The prices of crude oil rose on Monday as hopes for an end to the year long tariff row between the United States and China approached a close.
 
Also the production cut deal by members and allies of the Organization of Petroleum Exporting Countries, OPEC, contributed to price rally.
 
International Brent futures were at 65.25 dollars a barrel at 07:13 GMT, up 18 cents, or 0.3 per cent, from their last close, while US West Texas Intermediate crude futures were at 55.94 dollars per barrel, up 14 cents or 0.3 per cent.
 
There are indications that US and China are close to a deal that would roll back US tariffs on at least 200 billion dollar worth of Chinese goods, just as Beijing has also pledged structural economic changes and elimination of retaliatory tariffs on US goods, a source briefed on negotiations said on Sunday in Washington.
 
The “substantive progress” China and the US have made in their trade talks has been “well-received” in both countries and around the world, a senior Chinese official said on Monday.
 
According to a Reuters’ survey, Supply from OPEC fell to a four-year low in February, as top exporter, Saudi Arabia and its allies over-delivered on the group’s supply pact while Venezuelan output registered a further involuntary decline.
 
“OPEC exports are off by over 1.5 million barrels per day (bpd) since November,” Barclays bank said in a note released on Sunday.
 
“The supply picture looks generally tighter this year,” said energy analysts at Fitch Solutions in a note on Monday, adding they expected Brent to average 73 dollars per barrel in 2019.
 
There are also indications that Oil prices have been further pushed up by US sanctions against OPEC-members Iran and Venezuela. Barclays bank is of the view that this has resulted in a reduction of around two million bpd in global crude supply.
 
There are also signs that the US oil production boom of the past years, which has seen crude output rise by more than two million bpd since early 2018 to more than 12 million bpd, may slow down.
 

U.S. President Donald Trump said he had asked China to immediately remove all tariffs on U.S. agricultural products because trade talks were progressing well.

He also delayed plans to impose 25 percent tariffs on Chinese goods on Friday, as previously scheduled.

“I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.) based on the fact that we are moving along nicely with Trade discussions,” Trump said on Twitter, pointing out that he had not raised tariffs on Chinese goods to 25 per cent from 10 per cent on March 1 as planned.

“This is very important for our great farmers – and me!” Trump said.

Farmers are a key constituency for Trump’s Republican Party, and the U.S. president’s trade war with China has had a heavy impact on them. Beijing imposed tariffs last year on imports of soybeans, grain sorghum, pork and other items, slashing shipments of American farm products to China.

U.S. Agriculture Secretary Sonny Perdue said this week that U.S. trade negotiators had asked China to reduce tariffs on U.S. ethanol, but it was not immediately clear whether Beijing was willing to oblige.

Trump’s post on Twitter came several hours after the U.S. Trade Representative’s office said that it would delay the scheduled hike in tariffs on $200 billion worth of Chinese goods.

The notice, due to be published in the Federal Register next Tuesday, says it is “no longer appropriate” to raise the rates because of progress in negotiations since December 2018. The tariff would remain “at 10 percent until further notice.”

In a statement on Saturday, China said it welcomed the delay.

Speaking at a separate briefing in Beijing, a Chinese government official said both countries were working on the next steps, though he gave no details.

“China and the United States reaching a mutually-beneficial, win-win agreement as soon as possible is not only good for the two countries but is also good news for the world economy,” said Guo Weimin, spokesman for the high profile but largely ceremonial advisory body to China’s parliament.

A tariff increase to 25 percent from 10 percent was initially scheduled for Jan. 1, but after productive conversations with Chinese President Xi Jinping, the Trump administration issued a 90-day extension of that deadline.

Trump had said on Sunday he would again delay the increase because of progress in the talks.

In Washington this week, the US and China are due to hold their highest level talks since the two sides struck a temporary truce to their trade war.
 
They have until 1 March to come up with some sort of compromise or tariffs will be hiked again, and we march back into a trade fight that affects us all.
 
China watchers tell me Beijing is under increasing pressure to make a deal.
 
Here's why:
 
A slowing economy:
The trade war may not have caused China's slowdown, but it is definitely making things worse.
 
Growth data released last week showed China posted the slowest growth rate since 1990 but that in itself is not as worrying as other data points, including that consumer sentiment and retail sales are flatlining or weakening fast.
 
Small and medium-sized companies in China are feeling the chill with lower orders and inventories.
 
How worrying is China's slowdown?
A quick guide to the US-China trade war
Just how much pressure the Communist Party is facing because of a weakening economy was reflected in a rare acknowledgement by President Xi Jinping, whose legitimacy is based in part in keeping China strong.
 
Losing its factory lustre?
There is also evidence to show that foreign firms are diversifying their sourcing, production and supply chains away from China, if not pulling out altogether.
 
This recent survey conducted by QIMA, a leading Asian supply chain auditor, shows that 30% of more than 100 global businesses are diverting their sourcing from China to other countries.
 
As many as three-quarters of these companies have started sourcing suppliers in new countries.
 
If this trend continues then jobs in Chinese factories are at risk - a recent report looking at China's economy by JP Morgan points to rising unemployment as a major near-term risks.
 
Social stability is predicated on China's economic stability, and the Communist Party is well aware that its credibility lies in delivering the Chinese dream to its people.
 
The Huawei factor:
The fate of Huawei also hangs in the balance, both from a business and diplomatic standpoint.
 
China is big on symbolism and "doesn't believe in coincidences" Einar Tangen, an advisor on economic affairs for the Chinese government, told me on the line from Beijing.
 
Mr Tangen pointed to the arrest of Meng Wanzhou, the daughter of Huawei founder, which took place on the day President Xi and US President Donald Trump met at the G20 summit and declared the temporary truce between the two sides, setting the 90 day deadline for talks.
 
What's going on with Huawei?
The Huawei exec trapped in a gilded cage
Another date looms next week, with the latest round of talks taking place on the day the US has to file the extradition treaty for Ms Meng.
 
"Both of these dates are seen as attempts by the US to use Huawei as leverage in the trade talks," says Mr Tangen.
 
The US is also reportedly preparing an investigation into Huawei which could see it banned from buying American chips, a move that crippled China's ZTE last year.
 
Mr Tangen warns that pushing Beijing will backfire.
 
"The Chinese see this as the US trying to push China down," he says.
 
"This is not about right or wrong. They view this in context of the 100 years of humiliation they suffered at the hands of the West and they don't want that repeated."
 
American firms want a deal But the US is also under pressure to make a deal.
 
American firms in China have complained about the impact of Trump's tariffs on their business but want the US to make a good deal.
 
"This administration has been willing to risk the health of the US economy with tariffs," says Stephen Kho, international trade partner at law firm Akin Gump in Washington DC.
 
"So now that we've come this far, businesses want to take advantage of this moment and walk away from these talks with something significant. They will want to see China's offer to buy more American goods along with promises of systemic changes."
 
A solution to the US-China trade war is good for us all.
 
The longer these two superpowers slap tariffs on each other's goods, the more expensive products will be for us, companies will report lower profits, and global growth will slow.
 
Both sides are under pressure to make a deal. But this is ultimately, as Mr Kho also points out, "a game of chicken." Whoever blinks first could also be the biggest loser.
 
 
Source: Business Insider
China's economy grew at its slowest rate since 1990, stoking fears about the impact on the global economy.
 
China expanded at 6.6% in 2018, official figures out Monday showed.
 
In the three months to December, the economy grew 6.4% from a year earlier, down from 6.5% in the previous quarter.
 
The data was in line with forecasts but underlines recent concern about weakening growth in the world's second-biggest economy.
 
China's rate of expansion has raised worries about the potential knock-on effect on the global economy. The trade war with the US has added to the gloomy outlook.
 
The official figures out Monday showed the weakest quarterly growth rate since the global financial crisis.
 
China's economic slowdown is not news in itself. Beijing has broadcast this for several years, that it's going to focus on the quality not quantity of growth.
 
But still, we should be worried.
 
Slower growth in China means slower growth for the rest of the world.
 
It accounts for one-third of global growth. Jobs, exports, commodity producing nations - we all depend on China to buy stuff from us.
 
Slower growth in China also means it is harder for China to address its mountain of debt, even with the Communist Party's undoubted ability to be able to support the economy.
 
Growth has been easing for years, but concern over the pace of the slowdown in China has risen in recent months as companies sound the alarm over the crucial market.
 
Earlier this month Apple warned weakness in China would hit its sales.
 
Carmakers and other firms have spoken out on the impact of the trade war with the US.
 
Policymakers in China have stepped up efforts in recent months to support the economy.
 
Those measures to boost demand include speeding-up construction projects, cutting some taxes, and reducing the level of reserves banks need to hold.
 
Capital Economics China economist Julian Evans-Pritchard said the Chinese economy remained weak at the end of 2018 "but held up better than many feared".
 
"Still, with the headwinds from cooling global growth and the lagged impact of slower credit growth set to intensify... China's economy is likely to weaken further before growth stabilises in the second half of the year."
 
 
Source: Business Insider.
Growth of the world economy is expected to slow as the US-China trade conflict takes its toll and undermines confidence, the World Bank said Tuesday in its semi-annual forecast.
 
The World Bank cut the global GDP forecast to 2.9 per cent this year and 2.8 per cent in 2020, slightly below the previous forecast, but warned that risks were rising and urging policymakers to prepare for a storm.
 
US economic growth is expected to slow this year by four-tenths of a point, falling to 2.5 per cent down from 2.9 per cent in 2018, and to slow even further next year to 1.7 per cent, according to the Global Economic Prospects report.
 
 
 
Source: Business Insider
Oil has rallied in the new year, with a nine-day run of gains for WTI, its best run since 2010.
Brent crude is also rallying, if those contracts close up today - a 10th consecutive session - it would be the futures' best streak for 30 years.
 
Traders have been buoyed by positive sentiment out of US-China trade war talks and efforts by Saudi Arabia and OPEC and others to stabilise markets, after plunging last month.
 
"The market [is] returning to some sort of order, having previously been out of whack," said Stephen Innes, head of trading for Asia Pacific at futures brokerage Oanda.
Brent crude is up 0.6% by mid-morning on Friday.
 
The wobbles in stock markets have been grabbing all the attention lately, but meanwhile, oil is enjoying a stunning rally into the new year.
 
Oil traders are factoring in an improvement in US-China trade relations and continued efforts by OPEC and others to stabilise the market after a brutal end to last year.
 
Brent crude futures are now trading up for their 10th consecutive day, which would mark its best performance since the introduction of futures contracts in June 1988. This week's performance has seen Brent rise 8.4%, its best weekly gains for over two years as improved sentiment boosts the commodity's performance.
 
Fore WTI, the US benchmark, oil has risen 24% since hitting a low on Christmas eve.
 
"The macro drivers of prices has been the more dovish Federal Reserve and better news coming out of the US-China trade dispute," Stephen Innes, head of trading for Asia Pacific at futures brokerage Oanda, sadi in an interview. "The market is reading between the lines that any deal would boost China's economy and really improve demand."
 
US trade representatives were in China for talks earlier this week, which raised hopes of a trade deal that would have a positive impact on oil prices.
 
Similarly, last December's "OPEC+" summit in Vienna brought a round of supply cuts to the oil market, which are now finally being priced in amid a greater risk-on atmosphere. Despite that prices are still around 30% lower than their October highs.
 
Saudi Arabia's energy minister, Khalid Al-Falih, said that pledged reductions of 1.2 million barrels a day are "more than sufficient to balance the market." Data out of Saudi Arabia supports the proposed axe in supply and demonstrated a cut in exports to the US with inventory figures also broadly positive.
 
Investor sentiment has also been boosted by comments from the Federal Reserve. Fed Chairman Jerome Powell and Richard Clarida have said that the central bank will be cautious about pushing ahead with future rate hikes after raising interest rates four times last year.
 
Brent crude is trading up 0.6% by midmorning on Friday while WTI is up 0.9%.
 
 
Source: Business Insider
Oil prices rose by around 1 per cent on Wednesday, extending gains from the previous session on hopes that Washington and Beijing may soon resolve trade disputes that have cast a dark shadow over the global economy.
 
U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were at $50.42 per barrel at 0752 GMT, up 64 cents, or 1.3 per cent, from their last settlement.
 
That marked the first time this year that WTI has topped $50 a barrel.
 
International Brent crude futures LCOc1 were up 69 cents, or 1.2 per cent, at $59.41 per barrel.
 
Both crude price benchmarks had already gained more than 2 per cent in the previous session.
 
“Crude continues to extend gains as early reports from Beijing, regarding trade negotiations, are fuelling optimism around successful trade talks between the U.S. and China,’’ said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
 
“After a dreadful December for risk markets, crude oil continues to catch a positive vibe,’’ Innes said.
 
The oil price jumps were in line with Asian stock markets, which climbed to 3-1/2 week highs on Wednesday.
 
Trade talks in Beijing between the world’s two biggest economies entered the third day on Wednesday, amid signs of progress on issues including purchases of U.S. farm and energy commodities and increased U.S. access to China’s markets.
 
State newspaper China Daily said on Wednesday that Beijing is keen to put an end to its trade dispute with the United States, but that it will not make any “unreasonable concessions” and that any agreement must involve compromise on both sides.
 
If no deal is reached by March 2, Trump has said he will proceed with raising tariffs to 25 per cent from 10 per cent on $200 billion worth of Chinese imports at a time when China’s economy is slowing significantly.
 
Citing the trade tensions, the World Bank expects global economic growth to slow to 2.9 per cent in 2019 from three per cent in 2018.
 
“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead,’’ World Bank Chief Executive Officer, Kristalina Georgieva, said in a semi-annual report released late on Tuesday.
 
More fundamentally, however, oil prices have been receiving support from supply cuts started at the end of 2018 by a group of producers around the Organisation of the Petroleum Exporting Countries (OPEC) as well as a non-OPEC member, Russia.
 
The OPEC-led cuts are aimed at reining in an emerging supply overhang, in part because U.S. crude oil output (C-OUT-T-EIA) surged by around two million barrels per day (bpd) in 2018, to a record 11.7 million bpd.
 
Official U.S. fuel storage data from the Energy Information Administration (EIA) is due at 1800 GMT on Wednesday.
 
 
 
Source: The Reuters
A Chinese defense industrial giant recently showed off a Chinese version of the US military's GBU-43/B Massive Ordnance Air Blast (MOAB), which is more commonly called the "Mother of All Bombs."
The unnamed weapon developed by China North Industries Group Corporation Limited is said to be China's largest non-nuclear weapon.
Much smaller and lighter than the US MOAB, which is delivered by C-130 Hercules transport aircraft, China's weapon is dropped by the H-6K bombers.
China's got a new bomb, and it's a really big one.
 
A major Chinese defense industry corporation has, according to Chinese media, developed a deadly new weapon for China's bombers.
 
Referred to it as the "Chinese version of the 'Mother of All Bombs,'" this massive aerial bomb is reportedly China's largest non-nuclear bomb, the Global Times explained Thursday, citing a report from the state-run Xinhua News Agency.
 
People's Liberation Army Air Force's bomber H-6K is on display on the opening day of the Airshow China 2018 on November 6, 2018 in Zhuhai, Guangdong Province of China.
The weapon, said to weigh several tons, was developed by China North Industries Group Corporation Limited. A recent promotional video showed the weapon in action. The video, which was apparently released at the end of December, marked the first public display of this particular weapon.
 
Carried by the Chinese Xi'an H-6K bombers, which is a version of the older Soviet Tupolev Tu-16 bombers, the weapon almost completely fills the bomb bay, which would make it roughly five to six meters in length.
 
Chinese military analysts and observers argue that China's large bomb could eliminate fortified targets, clear out landing areas, and terrify enemy combatants.
 
Indeed, massive airdropped bombs with tremendous destructive power play an undeniable role in psychological warfare, and not just through seismic shock. During the Gulf War, two US MC-130E Combat Talons dropped a pair of BLU-82 Daisy Cutters, the largest conventional bombs in the US arsenal at that time. A British SAS commando about 160km away reportedly radioed to headquarters, "Sir! The blokes have just nuked Kuwait!"
 
The next day, a US aircraft dropped leaflets that read: "You have just experienced the most powerful conventional bomb dropped in the war ... You will be bombed again soon ... You cannot hide. Flee and live, or stay and die."
 
The GBU-43/B Massive Ordnance Air Blast bomb is pictured in this undated handout photo
Last year, while waging war against militants in Afghanistan, the US military dropped a GBU-43/B Massive Ordnance Air Blast (MOAB) weapon, more commonly known as the "Mother of All Bombs," on the Islamic State.Although China is using the same nickname for its bomb, the Chinese weapon is smaller and lighter than its American counterpart. Chinese media speculated that the size restrictions may have been intentional, ensuring the weapon could be dropped from a bomber.
 
The 11-ton US bomb is delivered by a C-130 Hercules transport aircraft.
 
 
Source: Business Insider
The US state department has urged Americans to “exercise increased caution” when travelling to China after a spate of high-profile detentions.
 
Its updated advice warns that US citizens have been arbitrarily prevented from leaving the country.
 
The warning comes as two Canadian citizens remain in detention in China.
 
Former diplomat Michael Kovrig and businessman Michael Spavor were arrested last month as relations between the two countries worsened.
 
The pair face accusations of harming national security and, on Thursday, China’s top prosecutor said they had “without a doubt” violated the law.
 
Separately, three US citizens were accused of committing “economic crimes”and barred from leaving China in November.
 
Victor and Cynthia Liu, who are the children of a fugitive businessman, and their mother, Sandra Han, have reportedly been detained since June.
 
“US citizens may be detained without access to… consular services or information about their alleged crime,” the advisory reads.
 
“Individuals not involved in legal proceedings or suspected of wrongdoing have also been subjected to lengthy exit bans in order to compel their family members or colleagues to co-operate with Chinese courts,” the state department said in a separate warning issued last January.
 
The latest advice also warns of “special restrictions” on those who hold dual US-Chinese citizenship.
 
Dual-citizenship is not allowed under Chinese law, and the state department has warned that US-Chinese nationals can be detained and denied US assistance in China.
 
It advises travelling on a US passport with a valid Chinese visa and asking officials to notify the US embassy immediately if you are detained or arrested.
 
 
Source: PmNews

Boeing Co opened its first 737 completion plant in China on Saturday, a strategic investment aimed at building a sales lead over arch-rival Airbus in one of the world's top travel markets that has been overshadowed by the U.S-China trade war.

The world's largest planemaker was also poised to deliver the first of its top-selling 737s completed at the facility in Zhoushan, about 290 km (180 miles) southeast of Shanghai, to state carrier Air China during a ceremony on Saturday with top executives from both companies.

Boeing and Airbus have been expanding their footprint in China as they vie for orders in the fast-growing aviation market, which is expected to overtake the United States as the world's largest in the next decade.

Boeing invested $33 million last year to take a majority stake in a joint venture with state-owned Commercial Aircraft Corp of China (COMAC) to build the completion centre, which installs interiors and paints liveries.

Chicago-based Boeing calls itself the top U.S. exporter and delivered more than one out of every four jetliners it made last year to customers in China, where it forecasts demand for 7,700 new airplanes over the next 20 years valued at $1.2 trillion.

However, the plant's inaugural ceremony was overshadowed by tensions between the United States and China as they engage in a bruising tit-for-tat tariff war. The world's two largest economies are in a 90-day detente to negotiate a trade deal.

"Am I nervous about the situation? Yeah, of course. It's a challenging environment," John Bruns, President of Boeing China, told reporters on a conference call earlier on Saturday.

"We have to keep our eye on the long game in China. Long term, I'm optimistic we will work our way through this," he said.

While the trade frictions have hurt businesses such as U.S. soy bean farmers and Chinese manufacturers, their impact on Boeing has been unclear. U.S.-made aircraft have so far escaped Beijing's tariffs.

Bruns said he remained optimistic about the outcome of trade talks between the United States and China and described aviation as a "bright spot" amid tensions between the two countries.

Asked about the possibility of technology transfer agreements between Boeing and COMAC, Bruns stressed that the purpose of the plant was for installing seats, painting vehicles, and completing the planes' final delivery.

"That's only a part of what we do in the production of airplanes," he said.

Boeing aims eventually to hit a delivery target of 100 planes a year at Zhoushan, although Bruns deflected a question on how quickly it would reach that level and said Boeing had no plans to expand work to other aircraft types.

Boeing also hopes the plant will relieve pressure at the Seattle-area facility where it plans to boost production next year of its best-selling 737 narrowbody aircraft but has struggled with production delays.

 

  1. Opinions and Analysis

Calender

« April 2019 »
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30