|Bid||48.800 x 0|
|Ask||48.800 x 0|
|Day's range||48.800 - 48.800|
|52-week range||33.300 - 75.000|
|Beta (5Y monthly)||1.16|
|PE ratio (TTM)||10.99|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||04 Mar 2020|
|1y target est||9.31|
(Bloomberg) -- Oil fell from an eight-month high as cracks appear among some OPEC+ members days before a key policy meeting to discuss delaying the end of output curbs.Futures fell 1.6% in New York. Iraq’s deputy leader this week criticized OPEC, saying the economic and political conditions of member countries should be considered before they are asked to withhold production. OPEC’s president said Thursday the group must remain cautious, with internal data pointing to the risk of a new oil surplus early next year. Most of the production that was cut under an agreement earlier this year has already been brought back.While an extension of existing cuts is expected, the recent oil rally gives leverage to members reluctant to go along, including Iraq and the United Arab Emirates, Standard Chartered’s Paul Horsnell wrote in a note. Trading on Thursday was light due to the U.S. Thanksgiving holiday.“The post-vaccine announcements and post-U.S. election oil price rally is a mixed blessing for Saudi Arabia and its main ally in oil policy, Kuwait,” Horsnell said. “The rally has increased special pleading from the more reluctant members of OPEC+.”Oil has jumped 26% this month after signs that Covid-19 vaccines are imminent boosted expectations for a swift recovery in energy demand next year. However, while there are indications that Asian consumption remains healthy, Europe is still lagging.On Wednesday, Germany extended a partial lockdown to curb the spread of coronavirus for at least three more weeks. After a sharp rise in prices, both West Texas Intermediate and Brent crude futures settled technically overbought on Wednesday, a sign that a possible reversal had been on the cards.Crude’s rapid price gains this month has added to OPEC+ member Russia’s concern that U.S. shale producers will be able to resume production growth, disrupting the group’s efforts to ease a supply glut. The group will delay an output increase by three months, according to a survey of oil analysts, traders and refiners.See also: Iraq Voices Frustration With OPEC Days Before Crunch MeetingIn the meantime, a strike in Norway could threaten some oil and gas production. If a long running safety guard strike isn’t resolved before the weekend, two of the country’s fields may have to stop flows.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Oil producers need a mechanism allowing them to respond quickly to changes that could be both big and fast.They face a very uncertain outlook for demand in the first half of next year. If vaccine rollouts are widespread and smooth, the need for OPEC crude could rise quickly. But demand could be curtailed again if economic growth falters amid further lockdowns or inoculation delays. Either way, the cartel must to be able to respond swiftly to a changing environment.Oil ministers from the Organization of Petroleum Exporting Countries and their allies in the wider OPEC+ group, which includes Russia and Kazakhstan, are meeting next Monday and Tuesday. They are due to decide whether to extend their current output cuts of 7.7 million barrels a day into next year, or ease them, as was originally planned, by 1.9 million barrels from the start of January.The most likely outcome remains an extension of the current level of cuts, probably through the first quarter of 2021. But a surge in oil prices, which have risen by as much as 30% since the beginning of the month, has already called that outcome into question.But even with the current vaccine euphoria, producers need to brace themselves for waves of uncertainty. No matter if the recovery picks up speed again, there are still huge stockpiles of crude and refined products that need to be drawn down before the oil market gets back to any sustainable balance. Figures from OPEC’s own analysts indicate that the amount of oil held in tanks, caverns, ships and supply chains will be almost 1.3 billion barrels higher at the end of 2020 than it was at the beginning.Careful market management is therefore going to be needed for many months to come. If the delivery of vaccines falters for any reason, producers will need to keep a tight grip on supply. If there are ample quantities of cheap, easily stored and transported shots available early next year, there could well be a sudden surge of pent-up demand.While the producer group’s members would undoubtedly like to see higher oil prices — they always do — they are also wary of triggering the start of a third U.S. shale boom. Analysts at Standard Chartered wrote back in September that WTI crude prices for 2021 needed to rise to $45-$50 a barrel for any sustained increases in either producer hedging or oil drilling activity. They’ve gotten there.Fortunately for the producers, they already have a mechanism for greater flexibility in their Joint Ministerial Monitoring Committee, which meets every month. They are helped, too, by the move to virtual meetings. It’s easier to coordinate their diaries when they don’t have to block out several days of travel to OPEC’s Vienna headquarters. The problem remains, though, that with some countries pushing for special treatment and others questioning their commitment to the whole OPEC project, nobody wants to relinquish their seat at the decision-making table.At the start of the pandemic, the OPEC+ alliance found itself in disarray. Russia refused to accept deeper output cuts at their March meeting, triggering a brief free-for-all that took crude prices below $20 a barrel. A meeting in April dragged on for days when Mexico refused to accept reductions that lasted more than a month. The country eventually delivered a record output cut of 10 million barrel a day after a smoke-and-mirror arrangement that saw President Donald Trump offer up some of the U.S. output cuts in Mexico’s place.It saddens me to find I’m repeating myself. When Covid-19 was first beginning to emerge back in February, I wrote that the producers have to be able to “react quickly to the rapidly-changing world around them.” They failed then. Let’s hope they can pull it off this time.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- South Africa fell deeper into junk territory after Moody’s Investors Service and Fitch Ratings lowered the country’s credit ratings on Friday.The ratings cuts come after the coronavirus pandemic pummeled the government’s finances and pushed the economy into its longest recession in almost three decades. Finance Minister Tito Mboweni said on Saturday the downgrades will have immediate implications for borrowing costs and will constrain the fiscal framework.Still, South Africa had already dropped out of the FTSE World Government Bond Index after Moody’s removed the nation’s last investment-grade rating in March. That may reduce the impact of the downgrades, according to Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Bank.“The market implications of the latest rating action looks more benign,” Khan said in an emailed note. “If anything, reform momentum is looking more positive near term.”Moody’s cut the nation’s foreign- and local-currency ratings to Ba2, two levels below investment grade, from Ba1. The outlook remains negative. Fitch cut its ratings to BB-, three levels below investment grade, from BB, also with a negative outlook.Only five of 23 economists surveyed by Bloomberg predicted Moody’s would lower its rating, while just four out of 21 expected a downgrade from Fitch before the end of the year. The negative outlook on both ratings mean the next moves from these companies could be even further cuts that would signal an increased probability of a default.Wage FreezeThe pandemic has weighed on revenue collection and raised the cost of borrowing. Mboweni’s medium-term budget last month showed plans to pare the government salary bill, which has surged 51% since 2008, as part of an effort to start bringing its debt trajectory down after 2026.However, that wasn’t enough to stave off ratings downgrades until after the February 2021 budget, as many economists had predicted.“The key driver behind the rating downgrade to Ba2 is the further expected weakening in South Africa’s fiscal strength over the medium term,” Moody’s said in a statement. Fitch said in a separate release that “GDP is expected to remain below 2019 levels even in 2022.”The proposed wage freeze risks a backlash from politically influential labor groups that are already in a legal battle with the government to honor an agreed pay deal. If state salaries can’t be cut, there’s limited room for offsetting measures in other expenditure areas. The central bank has signaled it won’t reduce interest rates any further and there’s no room in the budget to increase spending to boost growth.There is “an urgent need for government and its social partners to work together to ensure that we keep the sanctity of the fiscal framework and implement much-needed structural economic reforms to avoid further harm to our sovereign rating,” Mboweni said Saturday.S&P on Friday kept its assessment of South Africa’s foreign-currency debt three levels below investment grade, with a stable outlook.(Updates with Treasury comment from second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.