.S.) government data showed the shale boom turned the country into a net oil exporter last week for the first time in 75 years.
The summit in Vienna was not the only story yesterday, as ministers sat down at the headquarters of the OPEC, Russian Energy Minister Alexander Novak flew to St. Petersburg to meet President Vladimir Putin to decide on their country’s contribution. If the group’s most important ally in the OPEC+ alliance decides to make a sizable cut, the cartel would follow up
Oil prices rise to $62
Oil prices rose, reversing earlier losses, as investors latched on to positive supply-side drivers for the market, although concern about the wider economy simmered in the background after data pointed to a slowdown in China.
Brent crude oil futures were up 11 cents at $62.81 a barrel. U.S. crude futures were up 14 cents at $53.94 a barrel.
The oil benchmark for Nigeria’s Budget 2019 is $60 per barrel.
Oil industry experts described the rise in crude prices as good for the local economy.
Analysts said a more robust backdrop for financial markets, together with the prospect of slower crude production growth, were the major drivers behind the rally in oil.
“The stock market performance is one of the reasons why oil keeps marching higher. There also seems to be a general belief that the agreed cut in Organisation of the Petroleum Exporting Countries (OPEC)+ production will be sufficient to balance the market,” PVM Oil Associates said in a note.
Global equities fell after data pointed to a slowdown in Chinese economic growth in 2018 to a 28-year low. The numbers fed concern that the outlook for global growth may be darkening, particularly given U.S.-China trade tensions.
But stocks are still up nearly 8 percent so far this month, which in turn has given oil investors more confidence to bet aggressively on a rise in crude prices.
Theresa May survives no-confidence vote
British Prime Minister Theresa May on Wednesday survived a no-confidence vote sparked by the crushing defeat of her Brexit deal just weeks before the UK leaves the European Union.
A stunning 24-hour span saw May on Tuesday dealt the heaviest drubbing by parliament in modern British political history — 432 votes to 202 — over the divorce terms she reached with Brussels.
The opposition Labour Party could try to oust her government again in the hope of triggering snap elections before Britain’s scheduled March 29 Brexit date. And May herself is working on the tightest-possible deadline as Britain prepares to leave the bloc that for half a century defined its economic and political relations with the rest of the world. She has promised to return to parliament on Monday with an alternative Brexit strategy devised through cross-party talks with the opposition.
There is now an assumption among many European diplomats that Brexit will have to be delayed to avoid a potentially catastrophic “no-deal” breakup. May notably refused to rule out the idea when quizzed about it in parliament earlier on Wednesday.
May survived Wednesday thanks to the support of members of her Conservative Party and ruling coalition Northern Irish allies in the Democratic Union Party. But more than a third of the Conservatives and all 10 DUP members of parliament voted against her Brexit arrangements on Tuesday — each for their own reason. May will thus tread carefully as she tries to win over opposition lawmakers — many of whom want to remain in the EU — while also attempting to appease more hardened Brexit-backing coalition partners.
May repeated two key principles — limiting migration and pursuing an independent trade policy — which would rule out Labour hopes of membership of an EU customs union or its single market. But she also hinted at the possibility of delaying Brexit.
Historical defeat: British lawmakers defeats May over Brexit deal
British lawmakers defeated Prime Minister Theresa May’s Brexit divorce deal by a crushing margin on Tuesday, triggering political upheaval that could lead to a disorderly exit from the EU or even to a reversal of the 2016 decision to leave.
Parliament voted 432-202 against her deal, the worst parliamentary defeat for a government in recent British history. Scores of her own MPs – both Brexiteers and supporters of EU membership – joined forces to vote down the deal.
Opposition Labour leader Jeremy Corbyn promptly called a vote of no confidence in May’s government, to be held within 24 hours.
With the clock ticking down to March 29, the date set in law for Brexit, the United Kingdom is now ensnared in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project that it joined in 1973.
May’s crushing loss, the first British parliamentary defeat of a treaty since 1864, marks the collapse of her two-year strategy of forging an amicable divorce with close ties to the EU after the March 29 exit.
“It is clear that the House does not support this deal, but tonight’s vote tells us nothing about what it does support,” May told parliament, moments after the result was announced.
“We need to confirm whether this government still enjoys the confidence of this House,” May said.
May said parliament had spoken and the government had listened. The small Northern Irish DUP party, which props up her minority government and had said it would oppose the deal, said it would still back May in the no confidence vote.
The EU said the Brexit deal remained the best and only way to ensure an orderly withdrawal from the EU.
“The Brexit deal is basically dead,” said Anand Menon, professor of European politics and foreign affairs at King’s College London.
Ever since Britain voted by 52-48 percent to leave the EU in a referendum in June 2016, the political class has been debating how to leave the European project forged by France and Germany after the devastation of World War Two.
While the country is divided over EU membership, most agree that the world’s fifth largest economy is at a crossroads and that its choices over Brexit will shape the prosperity of future generations.
Before the vote, May had warned pro-Brexit MPs that if her plan was rejected, it was more likely that Britain would not leave the EU at all than that it would leave without a deal.
She has also warned fellow Conservatives not to let the opposition Labour Party seize control of Brexit.
Supporters of EU membership cast Brexit as a gigantic mistake that will undermine the West, smash Britain’s reputation as a stable destination for investment and slowly weaken London’s position as a global capital.
Many opponents of Brexit hope May’s defeat will ultimately lead to another referendum on EU membership, though Brexiteers say that thwarting the will of the 17.4 million who voted for Brexit could radicalise much of the electorate.
Brexit supporters cast leaving as a way to break free from a Union they see as overly bureaucratic and fast falling behind the leading economic powers of the 21st century, the United States and China.
Kenya: Somali Islamists, al Shabaab bombs hotel, attack workers
Gunmen blasted their way into a hotel and office complex in the Kenyan capital on Tuesday, sending workers fleeing for their lives as others cowered under their desks from an attack claimed by Somali Islamists al Shabaab.
At least one person was killed and eight wounded, hospital officials said. Police warned the “terror attack” may still be ongoing, with the assailants still inside the upscale 14 Riverside Drive complex.
“The main door of the hotel was blown open and there was a human arm in the street severed from the shoulder,” said Serge Medic, the Swiss owner of a security company who ran to the scene to help civilians when he heard of the attack from his taxi driver.
Medic, who was armed, entered the building with a policeman and two soldiers, he said, but they came under fire and retreated. An unexploded grenade lay in the lobby, he said.
“One man said he saw two armed men with scarves on their head and bandoliers of bullets,” Medic told Reuters, as gunfire echoed in the background, more than two hours after the attack began.
A woman shot in the leg was carried out and three men emerged covered in blood. Some office workers climbed out of windows. Many told Reuters that they had had to leave colleagues behind, still huddled under their desks.
“There’s a grenade in the bathroom,” one officer yelled as police rushed out from one building.
“We heard a loud bang from something that was thrown inside. Then I saw shattered glass,” Geoffrey Otieno, who works at a beauty salon in the complex, told Reuters. “We hid until we were rescued.”
Kenya has often been targeted by al Shabaab, who killed dozens of people in a shopping centre in 2013 and nearly 150 students at a university in 2015.
“We are behind the attack in Nairobi. The operation is going on,” said Abdiasis Abu Musab, the group’s military operations spokesman.
According to its website, 14 Riverside is home to the local offices of international companies including BASF, Colgate Palmolive, Reckitt Benckiser, Pernod Ricard, Dow Chemical and SAP, as well as the dusitD2 hotel, part of the Thai hotel group Dusit Thani.
The Australia embassy is across the road from the compound. Kenya is an expatriate hub for diplomats, aid workers, businessmen and others operating around east Africa.
“I just started hearing gunshots, and then started seeing people running away raising their hands up and some were entering the bank to hide for their lives,” a woman working in a bank in the complex said, adding she had heard two explosions.
Kenyan television featured appeals for blood from local hospitals and showed police cordoning off the route to ensure vehicles could move quickly. Red Cross ambulances ferried victims away.
Al Shabaab says its attacks in Kenya are revenge for Kenyan troops stationed inside Somalia which has been riven by civil war since 1991.
The Kenyan troops, concentrated in the south, originally went into Somalia to try to create a buffer zone along the border. They are now part of an African Union peacekeeping force supporting the weak U.N.-backed central government.
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