NEW YORK, March 23 (Reuters) – Crude prices rose on Friday, hitting their highest since late January after the Saudi energy minister said OPEC and allied producers would need to keep coordinating supply cuts into 2019, and as concerns grew over the future of Iranian crude exports.

Brent crude futures jumped $1.54, or 2.2 percent, to settle at $70.45 a barrel. For the week, Brent was up about 6.4 percent, its strongest weekly rise since July.

U.S. West Texas Intermediate (WTI) crude futures also had their biggest weekly gain since July, at 5.5 percent. WTI settled at $65.88 a barrel, up $1.58, or 2.5 percent.

U.S. hedge funds and other money managers raised their bullish bets on WTI in the week to March 20 by 34,488 contracts to 488,438, the U.S. Commodity Futures Trading Commission (CFTC) said.

“There are a number of bullish things to hang the hat of the rally on this week; be it the inventory report … or the tariff news, or the heightened tensions between Saudi and Iran,” said Matt Smith, director of commodity research at Clipper Data in Louisville, Kentucky.

President Donald Trump’s decision to replace national security adviser H.R. McMaster with John Bolton, who is seen as more hawkish on Iran, also supported prices, Smith said.

Global stock markets fell as investors worried about a trade stand-off between the United States and China. Trade jitters could also hit oil markets, but most analysts said other bullish factors outweighed them for now.

U.S. energy companies added four oil rigs in the week to March 23 General Electric Co’s Baker Hughes energy services firm reported. That brought the total number of rigs to 804, the highest in three years.

While U.S. production keeps rising, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers have curbed output. Saudi Energy Minister Khalid al-Falih told Reuters the curbs, instituted in January 2017, would need to continue into 2019 to reduce global inventories.

The demand outlook also supported oil.

“We’re continuing to see signs that demand is really healthy; total U.S. demand is more than 1 million barrels a day more than it was a year ago,” said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.

“As the fundamental picture continues to tighten, that’s going to attract further length in the market,” he said.

Morgan Stanley predicted Brent would hit $75 a barrel in the third quarter as seasonal demand picks up. It noted the market is “only three-four weeks away from peak refinery maintenance, after which crude and product demand should accelerate … Global inventories are already at the bottom end of the five-year range.”

(Additional reporting by Shadia Nasralla, Henning Gloystein and Roslan Khasawneh Editing by David Gregorio and Phil Berlowitz)

Copyright 2018 Thomson Reuters.

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(Bloomberg) — Ready the cash-printing machines — the world’s most sophisticated refineries are about to enjoy great times thanks to what might seem like a minor tweak in rules for the type of fuel ships consume.

From 2020, vessels must buy fuel with less sulfur, or alternatively be fitted with equipment to curb emissions of the pollutant. One thing is clear: only a tiny fraction of the merchant fleet will have such gear when the rules enter force, since many shipowners argue it’s the responsibility of refineries to sell the right fuel.

That’s fantastic news for complex plants, including some of the biggest on the U.S. Gulf Coast, in Europe and in Asia. Unlike simpler refineries, they can already make marine gasoil — a distillate fuel similar to diesel that ships are going to need — without churning out leftover, non-compliant fuel oil, according to Alan Gelder, vice president for refining, chemicals and oil markets at Wood Mackenzie Ltd. in London.

“They’ll print money,” he said. “If the shipping industry needs more clean fuels, then that’s good for refining.”

The new sulfur standards, established by the International Maritime Organization in 2016, aim to cut the presence of a pollutant that has been blamed as a contributor to human health conditions like asthma and environmental damage like acid rain. Some shippers say that in an extreme scenario, the changes could upend world trade if the cost of compliance is too high.

The existing global standard is generally 3.5 percent sulfur in fuel oil — normally the residue when refineries make higher-value products like gasoline, diesel and jet fuel. The new IMO rules establish a 0.5 percent limit, encouraging refiners to make cleaner, compliant fuel to meet rising demand from the shipping industry.

‘Field Day’

Plants that have greater flexibility on the types of crude that they process — such as Reliance Industries Ltd.’s Jamnagar facility in India and those on the U.S. Gulf Coast — will be among the top beneficiaries from the rule change, said Eugene Lindell, a senior analyst at JBC Energy GmbH in Vienna.

“Crude feedstock costs will be lower, allowing for an exceptionally high margin environment,” he said. “They will have a field day.”

More than 80 percent of U.S. Gulf Coast refineries have coking units that can create transport fuels from the residual fuel oil from heavy crude, according to research from Morningstar Inc. Reliance didn’t respond to a request for comment.

As ships move away from high-sulfur fuel oil, they’ll increasingly favor distillate fuels like marine gasoil and other compliant fuels. That stands to benefit refiners who already produce a high ratio of distillates to dirty fuel oil.

BP Plc is best-placed among Europe’s oil majors to benefit from the IMO rule change, analysts at JPMorgan Chase & Co., including Christyan Malek, said in a research note earlier this month. Distillates account for about 47 percent of the energy giant’s total fuels output, while high-sulfur fuel oil comprises about 3 percent, according to BP.

Rising Margins

In the European Union, the rule change will raise refining margins by an average of 60 cents, to $8.10 per barrel in 2020, JPMorgan said. Other companies are also set to benefit, according to the bank, which highlighted Finland’s Neste Oyj and Spain’s Repsol SA as having among the highest proportion of capacity at their facilities to avoid making fuel oil.

“We are going to take advantage of this new margin in a significant way because our system is fully prepared to do that,” Repsol Chief Executive Officer Josu Miguel said during a Feb. 28 earnings call, adding that the company will “experience two, three, four good years” due to its refining capabilities. Fuel oil accounts for just 4-to-5 percent of production at Repsol, which has refineries in Spain and Peru, he said.

The fuel shift is already starting to appear in futures prices. In Europe, the premium that low-sulfur fuel oil will attract over its dirtier counterpart in January 2020 has grown by 66 percent since the start of the year, according to fair value data compiled by Bloomberg. In Singapore, one of the world’s primary hubs for ship refueling, the premium of gasoil to crude in January 2020 has risen by 23 percent during the same time frame.

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KUALA LUMPUR, March 23 (Reuters) – Asia’s oil and gas producers are starting to revive projects aimed at deflating years of ballooning energy imports after new investment dried up following the 2014 industry crisis.

Spending has so far been driven mainly by state oil companies such as India’s ONGC, Thailand’s PTTEP and PetroVietnam, which need to produce more oil and gas to ensure their countries’ energy security, executives said this week during an industry event in Kuala Lumpur, Malaysia.

Asia is by far the biggest, fastest-growing consumer of oil, yet its output is falling faster than in any other region. That mismatch more than doubled Asia’s oil import bill to around $500 billion last year, compared with year 2000 levels.

With oil prices back above $60 per barrel and at times flirting with $70 a barrel, oilfield service providers say there is renewed appetite for producers to spend and importers to cut import bills by investing in production.

“Asia is a net importer of energy. I think there’s a strong desire from Southeast Asian organizations to change that trend. We’ll see a lot more potential developments here to try to balance that equation,” said Ian Prescott, vice president for Asia with U.S. engineering company McDermott.

Fifty oil and gas fields in Southeast Asia, with a collective 4 billion barrels of oil equivalent in resources, will likely be approved for development between 2018 and 2020, according to consultancy Rystad Energy, requiring some $28 billion of capital expenditure from final investment decision (FID) to first production.

Spending Revival

In one sign of revival, Abu Dhabi-owned Mubadala Petroleum, Malaysia’s state-owned Petronas and Anglo-Dutch oil major Royal Dutch Shell agreed to spend $1 billion on a shallow-water gas project in Malaysia this week.

In India, changes to gas pricing policies revived activities in its eastern deepwater fields, led by ONGC and a joint venture between Reliance Industries and BP.

“India has waited too long to enter deepwater. Deepwater development makes more sense for the country (India) than importing LNG at $8 per million British thermal units,” Ashish Bhandari, a vice president at GE-owned oil service company Baker Hughes, said at the OTC Asia conference.

In Southeast Asia, PetroVietnam is developing a large gas field known as Block B, while Thailand’s PTTEP is on the hunt for more gas supplies in the region to meet demand in Thailand and Myanmar.

Despite the uptick in activity, exploration for new oil and gas remains lower in Asia than elsewhere, especially onshore North America and in the Atlantic basin.

Kevin Robinson, vice president of Malaysia’s oil and gas service company Sapura Energy, said the main factors deterring investment in Asia were tough fiscal regimes, cumbersome bureaucracies, and maturing fields with limited future reserves.

“It’s a reality check for governments in Asia to look at how much investment they are getting, and how they need to improve their fiscal terms to attract more investment,” Robinson said.

ONGC’s director of offshore, Rajesh Kakkar, said the “easy oil is gone … what is left is deepwater, high pressure, and high temperature”, making extraction more costly.

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SINGAPORE – How regulators manage crypto-currencies risks and not stifle innovation continues to be the challenge facing central banks, said Mr Ravi Menon, the Monetary Authority of Singapore’s managing director.

MAS has been watching the crypto space with great interest, said Mr Menon on Thursday (March 15) at a payments conference.

Using the term “crypto tokens” rather than “crypto currencies” or “crypto assets”, he said that a second generation of crypto tokens is emerging to address some of the current challenges related to network congestion, transaction time, energy costs, money laundering risks, and more importantly, price stability.

“Some of the best minds in the field are applying their creative energies to make crypto tokens mainstream,” he said.

Not all developers and programmers in the crypto world are anti-establishment anarchists, he said.

“Many may have been 10 years ago, but a growing number are married and have kids now! They know the value of stability,” said Mr Menon.

Bitcoin – the most well-known of the crypto currencies or assets – hit a high of nearly US$20,000 (S$26,400) in December last year and then lost two-thirds of its value in just over a month.

The challenge for central banks and regulators is this: how can we harness the potentially transformative benefits of blockchain technology and crypto tokens while containing some of their risks, he said.

MAS has chosen not to regulate crypto tokens directly. Instead, it is focusing on the activities associated with crypto tokens, evaluating the different kinds of risks that these activities pose, and considering the appropriate regulatory responses, all the while seeking to ensure that innovation is not stifled, said Mr Menon.

“The key risks MAS is monitoring in the crypto world are in the areas of financial stability, money laundering, investor protection and market functioning,” he added.

There is market risk from the direct exposure of financial institutions to crypto tokens; credit risk through unsecured lending to crypto token businesses; and leverage when borrowers pledge crypto tokens as collateral to borrow and buy more crypto tokens.

“MAS assesses that the nature and scale of crypto token activities in Singapore do not currently pose a significant risk to financial stability. But this situation could change, and so we are closely watching this space.”

MAS is also watching with interest developments in the US, where futures contracts based on crypto tokens have been introduced on regulated exchanges, he said. There may be some advantages here from a market integrity perspective, he said.

These exchanges have clear rules governing trade and post-trade activities, and such products could also potentially have a stabilising influence on crypto token prices as they provide two-way hedging opportunities for investors, said Mr Menon.

He also said that regulation cannot address all the concerns over crypto tokens.

“The industry too has a part to play in strengthening the ecosystem, for instance, by adopting best practices around transparency, cyber security and record-keeping.”

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Straits Times: New guidelines have been drawn up to help banks retrain staff amid rapid technological changes.

The framework launched yesterday was developed jointly by the Association of Banks in Singapore (ABS), the Monetary Authority of Singapore (MAS), the Ministry of Manpower, the National Trades Union Congress and the Singapore National Employers Federation.

They call on about 160 member banks under ABS to adhere to a new set of human resources practices that calls for financial institutions to assess the impact of technology on their workforce.

They aim to help firms reskill staff and redeploy them in areas of job growth through professional conversion programmes, according to the guidelines launched yesterday.

Banks are also asked to be inclusive in hiring, meaning they should recruit on the merits of skills required to perform the job rather than set a strict minimum number of years of experience or focus on paper qualifications alone.

The aim is also to build a “strong Singapore core” of talent in the financial sector, with the MAS working to tap the 4,000 or so Singapore professionals working overseas in the hope they will return home.

“Difficult as it may be, business as usual is not an option,” said Senior Minister of State for Law and Finance Indranee Rajah at the launch.

“We are seeing two very contrasting phenomena – in ‘hot’ areas such as IT, there is a shortage of skilled talent, for instance, in data analytics and cyber security.

“On the other hand, we also know that firms could end up with surplus staff as they look to digitise and automate various aspects of their businesses.”

OCBC Bank chief executive officer Samuel Tsien told at a panel session at yesterday’s launch that banks should commit to “not take advantage of our workforce” amid sea change.

“I’ve never liked the word ‘disruption’, because I think ‘disruption’ has got that antagonistic feel about it,” he said.

“It is a transformation imposed upon the bank by the change in our market environment, and we need to look at it that way.”

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(Bloomberg) — Crude posted a second weekly gain as a whirlwind of rising geopolitical concerns stole the shale boom’s limelight.

Futures in New York jumped 1.9 percent on Friday, driving the U.S. benchmark to post a 0.5 percent rise this week after a shaky start on Monday and Tuesday. While record U.S. production beyond 10 million barrels a day has weighed on oil’s rebound, a sense of uncertainty was heightened by a slew of events like the firing of Rex Tillerson as U.S. secretary of state, the potential delay of Saudi oil giant Aramco’s initial public offering, talks of a trade war and expectations that Venezuelan production will plunge.

“You’ve got a lot going on, on the world stage,” Tamar Essner, an analyst at Nasdaq Inc. in New York, said by telephone. “The more unexpected elements of this week’s developments were on the macro, international, geopolitical front. We are setting ourselves up for a little volatility ahead.”

While the Organization of Petroleum Exporting Countries and allied producers trim output to tighten global markets, an ongoing rise in U.S. crude production threatens to block OPEC’s efforts. However, the International Energy Agency said this week that the decline in Venezuela’s oil output could exacerbate a global supply deficit later this year.

West Texas Intermediate for April delivery advanced $1.15 to settle at $62.34 a barrel on the New York Mercantile Exchange, the highest level in more than a week. Total volume traded was about 25 percent below the 100-day average.

Brent for May settlement climbed $1.09 to end the session at $66.21 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $3.80 premium to WTI for the same month.

The market was little changed earlier in the session before spiking just before 11:30 a.m. in New York, with no news catalyst identified by traders and analysts.

“When the market falls into sideways trading in a band, you get a lot of price fluctuations that you have to turn a blind eye to,” said Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut. “This area between $58 and $64, the market inside that, is still consolidating and looking for signals.”

Yet, Bank of America Merrill Lynch analysts including Francisco Blanch wrote in a report that oil may fall by $5 in the next few weeks if “some of the bears wake up from winter hibernation” and short positions return.

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Almost three quarters believe they only have less than a year to raise funds.

Funding remains a key issue hampering the growth of fintech firms in Southeast Asia as half (52%) of startups expressed difficulty in finding sufficient funding and investors that will allow their business to grow and scale, according to EY.

Fintech firms need adequate financing fuel particularly in growth-stage equity and capital to accelerate their business model as over 60% of firms expect their next funding round to be more than $1m.

“As with most start-ups, FinTech firms may find themselves limited by funding options. Venture capitalists and banks are often the first port of call for fund-seekers, although most will not take on the credit risk of companies with a track record of less than three years,” said Ernst & Young Advisory Pte. Ltd. managing partner Liew Nam Soon.

Almost half (45%) of respondents admitted to relying on self-funding but this poses the concern of what companies can do should their initial pool of capital run out. It thus comes as no surprise that 68% note that they only have a window of less than a year to plan and raise funds to support their businesses’ growth.

The survey revealed that startups believe that the government can help address this pain point through higher tax incentives for angel investors in early stage investment and the introduction of policy reforms that will facilitate employee hiring.

“Governments play a vital role in shaping a conducive FinTech ecosystem that helps to attract and develop the right talent pool, and promotes innovation and collaboration and healthy competition. The continued evolution of the FinTech ecosystem will help to drive growth and greater financial inclusion of Southeast Asia as a region,” said EY Asean Financial Services, Ernst & Young LLP managing partner Brian Thung.

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SINGAPORE (Mar 19): SAC Advisors says the electronic payments landscape could be revolutionised in the next five to 10 years, as mobile payments become mainstream, blockchain technology starts to gain traction, and the Internet of Things (IoT) drives new payment methods.

“Over the last few years, we have seen a seismic wave of alternative payments platforms emerging, says analyst Terence Chua in a report on Monday.

“There are currently a few leading players in the digital payments space, and while there is constant debate over who will eventually be the ‘winner’, we view a single winner in this space as extremely unlikely,” he adds.

Instead, Chua believes that it is more likely that a wallet payments ecosystem that houses multiple players will emerge.

Among the current leaders in the digital payments space are PayPal, amazon Pay, Visa Checkout and MasterPass. Meanwhile, Chua opines that the smartphone players will also see wider adoption of their services – Apple Pay and Samsung Pay – in the future.

But it is in China, led by Tencent Holdings’ WeChat Pay and Alibaba Group Holdings’ AliPay, where mobile payments has taken off.

According to a report by China-based iResearch Consulting Group and US-based Forrester Research, China’s total mobile payments transactions ballooned to US$9 trillion ($11.9 trillion) in 2016, from US$15 billion in 2011. By 2020, this is expected to swell to US$47 trillion.

In comparison, total mobile payments transactions in the US stood at just US$112 billion in 2016, and is expected to grow to US$283 billion by 2020.

According to Chua, Tencent and Alibaba are now expanding their services globally to other Asian markets, from Indonesia to India.

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Hackers compromised computer systems at a petrochemical plant in Saudi Arabia last August, aiming to not only destroy or steal data but to cause a deadly explosion, investigators and cybersecurity experts told The New York Times, adding that they fear that the perpetrators could try to replicate such an attack in other countries because the compromised systems are used in thousands of industrial plants worldwide.

Investigators—who include a team from the maker of the compromised systems, as well as the FBI, the National Security Agency, the Department of Homeland Security, and teams of cybersecurity experts—have declined to name either the company whose petrochemical plant was a target of the August attack in Saudi Arabia or the country in which that company is based. They have not identified the culprits either, the NYT reports.

Investigators and cybersecurity experts believe a nation-state was most likely responsible for the attack on the plant in Saudi Arabia in August, because the hackers had resources and plenty of time and the computer code had not been anything like in previous cyberattacks, the NYT’s sources say.

Back in August, the only thing that prevented the attack from being successful and causing physical damage was a bug in the hackers’ computer code that had inadvertently shut down the plant’s systems. According to investigators and experts who spoke to the NYT, the attackers have probably fixed their flawed code by now and could try again a similar attack against another industrial plant.

The compromised system was Schneider Electric’s Triconex controllers, which perform tasks such as regulating voltage, temperatures, and pressure, maintaining safe operations of the system.

According to Schneider Electric’s website, more than 18,000 Triconex safety systems have been delivered to over 80 countries. These controllers are used in oil refineries, water treatment facilities, nuclear plants, and chemical plants, among others.

“If attackers developed a technique against Schneider equipment in Saudi Arabia, they could very well deploy the same technique here in the United States,” James A. Lewis, a cybersecurity expert at the Washington-based think-tank Center for Strategic and International Studies, told the NYT.

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Abu Dhabi: Oil prices are expected to trade lower in the coming days due to seasonal weakness in demand and rise in shale oil production in the US, analysts said.

Brent is currently trading at $66.21 (Dh242.99) per barrel and the US benchmark West Texas Intermediate at $62.34 per barrel.

“For oil prices, near term risks are skewed to downside. We are in the midst of a period of seasonal demand weakness which coupled with the undeleting rise in US shale, makes for a bearish cocktail,” Stephen Brennock, a London-based analyst from brokerage firm PVM Oil Associates told Gulf News.

Shale oil production from the US has been going up in the last few months as oil prices rise due to production cut agreement between Opec and non-Opec member countries and geopolitical tensions in the Middle East and elsewhere.

EIA (Energy Information Administration) expects US oil production averaging 10.7 million barrels per day in 2018, an increase of 1.4 million barrels per day from 2017. Oil rig number is also steadily increasing as oil prices move up.

Rig count in the US has gone up by 6 rigs to 990 last week, according to a report by services firm Baker Hughes.

“Opec versus US Shale’ story will dictate oil prices in the coming quarter,” said Benjamin Lu, an analyst with Singapore based Phillip Futures.

Range bound levels

“As oil props up gradually with Opec’s controlled production policy, US shale producers will respond with increased output to capitalise on higher margins. Hence, range bound levels are to be expected in crude oil prices for the coming weeks.”

He forecast Brent to trade between $65 to $70 per barrel and US crude West Texas Intermediate between $60 to $65 per barrel in the coming weeks.

Brennock also said new tariffs announced by the US president Donald Trump does not bode well for the oil market.

“Economic optimism and oil consumption go hand-in-hand therefore any adverse impact on the health of the global economy will dampen oil demand growth prospects.”

The appointment of a new US Secretary of State is also not expected to lend much support to oil prices.

“A flare up in geopolitical tensions may well be on the cards but the Iranian nuclear deal is unlikely to be scrapped given strong levels of international support for the deal,” said Brennock on Mike Pompeo who replaced Rex Tillerson as the new US Secretary of State last week.

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