OPEC+ agrees oil output cut to prop up prices

VIENNA, Austria - The OPEC+ oil cartel agreed Monday to cut production for the first time in more than a year as it seeks to lift prices that have tumbled due to recession fears.

The move could irk the United States as it has pressed the group to increase output in order to bring down energy prices that have fuelled decades-high inflation.

OPEC+, a 23-nation coalition led by Saudi Arabia and Russia, had agreed to huge cuts in output in 2020 when the Covid pandemic sent oil prices crashing, but it began to increase production modestly again last year as the market improved.

Oil prices soared to almost $140 a barrel in March after Russia invaded Ukraine.

But they have since receded below $100 per barrel amid recession fears, Covid lockdowns in major consumer China and Iran nuclear talks that could bring Iranian crude back into the market.

While analysts had expected another modest increase at Monday's ministerial meeting, OPEC+ said in a statement that it decided to reduce output by 100,000 barrels per day in October, returning to the production level of August.

"An output cut won't make them any friends at a time when the world is facing a cost-of-living crisis already and the group has failed to keep up with demand this year," Craig Erlam, analyst at OANDA trading platform, warned prior to the OPEC+ announcement.

Oil prices rose by more than three percent following the announcement, with the international benchmark, Brent, exceeding $96 per barrel while the US contract, WTI, reached almost $90.

At its last meeting, OPEC+ agreed to a small rise of 100,000 barrels per day for September after US President Joe Biden traveled to Saudi Arabia to plead for a production bump -- although it was six times lower than its previous decisions. 

Energy Minister Abdulaziz bin Salman last month had appeared to open the door to the idea of cutting output, which has since received the support of several member states and the cartel's joint technical committee.

He said "volatility and thin liquidity send erroneous signals to markets at times when clarity is most needed".

Caroline Bain, commodities expert at Capital Economics, said the cut was not a total surprise a "little more than symbolic" as OPEC+ has struggled to meet its quotas due to lackluster production in some of its member countries.

"The bigger picture is that OPEC+ is producing well below its output target and this looks unlikely to change given that Angola and Nigeria, in particular, appear unable to return to pre-pandemic levels of production," Bain said.

In efforts to curb rising oil prices, the United States and its allies have released crude from their emergency reserves.

And in a bid to curb Russia's war funding, the G7 group of industrialized powers agreed Friday to move "urgently" towards capping the price of Russian oil. 

Moscow has warned that it will no longer sell oil to countries that adopt the unprecedented mechanism.

Another geopolitical issue is clouding the outlook.

Negotiations aimed at reviving a landmark nuclear deal between Tehran and world powers could lead to an easing of oil sanctions in return for curbs to its atomic activities.

However, Washington said Thursday that Tehran's latest response to a European Union draft was "unfortunately... not constructive". 

Agence France-Presse

EU plan to cut gas use by 15 percent comes into effect

BRUSSELS - An EU plan to cut gas consumption across the bloc by 15 percent to cope with an energy price crisis spurred by Russia's war in Ukraine comes into effect on Tuesday.

The EU regulation enshrining the plan agreed two weeks ago by the 27-nation bloc was published Monday in the European Union's official administrative gazette, with the stipulation it would take force from Tuesday.

"Considering the imminent danger to the security of gas supply brought about by the Russian military aggression against Ukraine, this regulation should enter into force as a matter of urgency," it said.

The aim is for the EU to be able to bolster its reserves of gas in time for what is likely to be a very tough winter. European households and businesses are being squeezed by skyrocketing energy prices and reduced Russian gas that several member states are dependent on.

The regulation said that EU countries "shall use their best efforts" to cut gas consumption by "at least 15 percent" between August this year and March next year, based on how much they used on average over the previous five years.

Some EU countries, though, had carve-outs from strictly following the rule, which was in any case termed a "voluntary demand reduction".

These were countries not fully connected to the European electricity grid or with gas pipelines to other parts of the EU or unable to free up enough pipeline gas to help other member states.

Hungary, which relies on gas piped in directly from Russia, had demanded the exception. 

Germany, the EU's economic powerhouse, took a major share of the 40 percent of EU gas imports that came from Russia last year. 

Should the European Commission see a "severe gas supply shortage" or exceptionally high gas demand emerging, it can ask EU countries to declare an alert for the bloc. That would make gas cuts binding and limit exceptions.

While the EU has not included Russian gas in its sanctions on Moscow for the war in Ukraine, the Kremlin has drastically cut supplies anyway in what Brussels seems as an attempt to strongarm Europe.

Agence France-Presse

Oil prices jump, stocks mixed with spotlight on surging inflation

LONDON - Oil prices rallied Wednesday, adding to soaring inflation concerns, while stock markets diverged.

Crude futures jumped 2.5 percent with Brent North Sea headed towards $120 per barrel.

Russian Deputy Prime Minister Alexander Novak on Wednesday warned that a ban on Russian oil and gas imports over the Ukraine war would drive the world's energy markets to a "collapse". 

"It is absolutely obvious that without Russian hydrocarbons, if sanctions are introduced, there will be a collapse of the oil and gas markets," Novak told Russia's lower house State Duma as reported by Russian news agencies.

"The rise in energy prices may be unpredictable," Novak added. 

On stock markets, London's benchmark FTSE 100 index was up after official data showed UK annual inflation had surged to 6.2 percent last month, the highest level in 30 years. 

While inflation increases company costs it can boost their revenues by sizeable amounts. 

The British data were published ahead of a UK budget update Wednesday that could ease a cost-of-living crisis for millions of Britons as inflation rockets worldwide largely owing to soaring energy prices. 

"Today's data confirm a worsening squeeze on consumer incomes," said Yael Selfin, chief economist at KPMG UK.

"These price rises were dominated by increases in energy, and we expect further rises this year as global energy, food, and other commodities markets are impacted by Russia's invasion of Ukraine."

Elsewhere, eurozone stock markets fell Wednesday after Asia's top indices closed higher.

Wall Street had rallied Tuesday on optimism that the Federal Reserve's plan to hike interest rates would help to bring inflation under control.

While there remains plenty of concern about the war in Ukraine, analysts said some confidence had seeped back into trading floors as investors bet on consumer resilience and economies continue to reopen.

Federal Reserve boss Jerome Powell this week said that the US central bank was prepared to act more aggressively on lifting borrowing costs should American inflation -- already at a 40-year high -- not fall quickly enough.

Officials lifted US rates last week by a quarter of a point but some have advocated bigger increases, a view Powell suggested he was open to believing that the world's biggest economy was strong enough to withstand such a move.

Agence France-Presse

Saudi Aramco Q3 profits soar 158 percent on higher oil prices

RIYADH - Saudi Aramco's earnings rose 158 percent year-on-year in the third quarter on higher oil prices and volumes sold as the global economy recovered, it said on Sunday.

Aramco's net income was $30.4 billion in the third quarter, up from $11.8 billion in Q3 last year, with free cash flow more than doubling to $28.7 billion. Shareholders will receive $18.8 billion in dividends.

"The increase in net income was primarily the result of higher crude oil prices and volumes sold," the Saudi oil giant said in its earnings statement.

It also cited "stronger refining and chemicals margins in Q3, which were underpinned by rebounding global energy demand and increased economic activity in key markets".

The latest rise comes after profits nearly quadrupled in Q2 as the world economy bounced back from the Covid crisis, lifting demand and pushing oil prices back above $80 a barrel.

"Some headwinds still exist for the global economy, partly due to supply chain bottlenecks, but we are optimistic that energy demand will remain healthy for the foreseeable future," Aramco chief executive Amin Nasser said.

Agence France Presse 

Oil giant Shell sets sights on sustainable aviation fuel take-off

LONDON - Dutch Shell plans to start producing low-carbon jet fuel at scale by 2025, in an attempt to encourage the world's airlines to reduce greenhouse gas emissions.

Aviation, accounting for 3 percent of the world's carbon emissions, is considered one of the toughest sectors to tackle due to a lack of alternative technologies to jet fueled-engines.

Shell, one of the world's largest oil traders, said it aims to produce 2 million tonnes of sustainable aviation fuel (SAF) by 2025, a ten-fold increase from today's total global output.

Produced from waste cooking oil, plants and animal fats, SAF could cut up to 80 percent of aviation emissions, Shell said.

Shell, which at present only supplies SAF produced by others, including Finnish refiner Neste, said on Monday it wants green jet fuel, which can be blended with regular aviation fuel with little need to change plane engines, to make up 10 percent of its global aviation fuel sales by 2030.

SAF accounts for less than 0.1 percent of today's global aviation fuel demand, which reached around 330 million tonnes in 2019, investment bank Jefferies said.

Growing the market faces several hurdles, primarily due to the cost of SAF, which is currently up to 8 times higher than regular jet fuel, and the limited availability of feedstock.

Shell said it wants others to follow its lead.

"We also expect other companies to add to it with their own production plants," Anna Mascolo, head of Shell Aviation, told Reuters.

The United States said last week it wants to cut aircraft greenhouse-gas emissions by 20% by the end of the decade by significantly boosting SAF usage.

NEW PRODUCTION

Anglo-Dutch shell, which aims to reduce emissions from fuels it sells to net zero by 2050, is in the midst of a large overhaul aimed at producing more low-carbon fuels such as biodiesel and SAF, as well as hydrogen.

Shell plans to build a biofuels processing plant at its Rotterdam refinery with an annual capacity of 820,000 tons, with SAF set to make up more than half of the output. The plant is expected to start production in 2024.

In a new report on the decarbonization of aviation published together with Deloitte, Shell called for the sector to cut its emissions to net zero by 2050.

The International Air Transport Association, representing most of the world's airlines, aims to halve emissions by then.

Reducing emissions to net zero can be achieved by using more low-carbon fuel and offsetting the remaining emissions through carbon credits.

Shell is also developing synthetic aviation fuel made from hydrogen and recycled carbon.

"Sustainable aviation fuel, whether bio SAF or synthetic SAF, remains the single biggest solution," Mascolo said.

-reuters

Oil prices gain on expectations OPEC+ will keep lid on output

SINGAPORE - Oil prices rose on Wednesday as investors bet OPEC and its allies would largely agree to extend their supply curbs into May, while strong growth in China's manufacturing activity this month sent out more signals of economic recovery.

Brent crude futures for May, which expires on Wednesday, rose 46 cents, or 0.7 percent, to $64.60 a barrel at 0635 GMT, after falling 1.3 percent on Tuesday. The more active Brent contract for June was up 52 cents, or 0.8 percent, at $64.69 a barrel.

The benchmark has shed more than 2 percent so far this month, compared with a 18 percent rise in February.

US West Texas Intermediate (WTI) crude futures climbed 51 cents, or 0.8 percent, to $61.06 a barrel, after falling 1.6 percent in the previous session.

"Oil prices appear to be underpinned by upbeat Chinese Purchasing Manager's Index (PMI) data from the National Bureau of Statistics (NBS), which underscored the growth momentum of the world's second-largest economy," said Margaret Yang, a strategist at Singapore-based DailyFX.

"Against the backdrop of lowered energy demand in Europe due to a third viral wave, OPEC+ and its allies are likely to extend the current production cut into May until the growth prospects show signs of improvement."

China's manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays. 

But OPEC+ has raised concerns that rising numbers of coronavirus infections globally and lockdown measures will impact the recovery in demand for oil, according to a report from the group's experts panel meeting seen by Reuters. 

The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are set to meet on Thursday, following a month in which oil prices have whipsawed on concerns about extended pandemic lockdowns in Europe, slow vaccine rollouts and rising COVID-19 cases in India and Brazil, pitted against growing optimism on growth in the United States.

OPEC+ last month surprised the market by agreeing to extend supply curbs, with small exceptions for Russia and Kazakhstan, at a time when fuel demand appeared to be recovering.

"All eyes will be on OPEC+ meeting for May output decisions and considering the surge in COVID-19 cases and lockdowns being implemented in parts of Europe, and the strength in dollar, it may pressure prices by another 2 to 3 percent," said Sunilkumar Katke, head of currencies and commodities at Axis Securities.

Under existing curbs, OPEC, led by Saudi Arabia, and non-OPEC producers, led by Russia, have cut just over 7 million barrels per day (bpd), while Saudi Arabia has made an additional voluntary reduction of 1 million bpd.

Saudi Arabia is prepared to back an extension of the supply cuts into June, including its own voluntary cut, to boost prices, a source briefed on the matter told Reuters this week. 

(Reporting by Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Simon Cameron-Moore and Richard Pullin)

-reuters

Venezuelan oil price falls below $10, lowest level in 20 years

The price of Venezuelan oil has fallen to below $10 a barrel -- its lowest level in more than two decades, the government said on Friday.

The oil ministry said the price between Monday and Friday was 70.62 Chinese yuan -- $9.90 a barrel -- a level that has not been seen since 1998 when it was $9.28.

Since 2017, the government of President Nicolas Maduro has announced its oil prices in yuan rather than dollars in protest over US sanctions.

The weekly price -- last year averaging $56.70 and at $61.41 in 2018 -- has fallen through the floor since the coronavirus pandemic began.

Oil prices have been sliding since 2014 and exacerbating the country's ongoing economic crisis that has pushed almost five million Venezuelans to leave the country, according to UN figures.

Venezuela is almost entirely dependent on its oil revenues, which account for around 96 percent of its income.

"It is an extremely extreme situation," oil expert Francisco Monaldi said this week in a meeting with the country's Foreign Press Association.

"Venezuela would normally need prices of more than $30 to make it attractive to continue drilling and pay royalties," he said.

"What we are experiencing is a kind of Armageddon."

Venezuela's oil production has fallen to around a quarter of its 2008 level.

Maduro's government blames that on US sanctions, including against state oil company PDVSA, but many analysts say the regime has failed to invest in or maintain infrastructure.

Although the South American country has the largest oil reserves in the world, the sector is a victim of corruption and lack of investment, according to analysts and the Venezuelan opposition.

Between 2004 and 2015, the country earned $750 billion from its oil exports, the price of which peaked in 2011 and 2012 with an annual barrel average of $101.06 and $103.42 respectively.

But now, the government is running the printing press to make up for the budget deficit -- and fueling runaway inflation.

Despite a national lockdown because of the coronavirus, protests have bubbled up across the country as people experience shortages of food and medical necessities.

Officials said several dozen people had demonstrated in Upata, a town of about 100,000 inhabitants, while seven people were injured Wednesday during protests -- that turned to looting -- in the eastern state of Sucre.

At least 10 people have died from COVID-19 in Venezuela, with just over 300 infections, according to a tally by Johns Hopkins University.

Agence France-Presse

Oil up as Kuwait revives hope for output freeze deal

SINGAPORE, Singapore—Oil prices climbed in Asia Wednesday after Kuwait said an agreement to freeze output during a producers’ meeting this month could still be reached despite conflicting statements by participants.

But analysts said the rebound would not likely last owing to a painful supply glut and weak demand caused by the slowing world economy.

At around 0430 GMT Wednesday, US benchmark West Texas Intermediate for delivery in May was up 97 cents, or 2.70 percent, at $36.86 and Brent crude for June was 68 cents, or 1.80 percent, higher at $38.55.

Both contracts eked out an increase on Tuesday, but prices are still well below the $40 level reached last month following a rally driven by hopes of an agreement during the April 17 producers’ meeting in Doha.

Prices dived after Saudi deputy crown prince Mohammed bin Salman said last week his country will only agree to limit output if rival producers such as Iran followed suit.

But Iran, which has been raising production since the West lifted nuclear-linked sanctions in January, has insisted it should not be the one to cut back.

Key OPEC member Kuwait, however, said a freeze deal can still be reached without Tehran, Bloomberg News reported.

It quoted Kuwait’s OPEC governor Nawal al-Fezaia as saying that major producers have no option but to reach an agreement and that a freeze could set a floor price.

Ric Spooner, chief market analyst at CMC Markets in Sydney, said traders are likely to wait for the results of the meeting before making big bets.

“Given the welter of statements… people are probably just going to ignore (the comments) until they get the results of the meeting,” Spooner told AFP by telephone.

Comments by International Monetary Fund chief Christine Lagarde that global economic recovery is still “too slow” and “too fragile” further added to the gloom in the saturated oil market as it is bad news for demand, analysts said.

source: business.inquirer.net

Cheap oil, good for consumers, is slamming stocks. Why?

NEW YORK — Wall Street is drowning in oil.

Stocks are having their worst start to a year in history in part because of a rapid plunge in the price of oil. The price of crude is down 28 percent this year already, which in turn has dragged down energy company shares in the Standard & Poor’s 500 index by 13 percent, which has helped pull the overall index down 9 percent.

This even though low oil prices — and the cheap prices for gasoline and other fuels that result — are wonderful for consumers and many companies.

“It seems ironic that in the run-up to the global financial crisis we were worried about oil prices being too high in 2007 and 2008. Now we’re worried about them being too low,” said Julian Jessop, head of commodities research with London-based researchers Capital Economics Ltd.

The drastic drop in oil and stock prices stands in contrast with a US economy that, on the whole, is doing pretty well. US employers created 292,000 jobs in December, and few economists see the economy sliding into recession.

Here’s what experts think is going on.

Why is oil so low?

Because there is so much of it.

A long run of high oil prices inspired drillers to develop new techniques and to go to new places to find more oil, and they succeeded. In the US improved oil drilling technologies known generally as fracking have added more oil to the global market than the total production of any other nation in OPEC other than Saudi Arabia.

Producers in the US and abroad haven’t cut back production very much, despite the low prices, and now the lifting of international sanctions against Iran could send more oil flowing into markets that are already awash in crude.

US stockpiles are at their highest level in at least 80 years, and the International Energy Agency predicts that during the first half of this year global oil supply could outstrip demand by 1.5 million barrels per day.

Demand for crude has been growing steadily, but that may not last because economic growth in China, the world’s second-largest oil consumer after the US, is slowing.

Why do low oil prices hurt the stock market?

Oil company profits are plummeting, so oil company shares are plummeting, and that is dragging down the whole market.

Analysts estimate that profit for all S&P 500 companies in total are on track to be down a recession-like 5.8 percent for 2015. But if energy companies were removed from that figure, S&P 500 profits would be up a very healthy 5.7 percent for the full year.

That profit drop directly leads to lower share prices that drag down entire indexes. Two of the biggest oil companies in the world, Exxon and Chevron, are part of the 30-member Dow Jones industrial average. Of the 20 biggest share price losers in the S&P 500 this year, 13 are energy companies.

Investors are also selling shares of companies that may have exposure to the oil industry, like certain banks. And the price of oil has now fallen so low that investors are also worried that it could mean global economic growth is much weaker than expected, which could hurt all companies.

Aren’t lower oil prices a good thing for the economy?

It depends on why prices are lower.

If they fall because new supplies have been found, it usually helps the broader economy, and markets held up fairly well during oil’s big slide from over $100 a barrel in 2014 to under $50 a barrel last year.

“In the long run, lower oil prices should be positive or at worst neutral for the world economy because all they’re really doing is transferring income from oil producers to oil consumers,” Jessop says.

But this latest plunge in prices to under $30 a barrel has investors worried that oil prices are falling because global growth is slowing, as businesses and consumers in many developing countries, particularly China, cut back on spending. Bruce Kasman, chief economist at JPMorgan Chase, says that steep drops in oil prices have historically been a sign of a weakening global economy.

Also, US consumers have remained cautious about spending the money they aren’t putting into their gas tanks, which limits the benefit to the broader economy. Americans saved 5.5 percent of their incomes in November, up nearly a full percentage point from a year earlier.

Kasman estimates that US spending grew at a tepid pace of just 1.5 percent in the final three months of last year. “There’s no doubt that the consumer spending growth figures for the US, Europe and Japan have disappointed,” he said.

Some of that likely reflected a temporary drag from warm weather, as Americans spent less on winter clothing and utilities. That could turn around in the first quarter, giving the economy a lift, Kasman said.

Delta Air Lines told investors this week that bookings for this spring are ahead of last year’s pace because cheaper gasoline means consumers have more money.

Could this lead to broader turmoil, the way the subprime mortgage crisis did?

It is already having some ripple effects, but the energy market isn’t nearly as big or far-reaching as the housing market.

When oil prices were high, lots of banks, including some of the biggest on Wall Street, made loans to energy companies to finance drilling in North Dakota, Texas and elsewhere. Dealogic estimates that the oil and gas industry has roughly $500 billion in outstanding debt. According to the Federal Reserve, there is $11 trillion in outstanding residential mortgage debt.

Still, some are feeling it. Oil company cash flow is slowing, and companies are finding it harder to repay their loans. Oil and gas company bankruptcies are rising, and the entire market for so-called junk bonds has been shaken as a result of energy company defaults.

JPMorgan Chase, Wells Fargo, Citigroup and Bank of America all had to write down the value of energy loans or set aside more money to cover losses. BofA executives told investors this week that energy loans were roughly 2 percent of its total loans. Smaller regional banks could to be more exposed relatively than the big Wall Street banks.

Is there an oil price that would be good for the market and consumers?

Jessop thinks that a price of about $60 a barrel would do the trick. “High enough to keep the main producers in business but low enough to provide a real boost to the incomes of consumers,” he says. He expects prices to return to that level by the end of next year as oil companies pare back exploration and the glut is worked off.

source: business.inquirer.net

Oil stays below $40 after OPEC decides against output cut

SINGAPORE, Singapore — Oil stayed below $40 a barrel in Asia Monday after the OPEC cartel decided against slashing high output levels and traders turned their focus to a US central bank meeting next week.

US benchmark West Texas Intermediate for delivery in January was down 37 cents at $39.60 and Brent crude for January was trading 12 cents lower at $42.88 a barrel at around 0210 GMT.

At a meeting in Vienna on Friday, the Organization of the Petroleum Exporting Countries (OPEC) decided against cutting its oil output to lift prices, its president and Nigerian oil minister Emmanuel Ibe Kachikwu said.

OPEC, whose members together pump out more than one third of world oil, is currently producing above its official target of 30 million barrels per day despite a global crude supply glut that has battered prices for more than a year.

“Crude oil were no doubt compressed by the lack of an agreement at the OPEC, signaling that the supply glut will persist longer,” Bernard Aw, market strategist at IG Markets in Singapore.

“WTI is trading below the key $40 (mark) and it looks set to remain there.”

Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY, said market attention is now turned to a meeting of Federal Reserve policymakers and to the latest economic data from China, the world’s top energy consumer.

Traders are watching whether the Fed will raise interest rates, a move that will boost the dollar. A stronger US currency will make dollar-priced oil more expensive to holders of weaker units, denting demand and prices.

“While all eyes are now on the Federal Reserve as it meets next week for the last policy meeting this year to decide whether to raise its benchmark rate, economic data from China will set the tone of prices in the coming weeks,” Gupta said.

He said the dollar also got a boost from a strong US jobs report on Friday. The report strengthens the case for a Fed rate hike, analysts said.

source: business.inquirer.net

Oil prices fall amid weak China, German trade data

SINGAPORE – Oil prices fell in Asia Wednesday as dealers await the latest US supply report for clues about production levels, while weak Chinese and German trade data also weighed, analysts said.

US benchmark West Texas Intermediate for January delivery slipped 90 cents to $62.92 while Brent crude for January was down $1.01 at $65.83 in mid-morning trade.

“With the global supply glut, the main concern at the moment is the level of production in the US,” Daniel Ang, investment analyst at Phillip Futures in Singapore, told AFP.

“The US stockpiles report will be in focus to see if there is any change in production growth,” he said.

Analysts surveyed by the Wall Street Journal said they expected domestic inventories to have fallen by 2.7 million barrels in the week to December 5.

The American Petroleum Institute, an industry group, in its own survey however said stockpiles likely rose 4.4 million barrels.

It said refinery operations likely increased 1.6 percentage points to 94.6 percent of capacity.

The Department of Energy will release the official stockpiles report later Wednesday.

The department on Tuesday modestly reduced its 2015 US oil production forecast to 9.3 million barrels per day from the previous 9.4 million estimate.

Ang said German and Chinese trade data this week “have shown signs of dropping global demand and put pressure on oil prices”.

German exports slipped 0.5 percent month on month in October, while imports fell 3.1 percent. That came a day after China said exports grew just 4.7 percent year-on-year in November and imports dropped 6.7 percent.

Trade figures out of Germany and China, both major manufacturing giants, are closely watched for their impact on crude prices, especially the more internationally leveraged Brent contract.

source: business.inquirer.net

US stocks dip as oil pushes energy sector lower

NEW YORK—A slump in energy prices pushed the stock market back from record levels on Tuesday.

Energy stocks slid as the price of oil resumed its descent. Traders speculated that member nations of the oil-producing group OPEC would fail to agree on production cuts at an upcoming meeting in Vienna on Thursday. Oil has now dropped almost a third from a peak in June.

While lower oil prices are a long-term boon to consumers and industrial companies, they are a drag on stocks in the near term because energy companies account for about 10 percent of the overall market’s profits.

Despite the losses, the major indexes remain close to all-time highs.

Stocks have been drifting gradually higher this month, having rebounded sharply from a slump in October, as investors have grown more confident that actions from central banks around the world will help bolster the global economy. The gains are likely to continue for now, said Jim McDonald, chief investment strategist at Northern Trust.

“People’s sentiment is still pretty conservative,” McDonald said. “That means that the slow-and-steady market can continue longer than people anticipate.”

The Standard & Poor’s 500 index fell 2.38 points, or less than 0.1 percent, to 2,067.03. The Dow Jones industrial average dropped 2.96 points, or less than 0.1 percent, to 17,814.94. The Nasdaq composite gained 3.36 points, or 0.1 percent, to 4,758.25.

Stocks started the day with small gains after a report showed that the US economy grew at a solid 3.9 percent annual rate in the July-September period, faster than the 3.5 percent that was initially reported. The upward revision was due to higher estimates of spending by consumers and businesses, the Commerce Department said.

That positive report was tempered by news that US consumer confidence fell in November. The Conference Board says its consumer confidence index fell to 88.7, down from a seven-year high of 94.5 in October. The decline primarily reflected less optimism in the short-term outlook as consumers expressed less confidence in current business conditions.

Among individual stocks, Pall, a company that makes filters for the food and health care industries, was the leading gainer in the S&P 500. The company’s stock jumped $3.31, or 3.5 percent, to $98 after its earnings beat the expectations of Wall Street analysts.

Energy stocks slid along with oil prices following reports that the world’s biggest producers are unwilling to cut production to help stop a slump in the price of crude. The sector dropped 1.6 percent and is now down 3.2 percent for the year. It’s the only one of the 10 industry sectors in the S&P 500 that is down for the year.

Representatives from Venezuela, Saudi Arabia, Mexico and Russian state oil giant OAO Rosneft met Tuesday ahead of a meeting of the Organization of the Petroleum Exporting Countries in Vienna and didn’t announce any immediate plans to cut output, The Wall Street Journal reported.

Benchmark US crude fell $1.69 to close at $74.09 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many US refineries, fell $1.35 to close at $78.33 a barrel on the ICE Futures exchange in London.

In metals trading, the price of gold rose $1.40 to $1,197.10 an ounce. Silver rose 18 cents to $16.55 an ounce and copper fell four cents to $2.96 a pound.

US government bond prices rose. The yield on the 10-year Treasury note fell to 2.26 percent from 2.31 percent Monday. The dollar fell to 117.94 yen from 118.28 yen late Monday. The euro rose to $1.2472.

In other energy futures trading on the NYMEX:

— Wholesale gasoline fell 0.1 cent to close at $2.032 a gallon

— Heating oil fell 0.1 cent to close at $2.395 a gallon.

— Natural gas rose 13.1 cents to close at $4.282 per 1,000 cubic feet– Steve Rothwell

source: business.inquirer.net

Fitting data centers into ‘modular containerized solutions’

MANILA, Philippines – With telecommunications, BPO and manufacturing industries rapidly developing in the Philippines, Asia’s new “Rising Tiger” appears to be looking at a lot of business growth in the coming years.

“Of course, that growth comes with improving our facilities, our network, our infrastructure,” said Hans Bayaborda, country manager for Emerson Network Power Philippines.

Bayaborda, along with four of his fellow Emerson colleagues, expressed the sentiment during a roundtable discussion on Wednesday about a recent report published by the company, called “Data Center 2025: Exploring the Possibilities.” The report, based off a global study attempting to predict the future of the data center, compiles results yielded from interviews with several key industry influencers, feedback from the industries themselves, as well as an online survey with 800 respondents.

“In the past, [IT infrastructure] was a nice thing to have,” explained Russell Perry, senior director for Marketing and Solutions in Asia. “Now, it has become a must-have.”

Renewable energy and private power generation
Respondents in the Asia Pacific area predicted that 25% of power used by data centers would be generated by solar energy. Furthermore, 33% of respondents in the region believe data centers will definitely move to private power generation, with an additional 44% believing the shift is likely.

“The control you have is the ability to optimize the data center to make sure that you make use of the power that is already available, and are able to utilize that to the outmost efficiency,” said Barry Bunyi, Emerson’s Director for Solutions Partner Business in Asia.

Increasing demand requires businesses to be flexible

In a related discussion, concerns about electricity access and efficient infrastructure are directly linked to the increasing consumer demand for the services powered by data centers.

“The time allowed for business owners to adapt, from a data center perspective, is inversely proportionate to the amount of growth you need to address,” said Bunyi.

In other words, businesses face an increasing need to be flexible about how they build and run their data centers. Newer facilities are looking at a long list of criteria they should aim to fulfill: they should be scalable to allow for rapid and/or unexpected growth, should be easy to build and quick to deploy, and should be optimized to accommodate the computer power needed for the speedy access consumers expect.

One of Emerson’s responses to these needs is what it calls “modular containerized solutions” – data centers fitted into shipping-like containers which can be easily transported and set-up at any location. As an example, Globe Telecom has purchased the first containerized solution sold in the Philippines, which was then set up in Cavite in front of the Intel building. Furthermore, Facebook is in the process of developing and piloting what it calls “rapid deployment data centers” (RDDC) with Emerson, in order to accommodate rapidly increasing usage of the global social network.

These developments seen in the area seem in line with predictions made in the Data Center 2025 report, with 58% of respondents predicting that future facilities will be at least half the size of current data centers, if not smaller.

Looking forward

The current IT model, as explained by Emerson, relies on a reactive approach – when a fault is discovered, an expert is deployed to fix it. But as the system grows more complex, the need for systematic monitoring and a more proactive/predictive management increases. It seems the data center of the future will not rely on the same amount of manpower to maintain itself, with 29% of respondents predicting full visibility from all levels, 25% of respondents predicting the data center will be self-optimizing, and 43% of respondents predicting it will even be self-healing.

“The data center is whatever the critical infrastructure is to the business,” Perry explained, and it appears more than plausible that its efficient deployment and maintenance will be an increasingly important question for the industry to tackle.

However, in the end, Perry says that the future is difficult to predict. What might seem like a permanent shift in the business landscape may in fact be no more than a passing fad, as evidenced by a previous trend in which companies began outsourcing various parts of their enterprise, before swiftly changing their minds and bringing them back in-house.

source: technology.inquirer.net

Oil prices climb in Asian trade

SINGAPORE – Oil prices rose in Asian trade Monday as robust US jobs data boosted hopes for stronger energy demand in the world’s biggest economy.

New York’s main contract, West Texas Intermediate (WTI) for January delivery, was up 23 cents at $97.88 a barrel in mid-morning trade, while Brent North Sea crude for January rose 13 cents to $111.74.

Singapore’s United Overseas Bank said in a research note that prices were supported “by the outlook for increased demand after strong jobs data from the US, the world’s top oil consumer.”

The US government reported last week that the unemployment rate fell sharply to 7.0 percent in November from 7.3 percent in October.

The data, which pointed to further strength in the US economy, also saw a better-than-expected surge of 203,000 jobs generated.

As the world’s largest oil consuming nation, the health of the American economy has a major influence on the crude oil market.

source: business.inquirer.net

Shares in Spain’s Repsol soar on news of YPF deal

MADRID, Spain—Shares in Spanish oil company Repsol are soaring following news it has struck a preliminary deal to receive compensation from Argentina for last year’s expropriation of its YPF unit.

Repsol’s shares rose by 4.2 percent to 19.22 euros ($25.97) in early trading Tuesday in Madrid.

Repsol, YPF and Mexico’s Pemex—which holds a stake in Repsol—said Monday they had agreed tentatively on a process for determining compensation. No further details were released.

Argentina expropriated Repsol’s controlling 51-percent stake in YPF in 2012, without payment. The seizure infuriated Spain and led to criticism by the European Union, the United States and some Latin American leaders.

The Spanish energy giant has demanded $10.5 billion in compensation.

The agreement must be ratified at a Repsol board meeting Wednesday.

source: business.inquirer.net

Oil prices drop after Iran nuclear deal

BANGKOK – Oil prices sank Monday as a nuclear deal between Iran and six world powers made it more likely that the sanctions choking Iranian oil exports will eventually be lifted.

Brent crude, a benchmark for international oils, was down $2.43 at $108.62 a barrel at midmorning Bangkok time in electronic trading on the ICE futures exchange in London.

Benchmark U.S. crude fell 85 cents to $93.99 on the New York Mercantile Exchange.


After marathon negotiations in Geneva, Iran on Sunday reached an agreement with the U.S., Britain, France, Russia, China and Germany to limit enrichment of uranium to 5 percent, far below the level needed for nuclear weapons.

Iran got limited relief from sanctions that have hobbled its economy, but an embargo on its oil exports remains in place while negotiations continue for a more enduring deal to ensure the country only uses nuclear technology for peaceful purposes such as power generation.

If Iranian oil returns to international markets, the additional supply is likely to make crude less expensive.

Benchmark U.S. crude is down from about $110 in October because of ample supplies and muted demand.

In other energy futures trading on Nymex:

— Wholesale gasoline dropped 4.6 cents to $2.665 gallon.

— Heating oil shed 4.8 cents to $2.991 a gallon.

— Natural gas added 7.7 cents to $3.845 per 1,000 cubic feet.

source: business.inquirer.net

Oil firms seen to hike fuel prices by 50¢

MANILA, Philippines—Domestic oil prices are going up again following weeks of softness as global output appears steady despite surging demand from growing economies such as China—leading to concerns of an oil supply squeeze.

Beginning Tuesday morning, oil firms are expected to hike fuel prices by an average of 50 centavos per liter, industry sources said.

The estimated price increases will range from 45 to 55 centavos per liter for diesel and from 25 to 55 centavos for gasoline.

Excluding expected adjustments this week, the year-to-date net increase for gasoline and diesel stand at 69 centavos per liter and P2.23 per liter, respectively.

But as of Monday afternoon, oil firms had yet to make official announcements on a price increase.

Amid the market buzz, transport groups have expressed concern over the price hikes this week.

In a statement, the militant transport group Piston said oil prices should remain low due to expected weakness in US demand as a budget standstill has prompted the world’s largest economy to suspend non-essential government services.

The Department of Energy’s Oil Monitor noted that supply concerns had eased over diplomatic developments in oil-producing Iran and the ongoing US government shutdown, which began on Oct. 1.

But China thirsts for more oil. Increasingly consumer-driven economic growth in the world’s No. 2 economy had it overtaking the United States as the largest oil buyer in the international market. As China’s industries and motorists demand more fuel for power and for transport, global supplies are in for a squeeze, according to analysts.

source: business.inquirer.net

Meditation, organic food keep Rafael Rosell fit and focused

Three years ago, model-actor Rafael Rosell found himself in a light-bulb moment after catching a wave in a hidden surf spot in Zambales. As the sun cast a golden-orange haze, he was suddenly immersed in some intangible energy. The awareness of his environment, including his body, melted away.

It lasted for a few seconds but felt like an eternity. As this mystical experience seethed through his consciousness, Rosell became aware of an unexplainable presence which was strangely familiar yet sublime. In this encounter, he perceived a soundless voice telling him that he should redirect his life. He could never forget the euphoria that flowed into his spirit.

Rosell pointed out that since that unforgettable moment in the sea, spiritual growth has been a priority in his life. What transformed him was this awakening of the spirit.

Ironically, if you Google Rafael Rosell, you’ll be inundated by his beefcake photos and raunchy write-ups. He was heavier and, in some photographs taken three years ago, his face looked puffy. But after changing the course of his life through diet, meditation and keeping the company of like-minded souls, Rosell lost 38 lbs to reveal his sculpted cheekbones and lean, muscular frame.

When he demonstrated flips and cartwheels for Inquirer Lifestyle, he moved with the grace of a cat and landed on the floor with featherweight lightness.






Although the new lifestyle and body change gave him more enthusiasm for living, it also helped that he got into a new work environment when he signed up with GMA 7 after being a talent in another station for nearly a decade. With his long list of TV and movie credentials, he has added “Maghihintay Pa Rin,” an afternoon drama series about OFWs on GMA 7.

Rosell maintained that he separates his professional career from his personal life. He admitted that in the past, he would get caught up in his dramas, sometimes believing the illusions in the entertainment industry.

“With meditation, I could discern what is reality,” he said.

In the showbiz world of artifice and ego, it is not common to find someone like Rosell who has made the exploration of the spirit the forefront of his life. Still, he prefers to keep quiet about it. “I don’t impose (principles) on people. I prefer to live by example,” he said.

Growing up in Norway

Born and raised in Stavanger, Norway, Rosell grew up speaking Norwegian, his first language. His Bicolana mother and Cebuano father spoke to their children in English.







He grew up enjoying sports such as soccer, basketball, handball, karate and ninjutsu, a martial art form derived from samurai skills.

“The kids are different now. They’re into iPads, iPhones, PlayStations and TV. They are so engulfed in the prison of their home. They don’t play anymore,” said Rosell. “When I was young, I would play cops and robbers, hide-and-seek and Ninja Turtles. I would look for a playground to do sit-ups, cartwheels and Ninja stuff.”

He was barely 10 years old when he was exposed to meditation through karate and ninjutsu. “I thought keeping the mind still was a Japanese art of praying,” he recalled. Martial arts taught him the importance of spiritual refinement and the mental discipline required in the art and avoidance of combat.

Likewise, at 9 years old, he was already reading up on the Silva Mind Control, a self-development program which improves the brain’s functions and develops the human potential.

One day, a talent scout met the teenaged Rosell in Norway which led to his showbiz career. In a family vacation to the Philippines, he went to an audition, took a six-month workshop, starred in a Close-Up commercial and a slew of television programs and films.

After doing the movie “Bikini Open,” Rosell met the late manager Douglas Quijano who introduced him to the Bench team. This led him to be one of the Bench Body models.

Back then Rosell was pumping iron, tackling Muay Thai and kickboxing, and guzzling protein shakes, creatine and supplements for bulk. “I don’t know if they are good for you. Today, I try to take everything organic, as much as possible. I don’t even touch paracetamol,” he declared.



Capoeira

He found fulfillment in capoeira, a Brazilian martial art. “The music, the dance, the spiritual side, the singing and the magic were all there,” said Rosell. “Physically, capoeira is a whole body workout. The ginga (basic rocking movements) works on your butt and thighs. The cartwheels and handstands give you an upper body workout. Even the neck gets exercised when you do the headstand,” he said.

Rosell enjoyed the camaraderie in the roda or circle where capoeiristas start to sing, play instruments and dance. Then pairs enter the circle, play against each other by showing their skills.









“It looks like a dance but it’s a game of trickery. You have to trick your opponent to make him fall,” he explained. Rosell enjoyed his focus on the movements, the music and the partner.

“It makes you forget about everything, including your baggage. For me, to experience it was a total freedom; I could just be and not think about anything else.”

In the different capoeira schools, he was given a nickname which was also his attribute. His first moniker was Mansinho which means the “Gentle One” in Portuguese. Then another teacher named him Zorba, after the Greek god. Rosell added that, when his mentor saw him modeling underwear on a billboard, he associated Rosell with Zorba, an underwear brand in Brazil.

No longer affiliated with any capoeira academy, Rosell has no ranking. However, he continues his training through the Internet.

In 2009, Rosell underwent depression after a publicized breakup with his girlfriend from showbiz. It led him to binge-eating and drinking to buffer the pain of losing a loved one.

“I got so big that I became sluggish. I was into the whole club scene, partying, drinking every weekend, having steaks. It wasn’t until that surfing experience in Zambales that I realized it wasn’t the right thing to do. I needed to change. It was a calling,” he said.

Organic food

Rosell shunned meat, pork and chicken, and favored organic produce. In six months, the 5’9” actor dropped from 188 to 150 lbs without feeling deprived.

“There was no effort nor frustration, just a change in lifestyle,” said the actor.

He could eat a Filipino breakfast of egg, fish and rice or an American breakfast of cereal with hemp or hazelnut milk. He has gotten into raw foods such as eating pasta made from zucchini.

“When you eat organic food, you don’t only feel full, you feel fulfilled. That feeling is so euphoric. Instead of being sluggish, you are so energized that you want to go on with the day and conquer the world,” he said.

His favorite restaurant is Corner Tree Café for its tasty vegan meals. In New York, he enjoyed the freshness of the French salads, baguettes and sandwiches in Pret a Manger (meaning “ready to eat”).

“I am not addicted to rice that I will miss it in my travels. In Norway, I grew up with sandwiches. I love sandwiches, just a simple combination of yeast, fish or vegetables and cheese. I also love romaine lettuce,” he said.

Rosell wondered if Filipino farmers and food manufacturers would put GMO (genetically modified organisms) labels on their products so that consumers would be given choices. When he was in Singapore, he saw chips with a GMO label and thought of posting it on Instagram.

His diet, which is largely plant-based, enables him to meditate. Previously, the meat and chicken made him feel heavy and difficult to focus.



Self-awareness

Since that turning point, Rosell has been experiencing blessings—either moving experiences of the seascape (check out his Instagram photos of his surfing trips) or random encounters with inspiring people. He meets energy movers, people who are into alternative lifestyles or on the path to enlightenment.

“They say when the student is ready, the teacher appears. Each time I have a question, there’s always someone who comes up and I learn something new,” he said.

Upon arriving from New York, Rosell chanced on a friend, who was an energy mover-turned yoga and meditation teacher, at the airport baggage claim. He was eager to learn that she was teaching theta brainwaves meditation which is associated with creativity, self-programming and spiritual experiences.

With his work schedule, Rosell meditates thrice a day to recharge himself. He also applies the Silva Method to keep him alert especially on long taping hours.

Instead of hanging out in clubs, he prefers to study new things on the Internet, be it guitar-playing, meditation or reading up predictions on the future.

“If there is anything I would love to do, it’s learning and spreading positivity. But it has to start from within. I’m not going to tell people to behave like me. I hope that, someday, they would see the change and say, ‘Alright, let’s try that.’”

source: lifestyle.inquirer.net

Oil near $94 on heels of US consumer data

BANGKOK — The price of oil rose slightly Friday after data showed U.S. consumer spending on the rise, a sign of confidence in prospects for the world’s biggest economy.

Benchmark crude for July delivery was up 15 cents to $93.76 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents to close at $93.61 per barrel on Friday.

The U.S. economy grew at a modest 2.4 percent annual rate from January through March, slightly slower than initially estimated. But consumer spending was stronger than first thought, roaring ahead at a 3.4 percent annual rate. That’s the fastest spending growth in more than two years and even stronger than the 3.2 percent rate estimated last month.

Caroline Bain, commodities analyst at the Economist Intelligence Unit, said in a commentary that “the modest upward revision to already-strong private consumption should be a positive for the oil price as it suggests buoyant consumer demand.”

Meanwhile, the U.S. Energy Department’s Energy Information Administration said the nation’s supply of oil rose last week by 3 million barrels to 397.6 million barrels, the highest level since the government started collecting the data in 1978. Separately, the American Petroleum Institute said crude oil stocks rose by 4.4 million barrels to 395.1 million barrels.

Brent crude, a benchmark for many international oil varieties, was up 4 cents to $102.23 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the New York Mercantile Exchange:

— Wholesale gasoline rose 0.7 cents to $2.815 a gallon.

— Heating oil was little changed at $2.844 per gallon.

— Natural gas shed 1.1 cents to $4.012 per 1,000 cubic feet.

source: business.inquirer.net

Clinton to press India to stop buying oil from Iran

KOLKATA — U.S. Secretary of State Hillary Clinton landed in India on Sunday with hopes of reinvigorating a relationship seen as losing steam despite efforts to bring the world’s two largest democracies closer.

Clinton was greeted by streets lined with waving well-wishers as she started her visit in Kolkata, where she will tour monuments and meet ordinary citizens in her latest bid to use her star appeal as a diplomatic tool.

She heads on Monday to New Delhi for talks with Prime Minister Manmohan Singh with whom she is expected to raise U.S. calls for India to stop buying oil from Iran, one of the most open disagreements in years between the countries.

Clinton said she saw ample progress in relations with India, pointing to rising trade and cooperation in areas from education to clean energy.

“I think it’s like any relationship—there is progress in some areas that we are very heartened by, and there is more work to be done,” Clinton told reporters before her arrival.

“But that’s the commitment that we make when we say to another country, we want to be your partner,” she said.

After more than a decade of warming relations, India has bristled at a U.S. law that would impose sanctions on banks from countries that buy oil from Iran due to concerns over Tehran’s contested nuclear program.

A senior U.S. official traveling with Clinton acknowledged that India had quietly been cutting back on Iranian oil and that New Delhi—fiercely protective of its sovereignty—could not be seen as buckling under U.S. pressure.

“Our assessment is that India is making good progress but we really need to receive assurances that they’re going to continue to make good progress,” the official said on condition of anonymity.

The official said that Carlos Pascual, the U.S. point man on the issue, would visit New Delhi later this month to determine the next step. Only EU nations and Japan have so far been given exemptions to the sanctions which go into effect on June 28.

India is highly dependent on foreign energy and has historically enjoyed friendly relations with Tehran.

But the U.S. official said that Indian businesses had made “a major strategic bet” on continuing good relations with the United States and did not want to jeopardize them over Iran.

Clinton will meet Monday morning in Kolkata with West Bengal’s Chief Minister Mamata Banerjee, who took power last year by sweeping out nearly 35 years of communist rule in the eastern state.

Clinton will seek to show solidarity with a fellow female leader but also press Banerjee to back the opening up of India’s fast-growing retail sector to major foreign companies such as Walmart, the U.S. official said.

Banerjee, a fractious ally of Singh’s government, was instrumental in scuttling planned retail reforms. Critics charge that liberalizing the sector would devastate India’s ubiquitous small stores, but foreign retailers contend that they can improve efficiency and consumer choice.

US businesses, once at the vanguard of building ties with India, have voiced disappointment over the deadlock on retail reform along with parliament’s refusal to give US nuclear firms greater protection from liabilities.

Nuclear energy had been a symbolic milestone in the relationship, with former President George W Bush championing a deal that ended India’s decades of isolation over its nuclear Non-Proliferation Treaty.

President Barack Obama has backed another of India’s longtime ambitions by supporting its bid for a permanent seat on the U.N. Security Council. But few expect U.N. reform anytime soon and some Indians have accused the Obama administration of a lack of attention.

T.P. Sreenivasan, a former Indian ambassador to the United Nations, said that the initial expectations for the U.S.-India relationship had not been met but that Clinton had the advantage of being considered a friend of New Delhi.

The visit “comes at a useful time as there is a certain amount of strain in relations that needs to be rectified,” he said.

“The relationship has lost momentum partly because… both are preoccupied with their own internal problems,” he said.

source: japantoday.com