KUALA LUMPUR, Oct 19 — The ringgit is expected to trade on a cautious note next week on continuous global trade uncertainties involving major world economies. An analyst said the United States (US)-China trade tensions has continued to dampen the…
KUALA LUMPUR, Oct 18 — The ringgit ended on a lower note today due to global uncertainties as well as declining oil prices. At 6pm, the local note was quoted at 4.1850/1880 against the greenback compared with yesterday’s close of 4.1780/1830….
SEOUL: Oil prices slid on Friday on jitters over demand from China after the world’s largest oil importer recorded its weakest quarter of economic growth in nearly three decades, dragged down by a trade dispute with the United States.
Global benchmark Brent crude oil futures fell by 21 cents, 0.4%, to $59.70 a barrel by 0646 GMT.
U.S. West Texas Intermediate (WTI) crude futures edged down by 4 cents, or 0.1%, to $53.89 per barrel.
In the third quarter, China’s gross domestic product (GDP) growth slowed to 6% year-on-year, its weakest pace in 27-1/2 years and below expectations, dogged by soft factory production amid ongoing trade tensions with United States and sluggish domestic demand.
“The (China) GDP print has weighed on short-term sentiment and we have seen regional stock markets and oil contracts edge lower because of that,“ said Jeffrey Halley, senior market analyst for Asia Pacific at brokerage OANDA.
Crude demand growth tends to track economic growth trends, but Halley said China’s need for oil would not recede any time soon.
Underlining that view, Chinese official data released on Friday showed robust refinery throughput in September, rising 9.4% from a year earlier to 56.49 million tonnes, on increases from new refineries and some independent refiners resuming operations after maintenance.
“There’s a lot of demand pessimism already priced into the oil markets … China GDP (growth) was not negative enough (below 6%) to alter the positive effects for the trade talks,“ said Stephen Innes, Asia Pacific market strategist at AxiCorp.
U.S. and Chinese trade negotiators are working on nailing down a Phase 1 trade deal text for their presidents to sign next month, U.S. Treasury Secretary Steven Mnuchin said on Wednesday.
Adding to the downward pressure, U.S. crude oil stockpiles surged last week by 9.3 million barrels as refinery output dropped to a two-year low, while gasoline and distillate fuel inventories decreased, the Energy Information Administration said on Thursday.
Elsewhere, the joint technical committee monitoring a global deal to cut output between the Organization of the Petroleum Exporting Countries (OPEC) and partners, including Russia, found compliance with cuts for September stood at 236%, according to four OPEC sources.
“Concerns about softer growth in the demand for oil and doubts about OPEC’s ability to rebalance the market on the current production cut rate will be key drags on prices in the near term,“ ANZ Research said in a note.
OPEC and its allies have agreed to limit their oil production by 1.2 million barrels per day (bpd) until March 2020.
OPEC lowered its 2019 global oil demand growth forecast to 0.98 million bpd, while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to OPEC’s latest monthly report. -Reuters
WASHINGTON: US manufacturing recovered in the third quarter after a bruising start to the year in which President Donald Trump’s trade wars put a major dent in factory output, the Federal Reserve reported Thursday.
But in the month of September alone, overall American industrial production pulled back as the nationwide strike at General Motors assembly plants and cutbacks in crude oil production weighed on output.
The third-quarter manufacturing rebound undid only some of the recent damage, however, with output still nearly one percent below September of last year.
The Fed’s industrial production index — which measures energy generation, mining and oil production as well as manufacturing — fell 0.4 percent in September, a worse result than economists expected.
The decline appeared larger after an upward revision to August, which posted the largest increase in a year.
Even without the month-long GM strike, in which nearly 50,000 workers walked off the job across the United States, output still would have declined 0.2 percent, according to the Fed.
GM and the United Auto Workers this week announced a tentative deal which could put an end to the work stoppage in coming days.
For the latest quarter, US manufacturing rose 1.1 percent, led higher by computers and electronics, autos and appliances, suggesting that the strike had halted healthy momentum in American auto production.
US manufacturing in September outside the auto and auto parts sectors also declined 0.2 percent compared to August, with weakness apparent in production of metals, machinery and electrical appliances as well. -AFP
LONDON, Oct 17 — Banks aiding a stock market float for Saudi oil giant Aramco will be “devoid of all sincerity” regarding environmental and social concerns, green and rights groups jointly said today. Addressing directly chief executives of…
TEHRAN, Oct 13 — Iran has discovered a gas field near the Gulf with enough reserves to supply the capital for 16 years, state media reported today. The Eram field contained 19 trillion cubic feet (538 billion cubic metres) of natural gas, the…
LONDON, Oct 10 ― Saudi Arabia, the world's largest oil exporter, told Opec that the kingdom's oil production in September fell by 660,000 barrels per day (bpd) compared with August to 9.13 million bpd in the wake of attacks on its energy…
PETALING JAYA: The plantation sector is expected to make a comeback after two years of a downcycle, as crude palm oil (CPO) prices rebound gradually in anticipation of falling global palm oil inventories, according to PublicInvest Research (PIVB Research).
The research house is upgrading its sector call to “overweight” from “neutral” in anti-cipation of an upward trending CPO prices.
“We raise our average CPO price assumption from RM2,200/mt to RM2,400/mt in 2020, which is a 15% increase from prevailing market prices. We expect CPO prices to start rising towards end-2019 after the peak production season is over,” it said in its note today.
PIVB Research noted that a decline in global palm oil inventories is expected in 2020 on the back of slower palm oil production growth, higher biodiesel consumption and stronger demand from China and India.
“We project Malaysia’s palm oil inventories to fall to two million metric tonnes by mid-2020. Meanwhile, inventories in Indonesia are likely expected to inch down to about three million metric tonnes,” it said.
Palm oil production is expected to be weak due to a number of factors.
“We suspect smallholder plantation, which makes up 17% of Malaysia’s and 40% of Indonesia’s planted area, have cut down the fertiliser application over the last one year due to lacklustre CPO prices. The impact could pose a threat to the national production as it could cause a significant reduction in bunch weight and fruit abortion over the near-term.
“Ripening of fruit bunches should also slow down, making a longer period needed for harvesting. In addition, the prolonged dry weather period during May-Sept could affect the nutrient uptake and cause moisture stress in palms. Depending on the severity, the lagged effect on the production will be seen two years later,” PIVB said.
However, a higher demand from China and India is also expected, due to the favourable import duty policy in India while China has been hard-hit by African swine flu, resulting in weaker demand for soy meal, which is the main feed for their farming industry.
“Consequently, it makes it less appealing to buy soybean for crushing purpose and palm oil would be the most suitable replacement for soybean oil,” the note said.
Meanwhile, Indonesia’s push to increase its domestic consumption of palm oil with a higher biodiesel mandate can generate additional 2.5 million palm oil demand.
“The imposition of anti subsidy duties on Indonesian biodiesel exports by the EU allows Malaysia to take away some market share from its counterpart. Malaysian biodiesel exports registered an impressive 33% year-on-year growth.
“Domestic consumption under the B10 mandate will be extended to heavy vehicles next year, bringing the total biodiesel demand to 1.6 million mt from 1.3 million mt,” it said.
PIVB’s top picks for the sector are Kuala Lumpur Kepong Bhd, Genting Plantations Bhd, TSH Resources Bhd and Ta Ann Holdings Bhd.
SINGAPORE: Oil prices fell on Monday, extending last week’s heavy losses, with traders fearing the global economic slowdown will weigh on future oil demand growth while pegging hopes for a rebound on progress in talks this week on ending the U.S.-China trade war.
Brent crude futures edged down 28 cents to $58.09 a barrel by 0300 GMT, while U.S. West Texas Intermediate (WTI) crude was at $52.64, down 17 cents.
Both contracts ended last week with a more-than-5% decline after dismal manufacturing data from the United States and China, as the lingering row between the world’s top economies hurts global growth and raises the risk of recession.
U.S. and Chinese officials will meet in Washington on Oct. 10-11 in the next, much-anticipated fresh effort to work out a deal.
On the supply side, a faster-than-expected resumption in Saudi Arabia’s production after a Sept. 14 attack on key production facilities also exerted downward pressure on oil prices, although the Middle East remained tense.
“The macro headwinds outweigh supply concerns for oil now, despite tensions in the Middle East and a reduced spare capacity pillow,” said Stephen Innes, Asia Pacific market strategist at AxiCorp.
In Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries, deadly anti-government unrest is posing the biggest security and political challenge so far to Prime Minister Adel Abdul Mahdi’s year-old government.
Iraq’s oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group’s practice head for Middle East and North Africa, said in a note.
“Any oil production disruption would occur at a time when Saudi Arabia has lost a significant part of its energy system redundancies (spare capacity),” he said.
“While Saudi oil production is now close to 9.9 million bpd, it is not clear that the capacity is fully operational at 11.3 million bpd and the (attacked) Abqaiq facility has lost a significant part of its redundancy.”
Global supply also faces facility repair and maintenance pressures.
The Buzzard oil field in the British North Sea has been shut for pipe repair work, a spokesman from China’s CNOOC said on Friday. Buzzard is the main contributor to the Forties crude stream, the largest of the five North Sea oil grades that underpin Brent crude futures.
Meanwhile Libya’s National Oil Corporation (NOC) said on Sunday it will close the Faregh oil field at Zueitina port for scheduled maintenance from Monday until Oct. 14. – Reuters
MOSCOW, Oct 3 — Saudi Arabia has fully restored oil output after attacks on its facilities last month and is now focused on the listing of state oil giant Saudi Aramco, its energy minister Prince Abdulaziz bin Salman said today. The kingdom’s…