There has been an outbreak of unity within Opec, just when it needed it the most.
Tanker owners are looking to rejuvenate their fleets. Nothing new, I hear you say, ordering new ships is what owners do.
But talk of a nascent consolidation in the sector suggested things could be different this time around. Shipowners with strong enough balance sheets could be looking at other ways to expand, rather than ordering new vessels and adding to an oversupplied market.
When I saw thick smoke coming out of my computer, I was mortified. If it was the hard drive that caught fire, all my precious files – from unfinished university essays to party pictures to music files – were gone forever.
That was in 1997. If only there was a way at the time to back up those files automatically…
Presenting BP’s Statistical Review of 2016 today, chief executive Bob Dudley said: “The oil market returned broadly back into balance by mid-year, but prices continued to be depressed by the large overhang of built-up inventories.”
Dudley’s definition of balance here is a straightforward matching of production and demand. Opec and its partners in output cuts prefer to factor in the inventories that are weighing on prices. And weighing they are. Brent has failed to break above the mid-$50s/bl, despite a disciplined cuts programme that has been in place since the start of this year, and has found itself most comfortable at well below $50/bl — below year-earlier levels — since last month’s agreement to extend the cuts.
The crisis pitting Saudi Arabia and the UAE against Qatar is the most serious turbulence to afflict the Gulf Co-operation Council (GCC) bloc since what is now called ‘the First Gulf War’, when non-member Iraq briefly invaded and occupied member state Kuwait.
The major difference between today’s crisis and those dramas, of course, is that there is no military dimension now, and no military escalation is to be expected. But the political fallout is massive.