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Saudi Arabia to extend voluntary cut of 1 million barrels per day until the end of the year

Oil prices eased in Asian as concerns over slow demand from top crude importer China grew after bearish trade and inflation data, outweighing fears over tighter supply arising from output cuts by Saudi Arabia and Russia.
David Mcnew | Getty Images News | Getty Images

Saudi Arabia on Tuesday extended its 1 million barrel per day voluntary crude oil production cut until the end of the year, according to the state-owned Saudi Press Agency.

The reduction will put Saudi crude output near 9 million barrels per day over October, November and December and will be reviewed on a monthly basis.

Riyadh first applied the 1 million barrel per day reduction in July and has since extended it on a monthly basis. The cut adds to 1.66 million barrels per day of other voluntary crude output declines that some members of OPEC have put in place until the end of 2024.

Fellow heavyweight oil producer Russia — which leads the contingent that joins OPEC nations in the OPEC+ coalition — also pledged to voluntarily reduce exports by 500,000 barrels per day in August and by 300,000 barrels per day in September. Russian Deputy Prime Minister Alexander Novak on Tuesday said that it will extend its 300,000 barrels per day reduction of exports until the end of December 2023 and will likewise review the measure on a monthly basis, according to the Kremlin.

The cuts are described as voluntary because they are outside of OPEC+’s official policy, which commits every nonexempt member to a share of production quotas. OPEC Secretary-General Haitham al-Ghais has previously said that resorting to voluntary reductions outside of OPEC+ decisions does not suggest divisions in policy views among alliance members.

The ICE Brent futures contract with November delivery was up $1.07 per barrel to $90.07 per barrel at 2:13 p.m. London time, or 9:13 a.m. in New York, with WTI futures higher by $1.40 per barrel to $86.95 per barrel.

Saudi stakes
Saudi Arabia faces a difficult juggling act between implementing oil production cuts and the blow to its crude-reliant economy. Losses incurred by trimming production — and, indirectly, marketing volumes — could be partially offset by increases in Riyadh’s sale prices and in the global oil prices that underpin them.

After languishing below $75 per barrel for the better part of the first half of the year, global futures prices shot up by more than $10 per barrel over the summer, most recently boosted by security risks in OPEC member Gabon and the threat of disruption in the Gulf of Mexico, in the wake of Hurricane Idalia.

The Paris-based International Energy Agency expects increasing supply tightness in the second half of 2023 as demand recovers in China, the world’s largest crude importer.

Source: https://www.cnbc.com/2023/09/05/saudi-arabia-to-extend-voluntary-cut-of-1-million-barrels-per-day-until-the-end-of-the-year.html

‘Poor And Vulnerable Suffer The Most’: PM on Freebie Culture, Cautions Against ‘Irresponsible’ Financial Policies

With Assembly Polls and Lok Sabha Elections 2024 around the corner, discussion and criticism on freebie politics are again on the fore. Prime Minister Narendra Modi on Sunday said that the poor and vulnerable classes suffer the most due to the irresponsible financial policies of political parties.

“The poorest and most vulnerable suffer the most from irresponsible financial policies and populism,” said PM Modi in an exclusive interview with PTI adding that the irresponsible financial policies and populism may give short-term political results but extract great social, and economic prices in the long term.

PM Modi also discussed India’s flourishing economic status and the praises its financial policies are earning on a global stage and assured that India would be a developed nation by 2047.

“India’s economic growth is a “natural by-product” of the nine-year-old government’s political stability. We will be a developed nation by 2047 with “corruption, casteism and communalism” having no place in our national life,” PM Modi told PTI.

PM Modi also emphasised that while most advanced economies are facing an economic slowdown, chronic shortages, high inflation, and ageing populations, the Indian economy is acknowledged to be the fastest-growing large economy with the largest youth population.

“For a long time in world history, India was one of the top economies of the world. Later, due to the impact of colonisation of various kinds, our global footprint was reduced,” he said.

Source: https://www.news18.com/india/poor-and-vulnerable-suffer-the-most-pm-on-freebie-culture-cautions-against-irresponsible-financial-policies-8561985.html

China Evergrande first-half net loss narrows to $4.5 billion

China Evergrande Group (3333.HK), the world’s most-indebted property developer, on Sunday reported a narrower net loss for the first half of the year, thanks to a rise in revenue.

Evergrande said its January-June loss was 33 billion yuan ($4.53 billion) versus a 66.4 billion yuan loss in the same period a year earlier.

The developer is at the centre of a crisis in China’s property sector that since late 2021 has seen a string of debt defaults, unfinished homes and unpaid suppliers, shattering consumer confidence in the world’s second-largest economy.

This month, missed U.S. dollar coupon payments by China’s largest private developer, Country Garden (2007.HK), fanned concern of contagion in an economy already weakened by tepid domestic and foreign demand, faltering factory activity and rising unemployment.

In a filing on Sunday, Evergrande said first-half revenue rose 44% from a year earlier to 128.2 billion yuan, as it “actively planned for the resumption of sales and successfully seized the short boom of the property market that emerged at the beginning of the year”. Cash fell by 6.3% to 13.4 billion yuan.

Liabilities slightly dropped to 2.39 trillion yuan from 2.44 trillion yuan at the end of 2022, while total assets also shrank to 1.74 trillion yuan from 1.84 trillion yuan.

The developer posted a combined net loss of $81 billion for 2021 and 2022 in a long-overdue earnings report last month, versus an 8.1 billion yuan profit in 2020.

A traffic light is seen near the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China, Sept. 26, 2021. REUTERS/Aly Song/File Photo Acquire Licensing Rights

As with Evergrande’s previous two annual financial statements, auditor Prism Hong Kong and Shanghai has not issued a conclusion on this report, citing multiple uncertainties relating to the business as a going concern, including future cashflow.

Evergrande said its ability to continue will depend on a successful implementation of an offshore debt restructuring plan, and successful negotiations with the rest of the lenders on repayment extensions.

Source: https://www.reuters.com/markets/asia/china-evergrande-h1-net-loss-narrows-45-bln-2023-08-27/

‘Shark Tank’ star Kevin O’Leary warns soaring interest rates will cause ‘real chaos’ for US economy

“Shark Tank” investor Kevin O’Leary revealed the cold hard truth on America’s housing market, Tuesday, warning that September will be the start of “real chaos” for the U.S. economy.

Multi-millionaire Kevin O’Leary joined ‘Kudlow’ to discuss his outlook on the U.S. housing market, and economy. (Getty Images / Getty Images)

“This was inevitable. We talked about it six weeks ago, and now you’re just starting to see the chips start to fall. The layering is as follows: The regional [banks] don’t know yet what their capital requirements are going to be. So, their loan books have closed like a turtle in a shell,” he explained during an appearance on “Kudlow.”

“This gets worse before it gets better. And what’s it doing to small business? Killing them right now,” he warned Tuesday.

The Federal Reserve’s aggressive interest-rate hike campaign sent mortgage rates soaring above 7% for the first time in nearly two decades, cooling the post-COVID, red-hot housing market.

Rates have been slow to retreat, hitting a fresh two-decade high last week. Freddie Mac reported that rates on the popular 30-year fixed mortgage are hovering around 7.09%, well above the 5.13% rate recorded one year ago and the pre-pandemic average of 3.9%.

Additionally, the Federal Reserve approved yet another rate hike in July, setting the key benchmark federal funds rate to the highest level since 2001.

O’Leary argues that the U.S.’s troubled banking market is going to cause “real chaos in a very short term,” spotlighting the devastating impact some of Congress’ short-sighted economic policies has had on the average American.

“What I anticipate is going to happen here, while we still have full employment which is remarkable, and you don’t put any capital into the small business sector, which is 60% of the jobs in America, you’re going to start to see some real chaos come September, October, November. This is an issue for Congress, Larry. It’s very simple,” he continued.

“They gave all their money to S&P 500 in two acts, the Chips and Science Act and the other, Inflation Reduction Act. Not a dime for small business. A trillion for the big boys, nothing for the small guys. And the small guys, they run America, so it has to be rebalanced somewhere, Larry.”

Source: https://www.foxbusiness.com/economy/shark-tank-star-kevin-oleary-soaring-interest-rates-cause-real-chaos-us-economy

‘China Has 10 Years Left, At Most’ — 100 Million Population Drop Could Lead To Economic Disaster, According To Famed Analyst

Renowned geopolitical analyst Peter Zeihan recently made a startling prediction during an interview with commentator Joe Rogan.

Zeihan believes that China’s collapse is imminent, with only 10 years remaining before potential disaster. The crux of his prediction lies in his assertion that China has misrepresented its population numbers, leading him to estimate that the country’s actual population is lower by 100 million than what the government has officially reported.

“This is their last decade,” Zeihan said of China. When Rogan clarified by asking, So, you’re saying that China has 10 years to go?” His response was, “At most.”

Some argue that China’s massive military, control over its people and economic power are safeguards against its demise, but others point to concerning signs that hint at potential challenges ahead.

China’s economy is showing signs of strain from various angles. Civil unrest erupted as a result of its strict zero-COVID policy, leading to lockdowns, reduced industrial output and restrained consumer spending.

Last year, economic growth experienced a significant decline, reaching one of its lowest levels in the past 50 years. The fourth quarter, in particular, was severely impacted by strict economic policies and political decisions that were deemed unwise.

With China’s population aging rapidly, there are fewer working-age people to support retirees. The one-child policy, which lasted for more than three decades before ending in 2016, worsened the situation and threatens long-term economic prospects. While China has attempted to address this by allowing couples to have up to three children, the extent of its impact on the workforce remains uncertain.

Source : https://finance.yahoo.com/news/china-10-years-left-most-153312835.html

Putin denounces sanctions on Russia during his speech for a South Africa economic summit

Russian President Vladimir Putin took multiple shots at the West on the opening day of an economic summit in South Africa, using a prerecorded speech that was aired on giant screens Tuesday to rail at what he called “illegitimate sanctions” on his country and threaten to cut off Ukraine’s grain exports permanently.

Putin, the subject of an International Criminal Court arrest warrant related to the war in Ukraine, did not travel to Johannesburg for the summit of the BRICS group of emerging economies. Instead, he plans to participate remotely in the three-day meeting of the bloc that encompasses Brazil, Russia, India, China and South Africa.

His 17-minute speech recorded in advance centered on the war in Ukraine and Russia’s relationship with the West — even though South African officials had said East-West frictions should not dominate the first in-person BRICS summit since before the COVID-19 pandemic and hoped to guide the conversation away from the deteriorating geopolitical climate.

Sitting at a desk with a white notebook in front of him and a Russian flag behind, Putin said a wartime deal to facilitate Ukrainian grain shipments that is critical for the world’s food supply would not resume until his conditions — the easing of restrictions on Russian food and agricultural products — are met.

The West’s attempts to punish and isolate Russia financially for sending troops into Ukraine are an “illegitimate sanctions practice and illegal freezing of assets of sovereign states, which essentially amounts to them trampling upon all the basic norms and rules of free trade,” the Russian leader asserted.

Moscow pulled out of the Black Sea Grain Initiative in July and stepped up drone and missile attacks on the city of Odesa in southern Ukraine, home to one of the ports the controlled passage agreement covered.

The initiative was credited with helping reduce soaring prices of wheat, vegetable oil and other global food commodities. Putin maintained that even with Russian exports of grain and fertilizer being “deliberately obstructed,” his country has “the capacity to replace Ukraine in grain, both commercially and in free aid to needy countries,” according to an official translation of his speech at the summit.

The United States and other Western nations have not directly targeted Russian agricultural exports, but moves to restrict Russia’s access to international financial payment systems under some sanctions have made it difficult for the country to get food, fertilizer and other products to market.

Source: https://apnews.com/article/china-russia-xi-jinping-putin-brics-da5552203262cb5b71598d3f1de5e55e