OPEC will hold extra meeting if output cuts ‘not enough’: UAE

“What if the 1.2 million barrels of cuts are not enough? I am telling you that if it is not, we will meet and see what is enough and we will do it,” Mazrouei said.
FILE PHOTO: UAE Energy Minister Suhail al-Mazrouei addresses a news conference after an OPEC meeting in Vienna, Austria, June 22, 2018. REUTERS/Heinz-Peter Bader/File Photo By Ahmed Hagagy

KUWAIT (Reuters) – OPEC and allied oil producers are ready to hold an extraordinary meeting and will do what is needed if the current cut in oil output by 1.2 million barrels per day does not balance the market next year, the United Arab Emirates’ energy minister said on Sunday. Extending the output pact signed in early December will not be a problem and producers will do as the market demands, Suhail al-Mazrouei told a news conference at a gathering of the Organization of Arab Petroleum Exporting Countries (OAPEC) in Kuwait. “The plan (to cut oil production) is well studied but if it does not work, we always have the power in OPEC to call for an extraordinary meeting,” he added. “If we are required to extend for (another) six months, we will do it … I can assure you an extension will not be a problem.” Mazrouei was speaking at a joint news conference with the Iraqi and Algerian energy ministers as well as Kuwait’s OPEC governor, Haitham Al-Ghais. Saudi Arabia’s OPEC governor, Adeeb Al-Aama, who attended the OAPEC meeting, said oil market oversupply had fallen to 37 million barrels of crude in November from 340 million barrels in January 2017, when OPEC and its allies began cutting production in an attempt to lift prices. The Iraqi minister, Thamir Ghadhban, said there was an expectation that the output cut decision could be renewed, adding that Iraq would be willing to extend the production agreement in April. OPEC is set to hold its next oil output policy decision meeting that month in Vienna.

Trump has discussed firing Fed Chairman -sources

“We will be watching the prices and how they react over time,” Ghadhban said.

Saudi Arabia is fully committed to the reduction agreement, Al-Aama said, adding that the world’s top oil exporter’s production in January was seen at 10.2 million bpd, lower than its output target of 10.3 million bpd under the recent pact.

The kingdom has over-committed with previous cuts, reducing by more than its share and reaching compliance of 120 percent from January 2017 until May 2018, Al-Aama said.

OPEC’s supply accord commits its 11 participating members to 3% oil cuts: document

London — OPEC kingpin Saudi Arabia has pledged to lower its crude oil output to 10.311 million b/d — a 322,000 b/d cut from its October level — according to a breakdown of member quotas under the producer group’s supply accord obtained by S&P Global Platts. Iraq, OPEC’s second highest producer, will cut 141,000 b/d to reach an output level of 4.512 million b/d and the UAE will cut 96,000 b/d to average 3.072 million b/d, according to the document prepared by OPEC’s secretariat.

OPEC, Russia and nine other non-OPEC allies agreed earlier this month to a combined 1.2 million b/d supply reduction for the first six months of 2019 to shore up what many expect to be weakening market fundamentals ahead.

The document shows that OPEC will shoulder 812,000 b/d of those cuts, while the non-OPEC participants will cut 383,000 b/d.

Saudi energy minister Khalid al-Falih has already pledged that the kingdom’s production will fall to 10.2 million b/d in January, exceeding its commitment.

Russia, the largest non-OPEC participant, has previously said it committed to reduce its production gradually by 230,000 b/d. The document says Russia’s quota under the deal is 11.191 million b/d. Russian energy minister Alexander Novak said his country would lower its output by 50,000 to 60,000 b/d in January. The agreement exempts OPEC members Libya, Iran and Venezuela. For the other 11 OPEC countries, the cuts represent a 3.04% reduction from the baseline October levels, as determined by an average of six independent secondary sources, except for Kuwait, which was given a September benchmark due to bad weather that impacted its production in October.

The non-OPEC countries are also using October as their baseline, except for Azerbaijan, which is using September, and Kazakhstan, which is using November.

OPEC production allocations (million b/d)

Algeria 1.057 0.032 1.025
Angola 1.528 0.047 1.481
Congo 0.325 0.010 0.315
Ecuador 0.524 0.016 0.508
Equatorial Guinea 0.127 0.004 0.123
Gabon 0.187 0.006 0.181
Iraq 4.653 0.141 4.512
Kuwait 2.809 0.085 2.724
Nigeria 1.738 0.053 1.685
Saudi Arabia 10.633 0.322 10.311
UAE 3.168 0.096 3.072
TOTAL 26.749 0.812 25.937
Iran, Libya and Venezuela are exempted from the cuts
All reference levels are October 2018, except for Kuwait, which is September 2018

Non-OPEC production allocations (million b/d)

Azerbaijan 0.796 0.020 0.776
Bahrain 0.227 0.005 0.222
Brunei 0.131 0.003 0.128
Kazakhstan 1.900 0.040 1.860
Malaysia 0.627 0.015 0.612
Mexico 2.017 0.040 1.977
Oman 0.995 0.025 0.970
Russia 11.421 0.230 11.191
Sudan 0.074 0.002 0.072
South Sudan 0.132 0.003 0.129
TOTAL 18.320 0.383 17.937
All reference levels are October 2018, except for Azerbaijan, which is September 2018, and Kazakhstan, which is November 2018


Shutdown threat recedes as Trump softens stance on wall

Mitch McConnell, John Cornyn, Roy Blunt
Senate Majority Leader Mitch McConnell, R-Ky., joined by Sen. Roy Blunt, R-Mo., left, and Majority Whip John Cornyn, R-Texas, right, arrives to speak to reporters about the possibility of a partial government shutdown, at the Capitol in Washington, Tuesday, Dec. 18, 2018.

WASHINGTON (AP) — President Donald Trump appeared Tuesday to back off his demand for $5 billion to build a border wall, signaling for the first time that he might be open to a deal that would avoid a partial government shutdown. The White House set the tone when press secretary Sarah Huckabee Sanders indicated that Trump doesn’t want to shut down the government, though just last week he said he’d be “proud” to do so. The president would consider other options and the administration was looking at ways to find the money elsewhere, Sanders said. It was a turnaround after days of impasse. Without a resolution, more than 800,000 government workers could be furloughed or sent to work without pay beginning at midnight Friday, disrupting government operations days before Christmas. One option that has been circulating on Capitol Hill would be to simply approve government funding at existing levels, without a boost for the border, as a stopgap measure to kick the issue into the new Congress next month. The chairman of the Appropriations Committee, Sen. Richard Shelby, R-Ala., confirmed late Tuesday his office was preparing legislation to keep government funded, likely into February. The White House preference was for a longer-term package, although the conversation remained fluid and Trump has been known to quickly change course, said a person familiar with the negotiations but not authorized to discuss them by name.

Mounting legal threats surround Trump as nearly every organization he has led is under investigation

President Trump walks across the South Lawn of the White House on Dec. 7. A person familiar with his schedule said Trump spent more time than usual in his official residence this week. (Jabin Botsford/The Washington Post) By David A. Fahrenthold , Matt Zapotosky and Seung Min Kim December 15

Trump’s inaugural committee has been probed by Mueller for illegal foreign donations, a topic that the incoming House Intelligence Committee chairman plans to further investigate next year. Two years after Donald Trump won the presidency, nearly every organization he has led in the past decade is under investigation.Trump’s private company is contending with civil suits digging into its business with foreign governments and with looming state inquiries into its tax practices. Trump’s 2016 campaign is under scrutiny by special counsel Robert S. Mueller III, whose investigation into Russian interference has already led to guilty pleas by his campaign chairman and four advisers. Trump’s charity is locked in an ongoing suit with New York state, which has accused the foundation of “persistently illegal conduct.” The mounting inquiries are building into a cascade of legal challenges that threaten to dominate Trump’s third year in the White House. In a few weeks, Democrats will take over in the House and pursue their own investigations into all of the above — and more.  The ultimate consequences for Trump are still unclear. Past Justice Department opinions have held that a sitting president may not be charged with a federal crime. House Democrats may eventually seek to impeach Trump. But, for now, removing him from office appears unlikely: It would require the support of two-thirds of the Senate, which is controlled by Republicans. However, there has been one immediate impact on a president accustomed to dictating the country’s news cycles but who now struggles to keep up with them: Trump has been forced to spend his political capital — and that of his party — on his defense. On Capitol Hill this week, weary Senate Republicans scrambled away from reporters to avoid questions about Trump and his longtime fixer Michael Cohen — and Cohen’s courtroom assertion that he had been covering up Trump’s “dirty deeds” when he paid off two women who claimed they had affairs with the president before he was elected.

Major hedge funds are scrambling to prevent financial wipeout

Computer monitor with trading software.

 The stars of the biggest hedge funds are losing their shirts as analysts fear a major financial wipeout is imminent.From Ken Griffin’s Citadel, to Israel Englander’s Millennium Management, one big name after another is racking up negative returns lately, amid bad bets in a saturated market.  “Some sectors of the fund industry are crowded and competing with other investment vehicles,” said Nicholas Tsafos at EisnerAmper, who advises hedge funds.There’s also a wide disparity lately in returns among managers chasing similar investment strategies. “That alone should cause the number of closures to increase, as bad managers get fired and money is recirculated into those managers that do better,” said Don Steinbrugge, managing partner at Agecroft Partners, a hedge fund consulting and marketing firm. As hedge funds fall like dominoes (and returns underperform the S&P 500), managers also blame a sharp rise in stock market volatility and low interest rates. Although there are still more launches than failures — and as new money was infused into hedge funds in the first half of 2018 — nervous investors have pulled $10.1 billion from hedge funds through October, according to eVestment. “We remain bearish, as investor positioning does not yet signal ‘The Big Low’ in asset markets,” said Michael Hartnett, chief investment strategist at Merrill Lynch, summing up overall investor sentiment in the firm’s latest fund survey. Analysts are forecasting a surge in redemptions, especially toward year end, as more clients pull money out of losing funds. The news is hardly good for a parade of managers at some of the biggest hedge funds. According to industry reports, November was a bone-crushing month for David Einhorn’s Greenlight Capital, which saw a 3.6 percent loss; Steve Cohen’s Point72 Asset Management, which took a 5 percent hit; Citadel, which absorbed a 3 percent loss; Millenium Management, which ran into the red by 2. 8 percent; and Dmitry Balyasny’s Atlantic Global Fund, with a decline of 3.9 percent and firm-wide job cuts of 125 after losses and withdrawals eliminated $4 billion in assets. And each day brings more depressing news. Most recently, hedge fund closures included Brenham Capital, Brenner West Capital Partners, Tourbillon Capital Partners LP, Highfields Capital Management and Criterion Capital Management.

Saudi Arabia Plans to Slash Oil Exports to US – Reports

DAY 54 - In this March 14, 2017, file photo, President Donald Trump shakes hands with Saudi Defense Minister and Deputy Crown Prince Mohammed bin Salman, in the State Dining Room of the White House in Washington

After flooding the US market with oil in recent months, Saudi Arabia reportedly plans to downgrade exports of crude oil. US-based oil refiners were told to expect a much lower shipment from Saudi Arabia in January than in recent months, following the OPEC agreement to reduce production, sources briefed on the plans of state oil company Saudi Aramco told Bloomberg.

The shipments apparently could hit a 30-year low set in late 2017 of 582,000 barrels a day, which is 40% less than the recent three-month average, sources added on condition of anonymity, as the information they are providing has not been made public.

According to sources, Riyadh hopes to show the market it is making good on its promise to cut supplies following the OPEC decision. The shift in crude exports to the US could potentially have a huge impact on the market because data are available on a weekly basis, while in other regions oil traders only receive official figures on a monthly basis, or not at all. The Saudi energy ministry did not provide any official comment. The decision to cut supplies would demonstrate that Saudi Arabia is sincere with its promise to bring supply and demand in line, yet it might also lead to a conflict of interests with US President Donald Trump, who repeatedly posted on Twitter his demand that OPEC maintain its current levels of supply.

Total Saudi oil exports are expected to drop by 1 million barrels a day in January, down from about 8 million barrels a day in November-December, sources said. Khalid Al-Falih, the Saudi energy minister, told reporters last week that Saudi production will eventually drop in January to 10.2 million barrels a day, down from 11.1 million barrels a day in November.  The export cuts, if they are to be implemented, will affect big US refiners such as Valero Energy Corp., Phillips 66, Chevron Corp., Exxon Mobil Corp., and Marathon Petroleum Corp., forcing them to find other exporters in Mexico, Canada or Venezuela. Saudi’s supply to the US has been 860,000 barrels of crude a day on average so far this year, according to Bloomberg calculations based on weekly customs data, hitting its highest average of 975,000 barrels a day in July-December.

Trump Concerned About ‘Real Possibility’ of Impeachment

MOSCOW (Sputnik) – US President Donald Trump has expressed concern about the possibility of being impeached, CNN reported, citing a source close to Trump. According to the source, Trump believes that impeachment is a “real possibility” after the House of Representatives comes under the control of the Democrats. Another source told the media that Trump’s aides believed that the only problem that might lead to impeachment is the allegations of Trump’s involvement in violating campaign finance rules in the case of Cohen, who brokered the silence of Trump’s mistresses. Additionally, White House officials do not believe that the Robert Mueller-led investigation into the alleged ties between Trump and Russia could lead to the president’s being impeached. Earlier this week, Jerry Nadler, a democratic representative from New York’s 10th Congressional District in the US House of Representatives, said that claims about Trump tasking his former lawyer Michael Cohen with making illegal hush payments to women, who allegedly had affairs with Trump, might result in “impeachable offences” if proven true. Last week, Cohen pleaded guilty to charges of lying to the US Congress about plans to build a Trump-branded real estate project in Moscow. Cohen’s attorneys asked a judge for no jail time for their client, citing his cooperation in the probe into Russia’s alleged role in the 2016 presidential election. Cohen should be sentenced next week in New York. Moscow has repeatedly refuted accusations of meddling in US elections.

EU Commission ready to accept Italy deficit target of 1.95 percent, Finance Minister pushes for 2 percent – La Repubblica

FILE PHOTO: Italian Prime Minister Giuseppe Conte arrives at an extraordinary EU leaders summit to finalis

MILAN (Reuters) – The European Commission is willing to accept an increase in Italy’s deficit target to 1.95 percent for next year, daily newspaper La Repubblica said on Tuesday. The EC has rejected Rome’s draft budget which says the deficit will rise to 2.4 percent of gross domestic product (GDP) in 2019 from 1.8 percent this year. Brussels says it breaks previous commitments to reduce borrowing and will not lower Italy’s large public debt. Italy’s Finance Minister Giovanni Tria is pushing the government to reduce its deficit target to 2.0 percent, to find a compromise with Brussels and avoid a procedure over the country’s budget, La Repubblica added. Rome has in recent weeks shown willingness to reduce the deficit target. But it remains unclear how far it plans to go. Italy’s Prime Minister Giuseppe Conte will meet the commission’s president Jean-Claude Juncker on Wednesday in an attempt to avoid the procedure which would keep Italy under prolonged market pressure and could lead to fines, cuts of EU funds and other financial sanctions.

S&P drops to eight-month low on global growth worries

(Reuters) – The S&P 500 fell to an eight-month low on Monday as Apple Inc, as well as financial and healthcare sectors led losses on mounting worries over global growth, the U.S.-China trade war and uncertainty over Britain’s exit from the European Union. The S&P and the Dow Industrials, already in the red for the year after shedding more than 4.5 percent last week, fell over 1 percent. The Nasdaq reversed after an earlier bounce to drop about 0.5 percent. Markets have been dogged by signs of cooling global growth, concerns over interest rates and worries that escalating tensions between the United States and China could scuttle a fragile trade truce. “You have political tensions with China, the potential for slowing global growth, and other geopolitical tensions, that continue to weigh on the markets,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. All the 11 major S&P sectors were lower. The biggest drag on the market was a 2.5 percent drop in financials as the U.S. Treasury yields dropped further on worries over U.S.-China trade conflict and the Brexit turmoil. [US/] British Prime Minister Theresa May said she was delaying a planned vote in parliament on her Brexit deal as it was set to be rejected “by a significant margin”. The rate-sensitive bank stocks tumbled 3.22 percent on worries that Brexit could hamper global growth, giving the Federal Reserve more reason to slow its pace of interest rate hikes. “If the Fed is slowing, that means economic activity is below normal and that can negatively impact earnings,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. JPMorgan Chase & Co, Wells Fargo & Co, Citigroup Inc and Bank of America Corp fell over 3 percent. Energy stocks retreated 3.1 percent, as oil prices fell. Global pharmaceutical stocks weighed the most on the health index, which fell 1.3 percent and led losses among the seven sectors that were down over 1 percent. Apple dropped 2.1 percent after Qualcomm Inc said it had won a preliminary order from a Chinese court banning the import and sale of several iPhone models in China due to patent violations.

Trump Flies Solo as Perils to Presidency Mount

Trump Flies Solo as Perils to Presidency Mount

(Bloomberg) — The tumult of personnel turnover that’s come to characterize Donald Trump’s administration is suddenly posing a major problem — just as his presidency enters an especially risky phase. The president lacks an immediate successor for Chief of Staff John Kelly following his announcement on Saturday that the retired Marine general would leave the White House. Trump’s failure to line up a replacement before abruptly announcing Kelly’s departure to reporters sets up a potentially chaotic transition for a job crucial to maintaining a semblance of stability under a commander-in-chief famed for his unpredictability, Jennifer Jacobs and Margaret Talev write. The president said yesterday evening that he was interviewing chief-of-staff candidates after Vice President Mike Pence’s top aide, Nick Ayers, turned him down. But Ayers’s rejection of Trump’s overtures hints at the challenge whoever assumes the post will face. Kelly’s successor must help Trump deal with the new Democratic House majority — some members of which would like to see the president impeached — as well as the next phases of Special Counsel Robert Mueller’s probe into alleged Russian election meddling. Added to those are the demands of navigating the 2020 reelection campaign. For U.S. allies in Europe, Asia and beyond, Kelly’s departure means there’s one fewer of the so-called adults in the room to constrain Trump.