As the volatility in oil prices continue, there have been different opinions on its future with some predicting a three digit rate in a few years while a few hopeful of a downturn. Banking major Barclays has a rather interesting take on the situation, reasoning out that the prices would fall to around $70 per barrel next year rather climb higher.
A report published by Barclays mentions that the Iran crisis might be all but over, as Iranian oil exports have crashed to nearly 0.5 million barrels per day (bpd) – a number which it believes might not go down any further. Despite the U.S. tightening the screws around countries looking to buy Iran’s oil, countries like India and China still continue their trade with Iran, and this situation might not change in the future.
Barclays contends that the low spare capacity scare from OPEC is not something to worry about, as it believes there is ample capacity in store, although Saudi Arabia continues to shield the strength of its reserves. Barclays reasons out that OPEC’s hesitation to increase production is not because it wants to push the prices up, but because it might cause the prices to crash if there’s an economic slowdown.
Did you know?
According to the National Retail Federation, last month major U.S. seaports handled import volume of an estimated 1.84 million 20-foot equivalent units, a standard measure for container cargo. That was up 2.7% from the same month in 2017, following a 3.4% year-over-year rise in August and a record-setting July, with 1.9 million loaded TEUs arriving at docks.
“If you’re not a coastal county, it makes sense that you don’t pay as much attention to evacuation plans. [But] places are flooding now that may have never flooded before.”
– John Renne, director of Florida Atlantic University’s Center for Urban and Environmental Solutions, on storms like Florence and Michael causing flooding in inland regions.
In other news:
Stock market chaos sparks oil selloff
The plunge in global equities on Wednesday and Thursday dragged down crude oil, with even concerns about falling Iranian supply not enough to keep crude from a steep selloff. (Oilprice)
Piracy Rises 3% in Asia
A total of 64 incidents of piracy and armed robbery against ships were reported in Asia during January-September 2018, a 3 percent increase compared to the same period for 2017. (Marine Link)
Big lenders make push to liquidate Sears
Banks discuss emergency financing, while retailer offers to close hundreds of more stores. (Wall Street Journal)
Hurricane Michael hit the parts of Florida least prepared to fleet its wrath
At least seven people are dead, 900,000 homes and businesses have lost power, and an estimated 325,000 people who fled the storm have to find their way back home. (Wired)
Hapag-Lloyd and ONE set to operate joint feeder services round the world
Under the terms of a “bilateral strategic feeder network cooperation agreement”, the lines will share space on their respective feeder vessels. (The Loadstar)
China is facing a historic fall in auto sales, as sales declined by 11.6% year-on-year to register 2.39 million vehicles this September. This is the third straight month that sales have fallen, as July and August witnessed a 4% and 3.8% reduction respectively.
There could be several reasons for this fall. For instance, the Chinese stock market’s spectacular crash last month has resulted in low consumer confidence in the market and the continuing China-U.S. trade war has kept the auto makers at the edge of their seats. The Chinese auto association had predicted a 3% sales-growth this year, but with the way things have turned out, they have since then gone back on the estimation saying it is unrealistic under the current circumstances.
The Chinese passenger car segment would be facing its first annual sales decline since 1990, with a forecasted 1.6% drop in sales compared to 2017. Notably, when China witnessed an auto sales decline over three successive months in 2015, the government slashed its light-vehicle sales tax to 5%, which helped in reviving the market.
Hammer down everyone!