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These reports are all from RT. Our zombie media refuses to recognise that anything is anything other than glowing.
OPEC won’t cut production even if oil below $40 – UAE energy minister
The
UAE Energy Minister Suhail Al-Mazrouei says OPEC will maintain output
at 30 million barrels of oil a day, and wants to monitor the price
for three months before even considering a meeting about possible
changes.
RT,
15
December, 2014
“We
are not going to change our minds because the prices went to $60 or
to $40,” Mazrouei
told Bloomberg on Sunday at a conference in Dubai.
“We’re
not targeting a price; the market will stabilize itself,” he
said commenting on a statement by a Venezuelan official on Friday who
said the country may propose convening an extraordinary meeting of
the cartel.
Mazrouei
said an emergency OPEC meeting under current conditions isn’t
justified. “We
need to wait for at least a quarter” to
consider an urgent session, he said.
OPEC
Secretary-General Mohammad El-Badri said Sunday he hadn’t heard
anything about an emergency meeting. He believes oil prices aren’t
yet in line with the market and the cartel hasn’t set a price goal,
so an extraordinary meeting would not help to level the price.
“We
will not have a real picture about oil prices until the end of the
first half of 2015,” El-Badri
said. The price will have settled by the second half of next year,
and OPEC will have a clear idea by then about“the
required measures,” he
said.
El-Badri
added that the cartel’s decision isn’t aimed at weakening other
oil producers or undermining rival economies.
“Some
people say this decision was directed at the United States and shale
oil. All of this is incorrect. Some also say it was directed at Iran
and Russia. This also is incorrect,” he
said.
The
price of oil has lost 20 percent since OPEC’s last meeting on
November 27. On Monday the price of Brent crude has slightly
recovered to $62.29 at 11 AM MSK after hitting a five-year low on
Friday, at $61.65 per barrel. The next meeting of the cartel is
scheduled for June 5.
Russian equities in worst slide in 5 years
Russia’s
key stock indices have slid to their lowest level since 2009, as the
currency fell to a new record low of 62 against the US dollar and 77
against the euro..
RT,
15
December, 2014
Russia’s
dollar-denominated RTS index has lost more than 9 percent in Monday
trading, with the MICEX benchmark losing 2.6 percent – the biggest
fall since March 2009.
The
Russian currency also hit a historic low of 62 rubles against the US
Dollar and 77 against the euro, data from the Moscow Exchange shows.
The oil prices were slightly recovering during the day, but later
started sliding again with Brent crude futures being at about $61.67
a barrel and WTI at $57.14 a barrel.
Overall,
the Russian currency has lost about 84 percent since the start of the
year, with the oil price slipping 46 percent from its peak price of
$115 in June.
The
fall comes despite efforts by the Central Bank of Russia making
random market interventions after itallowed the
currency to free float in mid-October. On December 11 it sold $478
million to help prop up the currency, with the total amount spent
this year standing at about $80 billion.
Last
week the regulator also increased its benchmark interest rate to 10.5
percent, hoping this will help cap inflation and stop a ruble slide.
READ
MORE: Russian central bank hikes key interest rate to 10.5% to combat
inflation, plunging ruble
The
CBR chief Elvira Nabiullina said then that the currency was
undervalued by 10-20 percent and in 2015 it will strengthen.
She
also said that the regulator was ready to spend another $85 billion
next year in a so-called 'stress scenario', should the oil price
remain below $60 a barrel.
Russian
foreign currency reserves have now drained to a five-year low of $416
billion.
No passengers, no planes: ‘Ghost’ airports of Europe
Across crisis-stricken Europe ‘ghost’ airports have freshly painted tarmac, shiny new doors and all the nuts and bolts in place - but no passengers and no airplanes, giving them an eerie aura.
RT,
15
December, 2014
Soaring costs have delayed the ribbon cutting ceremonies, as Europe’s worst recession in 100 years has killed the projects.
The
European Commission dispensed millions of euro in funding to boost
the infrastructure at regional airports, but they are waiting for
travelers and planes that never came, and have become symbols of
reckless spending.
“The
difficulty you have with the European Union is that ultimately it has
all this money that it wants to divest in patronage through grants
and all sorts of different sinecures, throughout the land of the 28
nations, and it wants to try and make an economic impact,” Patrick
Young, a financial expert, told RT.
People
in Brussels “believe money grows on trees, that is the fundamental
problem that is pushing the EU towards breaking point,” Young said.
Poland, which joined the EU in 2004, and has been lauded by the Commission for its economic reforms and financial responsibility, received over $125 million (€100 million) to help build and upgrade 12 airports.
Lublin
and Rzeszow are in the forested and hilly east part of the country
and haven’t yet opened. Lodz airport was given a facelift, but has
failed to attract passengers as it’s located just a 50 minute drive
away from Warsaw, the country’s largest airport Lodz opened in
2012.
Poland
received €615.7 million from the EU to support these financial
black holes between 2007 and 2013, according to figures provided by
the European Commission to Reuters.
The airports failed to attract budget airlines to operate flights in between the small cities and bigger hubs.
“The
relationship between the local airports and low-cost carriers is
suicidal,” Jacek Krawczyk, former chairman of Polish national
airline LOT told Reuters.
Poland
is not the only country in Europe to spend fortunes on white
elephants.
To
the south, Spain received the second biggest allowance from the EC to
build airports, which are also failing to attract commercial flights.
The situation is so dire that one of them, Ciudad Real airport in
central Spain, is up for sale at 10 percent the price it cost to
build. The airport opened in 2008 and cost €1.1 billion to
construct, and closed in 2012, and it now has a price tag of €100
million. No commercial flights have operated since 2011.
On
the eastern coast, the €150 million Castellon-Costa airport in
Valencia built in 2011 has never seen a single plane land. The runway
isn’t long enough to get the license needed to run commercial
flights. The airport’s operator anticipates it will serve 50,000
passengers in 2015, and 200,000 by 2017.
Around
80 airports in Europe attract fewer than 1 million passengers a year
and about three-quarters of those are in the red, according to
industry body Airports Council International.
Germany has spending problems as well when it comes to airports. Berlin’s Brandenburg airport will likely need another €3.2 billion to finally open its doors on top of the €5.4 billion already spent.
Berliners
have been waiting for their new facility to open since 2011, but will
likely have to wait until 2016 or 2017. It is located south of Berlin
next to Schonefeld Airport which is currently operating
Dubai
Crashed, Qatar Crashed, And The Rest Of The Gulf States Got Smoked
Bloomberg.comDubai had the world's hottest stock market to start 2014; amid the crashing price of oil, Dubai's market has given it almost all back.
Bloomberg.comDubai had the world's hottest stock market to start 2014; amid the crashing price of oil, Dubai's market has given it almost all back.
14
December, 2014
Kuwait
City (AFP) - Share prices in energy-rich Gulf Arab states fell
sharply at the start of the week Sunday, dragged down after oil
prices plunged to new lows.
The
decline was across the board on almost all of the region's seven
bourses, as investors went into a panic sell-off soon after trading
kicked off.
Dubai's
benchmark DFM Index lost 6.2 percent to 3,373.51 points, pulled down
by market leader Emaar Properties, which shed 8.0 percent, and
construction giant Arabtec, which lost 7.2 percent.
The
index shed 7.2 percent on Thursday.
Abu
Dhabi Securities Exchange recovered slightly at mid-session, trading
down 3.6 percent at 4,212.07 points with energy stocks declining 5.3
percent and the real estate and banking sectors also falling.
The
Saudi Tadawul All-Shares Index, the largest in the Arab world, dipped
3.3 percent to 8,113.22 points, a 12-month low.
Bloomberg.comA
disastrous last three months for the Dubai stock market.
Leading
the decline was the petrochemicals sector, with Saudi Basic
Industries Co. SABIC losing 5.6 percent.
The
main index on the Qatar Exchange, the second biggest bourse in the
Gulf, dived 7.2 percent to 10,959.0 points, a level last seen in
early January. Market leaders in banking and industry contributed to
the slide.
Kuwait
Stock Exchange deepened losses, losing 3.2 percent to 6,254.62
points, a 22-month low, despite the listing of VIVA, a third mobile
phone operator 26 percent-owned by Saudi Telecom.
The
Muscat Securities Market lost 2.72 percent to 5,649.49 points, while
the Bahrain bourse was unchanged.
Global
oil prices tanked Friday to fresh five-year lows after a gloomy crude
demand downgrade from the International Energy Agency (IEA) and more
weak Chinese economic data.
US
benchmark West Texas Intermediate for January delivery plunged to
$58.80 per barrel -- the lowest level since May 20, 2009 -- having
already closed under the psychological level of $60 on Thursday.
Brent
crude for January meanwhile slipped to $62.75 in morning London
deals, striking a low point last witnessed on July 16, 2009.
The
oil market -- which has shed almost 50 percent since June -- plumbed
the latest lows after the Paris-based IEA slashed its 2015 demand
outlook, despite plunging prices.
The
six nations of the Gulf Cooperation Council -- Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and United Arab Emirates -- depend heavily on oil
revenues which make up around 90 percent of their total income.
Slumping
oil price undercuts Stephen Harper: Goar
Harper
rails at environmental advocates as his oil-centred economic vision
runs aground.
ADRIAN WYLD / THE CANADIAN PRESS
The central pillar of Stephen Harper’s economic strategy — being an aggressive fossil fuel exporter — has crumbled in a world awash with petroleum.
15
December, 2014
It
would be “crazy
economic policy”
to regulate greenhouse gases in the oil and gas sector with petroleum
prices dropping, Prime Minister Stephen Harper told Parliament last
week. “We will not kill jobs and we will not impose the carbon tax
the opposition wants to put on Canadians.”
- About as crazy as putting all the nation’s eggs in one basket: Canada becoming a global “energy superpower.”
- About as crazy as ignoring the boom-and-bust history of the oil and sector.
- About as crazy as assuming people will allow pipelines to snake under their land, carrying bitumen from Alberta’s oilsands to refineries in Texas and tankers on the Pacific coast.
- About as crazy as forbidding federal scientists to say anything about climate change and threatening to revoke the charitable tax status of voluntary organizations that seek to protect the environment.
- About as crazy as neglecting the price Canadians are already paying for climate change: power outages, damaged homes, spoiled food, lost productivity, higher insurance premiums, the cost of stocking up on everything from generators to non-perishable food.
- About as crazy as pledging to cut greenhouse gas emissions by 17 per cent at a 2009 climate change conference in Copenhagen without any plan to limit the carbon dioxide, methane and nitrous oxide spewed into the atmosphere by the oil and gas industry.
Harper
was right in one respect. This would be an inopportune time to crack
down on Alberta’s energy producers, which are reeling from
a 40-per-cent drop in oil prices since June. He should have done it
in 2008 when the price of oil peaked at $145 a barrel. He had another
chance after the 2008-2009 recession when it reached a high of $100 a
barrel in early 2011. He could have done it last spring when it was
$115 a barrel.
But
he always had an excuse for not moving. The economy was too fragile.
Canada dared not get out of step with the United States. The science
of climate change was unproven. Curbing greenhouses gases would put
Canada at a competitive disadvantage to nations such as China, India
and Russia. A technological solution — carbon capture and storage
for example — would come long.
Until
recently, the silent majority was acquiescent. The cost of heating
their homes and filling up their gas tanks mattered more to voters
than the notional damage done by greenhouse gases. The embarrassment
of having the worst
climate change record in
the industrial world didn’t affect them personally.
But
the cost-benefit balance has changed. The central pillar of Harper’s
economic strategy — being an aggressive fossil fuel exporter —
has crumbled in a world awash with petroleum. Investors are
cancelling their commitments. Employment in the oil and gas sector is
shrinking. Government revenues are dropping.
Even
if there were an appetite for Alberta’s viscous oil, it would be
landlocked. President Barack Obama is withholding approval for the
Keystone XL pipeline. First Nations in British Columbia are dead set
against the Northern Gateway pipeline.
The
provincial premiers, tired of waiting for leadership from Ottawa,
have hatched their own plan to build a low-carbon economy by putting
a price on pollution, developing renewable energy and capping
greenhouse gases.
The
fiscal outlook has darkened. The Conservatives may squeak through
this year with a balanced budget, but the escalating
surpluses they
are projecting out to 2020 will melt if revenue from the oil patch
keeps plummeting.
Public
opinion is shifting. More than half of Canadians expressed deep
concern about climate change in a poll conducted by the Environics
Institute in October. Three-quarters said they were worried about the
legacy they were leaving for future generations.
All
of this — combined with increasingly bleak economic forecasts —
casts doubt on Harper’s assiduously burnished reputation as a
prudent manager and undercuts his rationale for sacrificing the
environment to spur economic growth.
As
Canada heads into an election year, the prime minister might want to
stop tossing around words like “crazy.”
Russia
Shocks With Emergency Rate Hike, Boosts Interest Rate From 10.5% To
17%
15
December, 2014
Following
the biggest rout to the Ruble in ages, Russia - unlike Mario Draghi -
instead of talking the talk decided to walk the bazooka walk and
shocked all those long the USDRUB by unleashing an emergency rate
hike (at 1 am in the morning)from
the recently raised interest rate of 10.50% to... hold on to your
hats... 17.00%, a 650 bps increase!
From
the press
release:
The Board of Directors of the Bank of Russia has decided to increase from December 16, 2014 the key rate to 17.00% per annum. This decision was driven by the need to limit significantly increased in recent devaluation and inflation risks.
In order to enhance the effectiveness of interest rate policy loans secured by non-marketable assets or guarantees for a period of 2 to 549 days from 16 December 2014 will be granted at a floating interest rate established at the level of the key rate of the Bank of Russia increased by 1.75 percentage points (Previously these loans for a period of 2 to 90 days, provided at a fixed rate).
In addition, to enhance the capacity of credit institutions to manage their own currency liquidity was decided to increase the maximum amount of funds to repurchase auctions in foreign currency for a period of 28 days from 1.5 to 5.0 billion. US dollars, as well as on similar operations for a period of 12 months on a weekly basis.
And
for the Russian-speakers, the full breakdown of rates.
Few
markets are open but the 1month forward Ruble market just dropped
(Ruble rallied) over 2.5 handles...
RSX
(ETF) is starting to rally after-hours...
Chart:
Bloomberg
UK
energy firms go under as oil price tumbles
Insolvencies
among UK oil and gas services companies treble in 2014 amid fears of
falling demand and oversupply
15
December, 2014
The
tumbling oil price has led to a trebling of insolvencies among UK oil
and gas services companies so far this year, while £55bn of further
oil projects reportedly under threat.
Brent
crude closed below $62 a barrel on Friday, a five-and-a-half-year
low, amid fears of falling demand and oversupply as the global
economy slows down.
A
decison last month by Opec, which supplies about 40% of the world’s
oil, to keep production unchanged despite the price fall only served
to send crude sliding even lower.
On
Sunday, the United Arab Emirates energy minister, Suhail Al-Mazrouei,
said Opec would not cut crude output even if the price dropped as low
as $40 a barrel. He told Bloomberg at a conference in Dubai: “We
are not going to change our minds because the prices went to $60 or
to $40. We’re not targeting a price; the market will stabilise
itself.”
A
report due on Monday from accountancy firm Moore Stephens said 18
businesses in the UK oil and gas services sector had become insolvent
in 2014 compared with just six last year. It said that although the
increase was from a low base, it was significant because insolvencies
in the sector had been rare over the last five years.
Jeremey
Willmont at Moore Stephens said: “The fall in the oil price has
translated into insolvencies in the oil and gas services sector
remarkably quickly. The oil and gas services sector has enjoyed very
strong trading conditions for the last 15 years, so perhaps they have
not been quite so well prepared for a sustained deterioration in
trading conditions as other sectors would have been.
“There
was a sharp drop in the oil price during the financial crisis, but
the sense that oil prices could be depressed for some time is much
more widespread this time around.
“It
is clear that oil and gas majors are already cutting costs. Both
Shell and BP have recently announced cuts to investment in a number
of major projects. Smaller players are also reconsidering their
capital deployment. If this retrenchment continues the result will be
less work for oil and gas services companies.”
Energy
consultancy Wood Mackenzie has estimated that 32 potential European
oil field developments worth more than £55bn are waiting for
approval and could be at risk if oil prices continue to slump.
Wood
Mackenzie’s James Webb told the Sunday Telegraph that more than 70%
of the reserves at projects yet to be finalised had a breakeven price
in excess of $60 a barrel.
Falling
Oil Prices Push Venezuela Deeper Into China's Orbit
Venezuelan
President Nicolás Maduro had a Plan B in the event the Organization
of Petroleum Exporting Countries declined to back his country’s
proposal to cut output to boost prices.
12
December, 2014
The
day after OPEC’s Nov. 27 decision to maintain production
at current levels,
a move that drove oil prices to new lows, a somber-looking Maduro
went on national television to tell the Venezuelan people he was
dispatching Finance Minister Rodolfo Marco Torres to Beijing. Torres
spent the first week of December in China, during which he tweeted
photos
of his meetings with Chinese officials and bankers.
The
late Hugo Chávez cozied up to China as part of his drive to curb
U.S. influence in the Americas. Maduro, like his predecessor,
has relied on Beijing to underwrite Venezuela’s flagging
socialist revolution and finance the country’s gaping fiscal
deficits (this year’s shortfall could amount to 15 percent of gross
domestic product). Without loans from the Chinese, Maduro’s
government might not have been able to weather a deep economic
crisis. Under his watch, Venezuelans have had to put up with
massive shortages of basic goods, the world’s highest
inflation rate, and a steep currency devaluation.
Beijing
has so far been happy to oblige Maduro. Since 2007, China
has advanced Venezuela about $46 billion in loans repayable in
oil, of which about $20 billion has been repaid. The latest loan
agreement was in July, when Chinese President Xi Jinping visited
the country and pledged $5.69 billion in credits.
Now
Maduro needs more. The price of Venezuela’s market basket of
crude and petroleum products is now skirting $60 a barrel. Many
analysts estimate that the Maduro government needs a price of
$120 a barrel to avoid cutting back or postponing spending
commitments.
“Maduro
would like the Chinese to bail him out,” says Risa
Grais-Tarnow, an analyst with the Eurasia Group. “I think
the Chinese will have no problems in renewing existing lines of
credit. However, they may not be willing to give Venezuela more
funds.”
Beijing’s
largesse has come at a price. Chinese goods are flooding the
Venezuelan market, as many Chinese credits are tied to the import of
products and services. The low-priced imports are squeezing
local companies.
Chinese
cars are now the best-selling models in Venezuela, largely because
Ford (F),
General Motors (GM),
and Toyota (TM)
have been forced to shut their assembly lines in Venezuela
because they cannot buy dollars to pay for shipments of auto parts.
Home
appliances now come largely from China, as do many telephones and
computers. Chinese construction companies are building public
housing and other infrastructural projects, while the two countries
have dozens of joint ventures under study. Venezuela has also
had to buy three Chinese communications satellites, although the
need is questionable given the country’s other problems.
Not
all Venezuelans welcome China’s growing influence. “I don’t
know why they are bringing in Chinese construction workers to build
apartments for us,” says Geraldo Lopez, a 27-year-old bricklayer
in the central industrial city of La Victoria. “We don’t have
enough work for ourselves, yet they’re giving these contracts to
Chinese companies who don’t employ us.”
Beijing’s
imports of Venezuelan oil and petroleum products, mostly fuel
oil, have soared in the past eight years. From just 50,000 bbl/day
in 2006, they now total 540,000 bbl/day, according to oil
ministry officials. About two-thirds of the exports are believed
to be loan repayments (the terms of the credits have never been
released). Many analysts suspect that state oil company
Petróleos de Venezuela (PDVSA) gives Beijing a discount to
cover shipping.
PDVSA
receives no money for the oil it sends to China, which has
contributed to cash-flow problems. The company had been forced
to increase its borrowing to cover costs: Its debt is up more than
10-fold in the past seven years, to more than $40 billion, and
that excludes loans extended by the central bank. The situation
has hamstrung PDVSA’s ability to invest in oil projects, so
even as Maduro boasts that Venezuela has the largest crude
reserves in the world, actual production continues to decline. “PDVSA
doesn’t receive anything from exports to China. And that means it
just doesn’t have the money to grow production,” says Fernando
Sánchez, who is vice president of the Venezuelan Society
of Petroleum Engineers.
With
output falling, PDVSA has had to cut exports to the U.S.—which
for decades has been the primary market for Venezuelan crude—so it
has enough for the Chinese. In 2006, Venezuela exported an average
of 1.42 million barrels of crude and petroleum products daily to
the U.S., according to the U.S. Department of Energy. For the
first nine months of this year, exports averaged 800,000 bbl/day.
And if Maduro makes good on his promise to boost exports to China
to 1 million bbl/day in the following years, further reductions in
U.S shipments are a given.
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