Dhaka, Bangladesh
Oil market rebalancing to speed up in second half

Oil market rebalancing to speed up in second half

ST PETERSBURG (Russia), July 23: A rebalancing of the oil market is progressing more slowly than expected, but it will speed up in the second half of the year, OPEC’s Secretary General Mohammad Barkindo said on Sunday, reports Reuters. “We are pretty sure that the rebalancing process may be going at a slower pace than earlier projected, but it is on course. It is bound to accelerate in the second half,” Barkindo told reporters in the Russian city of St Petersburg. Barkindo cited strong oil demand growth, conformity with a global pact by OPEC and non-OPEC countries to cut output as well as an inventory draw in the United States as reasons why a rebalancing of the oil market would speed up. Kuwait’s oil minister Essam al-Marzouq said on Saturday that compliance with oil production cuts by OPEC and non-OPEC countries is good and that deeper cuts are possible. Asked about the possibility of further cuts to support the price of crude, the minister said: “Everything is open.” Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and other non-OPEC producers will meet in the Russian city of St Petersburg on Monday to discuss the pact on cuts, which was reached earlier this year. Marzouq also told reporters that a technical committee of OPEC and non-OPEC countries had heard and was happy with reports from Libya and Nigeria, and that discussions would continue on Monday. Another report from Dubai adds; a sharp fall in oil prices at the end of last week may dampen Gulf stock markets on Sunday, while Qatar could pull back after events at the weekend failed to point to progress in resolving its diplomatic crisis. Brent oil fell 2.7 percent on Friday to $47.98 a barrel, while global stock markets stalled. The United Arab Emirates on Friday welcomed Qatar’s decision to amend its anti-terrorism laws, a potentially positive sign. But in a subsequent speech, Qatar’s emir called for dialogue but gave no clear sign of a fresh initiative to end the crisis; UAE Minister of State for Foreign Affairs Anwar Gargash said Doha needed to change its policies before a dialogue could occur. Qatar’s stock market has already regained almost all of the losses it suffered after the crisis erupted on June 5, so room for further gains may be limited without a resolution of the dispute. In the UAE, Abu Dhabi Commercial Bank came in at the low end of forecasts by reporting a 10.4 percent fall in second-quarter net profit to 1.01 billion dirhams ($275.2 million); three analysts polled by Reuters had on average forecast 1.11 billion dirhams. Dubai’s Deyaar Development reported a second-quarter net profit 35.2 million dirhams, down sharply from 60.3 million dirhams a year ago, although revenues surged. But in Saudi Arabia, Saudi British Bank may attract interest after proposing a cash dividend of 0.71 riyal per share for the first half, up from 0.35 riyal a year ago. Egypt’s Heliopolis Co for Housing and Development may also see buying after saying it would launch a housing project at New Heliopolis, and start marketing units during October. The three-phase project would be implemented in five years at a cost of about 2 billion Egyptian pounds ($112 million), bringing revenue of 4 billion pounds.

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