The Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), Dr. Mohammad Barkindo, has said the exporting group is not in the business of fixing oil prices.
This is coming as the group and its allies such as Russia have set up a new alliance but decided against creating a formal body to avoid falling victims to the United States anti-cartel legislation. A committee of the United States House of Representatives had last Thursday approved anti-cartel legislation, known as the ‘No Oil Producing and Exporting Cartels Act’, or NOPEC, that would open up the members of OPEC to antitrust lawsuits.
Reacting to this legislation, Barkindo told Reuters yesterday that: “OPEC is neither a cartel nor involved in the business of fixing oil prices.”
“It would be a misjudgment to accuse us of such,” he said on the sidelines of an energy forum in Cairo, Egypt.
“OPEC is an open, transparent organization focused on assisting the oil markets to remain in balance on a sustainable basis, which is a fundamental requirement of investors,” Barkindo said.
“The international oil industry needs market stability to plan and invest in a predictable manner in order to guarantee future supplies,” he added.
OPEC and a group of non-OPEC countries including Russia, an alliance known as OPEC and its allies, are reducing oil output in 2019 to avoid a potential supply glut that could weigh on prices. A similar action in 2017 got rid of an earlier supply glut.
OPEC, Russia Draft Cooperation Charter
Apparently scared by the United States anti-cartel legislation for the oil industry, OPEC and its allies such as Russia have drafted a new cooperation charter but decided against creating a formal body, at least on paper.
A draft of a document – setting up a new alliance and dated January 2019 – and seen by Reuters carefully avoids any mention of sensitive issues such as oil prices, market share and production cuts.
OPEC and Russia have been cutting production together to support prices since 2017, after clinching a deal in December 2016, in moves that have provoked criticism from United States President Donald Trump.
The new draft said OPEC and Russia will discuss creating “a mechanism” rather than “an organization” when they meet on April 17-18 in Vienna, calling for the creation of an “Alliance of Oil Producing Countries”.
“It looks genuine. It’s also been updated since,” an OPEC source said without giving any further details.
The objectives of the alliance are listed as setting up “an intergovernmental platform to facilitate dialogue” and “further strengthen the collaboration in the formulation of policies aimed at promoting oil market stability”.
The objectives are due to be achieved by promoting a better understanding among its members of energy market fundamentals as well as “permanent dialogue among oil-producing countries”, according to the document.
Uganda: Pop star, Bobi Wine set to unseat President Museveni
Uganda Pop star, Bobi Wine has declared his political ambition to run for the presidency ahead of the 2021 elections that will take place in Uganda.
He told CNN that he is making plans for a bigger political stage in the country. He added that he has launched a grassroots movement for young people aimed at challenging the country’s longtime leader President Yoweri Museveni.
Speaking with CNN’s Robyn Curnow, Wine said he is “seriously considering” running for president in 2021 where he is expected to face Museveni who has ruled Uganda since 1986.
Museveni has changed the constitution twice to extend his stay in office, although he has not declared his intention to contest in the next elections.
Wine said dictatorships have thrived in Africa by suppressing young people, and getting young voters to the polls could help change the game.
“Ugandans cannot be free unless they free themselves from military rule and lawless rule,” Wine said.
“We started a campaign calling upon all people of Uganda, especially the young people that have been so apathetic to go ahead and register themselves and be voters. Not just supporters but voters.”
“We believe that by the time we get to the election which is about two years away, we will have many Ugandans registered as voters and overwhelming Museveni looks like our only way out.”
However a spokesman for the Ugandan government, Ofwono Opondo, dismissed the MP as presumptuous.
“Wine is being presumptive, perhaps to ride on Museveni’s name to gain some international attention. Otherwise, it is his right to do so if he really wants to run for the Presidency of Uganda,” Opondo said in an emailed statement to CNN.
“It’s not up to Museveni to prepare a handover. His job is to ensure elections are organized and held, regularly and on time and the winner according to the popular vote will lead Uganda,” he added.
Wine, whose real name is Robert Kyagulanyi, is the leader of a youth movement calling for an end to Museveni’s 32-year-old rule in Uganda
He entered politics as an outsider in 2017 and has since proved to be a thorn in Museveni’s side.
In the same year, he ran for a parliamentary seat without the backing of a political party and won in a landslide.
The reggae sensation continues to release songs highly critical of the President and has used his star power to criticize unpopular government policies.
Authorities have banned his songs in the past and canceled some of his recent performances.
The government has proposed new regulations vetting lyrics and songs by artists before they are released, a restriction Wine said seeks to silence his voice.
“The regime in Uganda has always used various approaches to curtail personalities…after noticing music has played a big role in the opening of the minds and eyes of the people the regime seeks to regulate it,” Wine told Curnow.
Despite the restrictions, Wine said he would continue to hold concerts abroad to draw international attention to the “dictatorship regime” in Uganda.
“While the world looks at my brutalization and personal oppression I know millions of people go through similar oppression or even worse in Uganda.”
“So I want to use my circumstances to prepare that voice, so the world does not only see my oppression but looks at the oppression of all my countrymen,” Wine said.
His fight for a change in leadership has been met with equal resistance from the government.
Wine was charged with treason last year August and was only released from prison following widespread protests and intense pressure from activists and governments around the world.
The politician said he was tortured in detention, an allegation the government has dismissed as “fake news.”
US, China trade dispute affecting crude oil prices
Crude oil price yesterday headed for its biggest one-day drop in a month as a result of evidence of yet more growth in US crude supply.
This is coming as the federal government has unveiled plans to mobilize other oil and gas producers in Africa on the platform of African Petroleum Producers Organisation (APPO) to raise up to $2 billion to finance energy projects across the continent.
Further weighing on oil markets is the trade dispute between the United States and China, which looks unlikely to end anytime soon and has increasingly impacted on the Chinese economy.
However, the price is still on course for its strongest January gain for 14 years.
The global benchmark, Brent crude oil was down $1.49 at $60.15 per barrel, down 2.5 percent on the day in their largest one-day percentage fall since late December, while US futures fell $1.71 to $51.98 a barrel.
United States crude production, which hit a record 11.9 million barrels per day late last year, has undermined sentiment in the oil market, Reuters quoted oil traders as saying.
US energy companies last week increased the number of rigs looking for new oil for the first time since late December to 862, energy services firm Baker Hughes said on Friday.
Even with an uncertain outlook for demand and evidence of growing supply, the oil market has benefited this month from another round of production cuts by the Organisation of Petroleum Exporting Countries (OPEC) and its partners, as well as robust trade in physical barrels of crude led by China.
The price has risen by 12 percent so far in January, the largest increase in percentage terms in the first month of the year since 2005 when it gained 14 percent.
Investors have added to their bets on a sustained rise in the oil price this month for the first time since September, according to data from the InterContinental Exchange.
But much of the demand outlook hinges on China and whether its refiners will continue to import crude at 2018’s breakneck pace.
Industrial companies in China reported a second monthly fall in earnings in December, despite the government’s efforts to support borrowing and investment.
Zimbabwe: President calls security forces’ action, “unacceptable and a betrayal”
Zimbabwe President Emmerson Mnangagwa has called violence by the country’s security forces “unacceptable and a betrayal” following deadly protests last week sparked by a sharp fuel price hike.
Mnangagwa’s comments were his first on the strife which has wracked Zimbabwe for over a week, during which the President was largely absent. He arrived back in Harare Tuesday from Switzerland, where he had been due to attend the World Economic Forum (WEF) meeting.
“One week ago I announced measures to stabilize our nation’s crucial fuel supply. I was aware that these measures may not be popular, and this was not a decision we took lightly. But it was the right thing to do,” Mnangagwa said on Twitter.
“What followed was regrettable and tragic. Everyone has the right to protest, but this was not a peaceful protest. Wanton violence and cynical destruction; looting police stations, stealing guns and uniforms; incitement and threats of violence. This is not the Zimbabwean way.”
He added that “violence or misconduct by our security forces is unacceptable and a betrayal of the new Zimbabwe. Chaos and insubordination will not be tolerated. Misconduct will be investigated. If required, heads will roll.”
The leader, who last year replaced longtime strongman Robert Mugabe, returned early from the annual jamboree in the Swiss alpine resort town of Davos.
He left his Minister of Finance, Mthuli Ncube, to continue bilateral trade talks and investment meetings and he took a more hardline stance on the protests, saying they were not over the price hike but were “pre-planned.” In an interview with CNN’s Richard Quest, he said: “What triggered the rebellion in the streets was not the fuel price, this was pre-planned.”
Ncube added that there was already was a “groundswell and this was just one of the issues that was added on.”
Protests started last week after the government announced a 150% fuel price hike, and quickly turned violent amid a fierce clampdown by security forces.
At least five people were shot by police and another 25 wounded during battles with protesters in the Zimbabwean capital. Human rights organizations blamed the police and the army for the violence.
Sheila Matindike of the Zimbabwe Human Rights Commission said police officers used live rounds on protestors.
“At least eight deaths have been reported to the commission and mostly attributed to use of live ammunition,” she said at a media conference in the capital, Harare.
“Whilst the police officers in charge were not forthcoming with their side of the story, the verified facts raise a lot of question around the crowd control capacity of the law enforcement agents,” Matindike said.
“They seem to resort to use of brute, excessive and disproportionate force in most circumstances thereby causing avoidable loss of life and also worsening the situation,” she added.
Zimbabwe’s minister of state for national security, Owen Ncube, confirmed last week there were casualties but blamed nongovernmental organizations, and other individuals working with the opposition group MDC Alliance for instigating the violence.
As the protests raged, the country’s internet was cut off, with many Zimbabweans unable to access social media or check the news for updates on the protests.
On Monday, Japhet Moyo, secretary general of the Zimbabwe Congress of Trade Unions — which has been involved in organizing the protests — was arrested at Harare’s main airport on Monday and faces charges of subversion.
Moyo was not aware that he was wanted by the police, Zimbabwe Lawyers for Human Rights spokesman Tinashe Mundawarara told CNN.
His union was one of the main groups calling for a general strike after the announcement of the massive fuel price hike in Zimbabwe.
Also on Monday, the country’s High Court ruled that mobile operators should restore unrestricted access to mobile and internet services immediately, following a days-long blackout.
Judge Owen Tagu told the court that it had “become very clear that the minister has no authority to make the directive” and ordered mobile operators to “unconditionally resume the provision of the full and unrestricted services to all subscribers forthwith.”
Meanwhile, Mnangagwa joins a growing list of world leaders who will not be in attendance at Davos.
US President Donald Trump decided the US delegation would remain at home and British Prime Minister Theresa May canceled her visit to focus on the UK’s Brexit plan.
French President Emmanuel Macron — who, like Mnangagwa, is trying to quell violent street protests — is also skipping the forum. Chinese President Xi Jinping and Indian Prime Minister Narendra Modi will also be absent.
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.