Mumbai : The world’s biggest banks are reckoning on a rebound in oil prices next year as fears of a recession prove misplaced.
The Brent benchmark will average $70 a barrel in 2019, almost a third higher than its price , according to a Bloomberg survey of oil analysts. Futures in London and New York plunged this quarter, with volatility soaring in its final week as crude tracked gyrations in equity markets.
Despite plans by OPEC and its allies to limit production next year to prevent a glut from forming, oil’s fortunes have increasingly been driven by moves in financial assets and concerns about the global economy. However, analysts expect markets are about to tighten as growth stays strong, OPEC’s supply cuts kick in, and unintended losses in Venezuela and Iran escalate.
“We could even see something similar to a V-shaped recovery next year, on two very important conditions,” said Michael Cohen, head of energy and commodities research at Barclays Plc in New York. “One, that the reduction in OPEC exports leads to a reduction in inventories. And two, that we don’t see a further deterioration in macroeconomic conditions.”
The recent weakness in financial assets has been led by a darkening outlook for the global economy amid prolonged trade dispute between the U.S. and China, and as the U.S. Federal Reserve embarks on tightening monetary policy.
While the ensuing retreat in oil prices has brought relief to consumers, it’s battered the shares of companies like Exxon Mobil Corp. and BP Plc, as well as the economies of producers like Saudi Arabia.
So far, though, most commentators aren’t seeing an actual recession biting the oil market next year. The median forecast of 24 oil analysts in a Bloomberg survey projects that London-traded Brent will average exactly $70 a barrel in 2019. The price on Thursday was about $53.50 while the average so far in 2018 has been about $72.
The median forecast for WTI is $61.13. The grade traded at about $45.50 .
“Fundamentally speaking, we believe that prices are nearing a bottom,” said Michael Tran, commodities strategist at RBC Capital Markets LLC. “Global supply and demand should reach a fine balance next year.”
In the absence of a severe economic slump, most analysts anticipate that world oil consumption will continue to expand at roughly the pace seen in recent years, powered by emerging economies such as China.
And although doubts remain that OPEC will cut output deep enough to prevent a surplus, the survey shows analysts are confident that the group’s strategy will ultimately succeed. OPEC will begin implementing the curbs next month, and leading member Saudi Arabia has pledged to slash output by even more than it formally agreed to.
MPC to meet six times during 2019-20: RBI
Mumbai: The Monetary Policy Committee (MPC), which decides on key interest rates, will meet six times during the next financial year, the Reserve Bank of India (RBI) said.
The first meeting of the six-member MPC to decide on the first bi-monthly monetary policy statement for 2019-20 will be held from April 2 to 4.
The policy will be announced on April 4. Headed by RBI Governor Shaktikanta Das, the committee also includes two representatives from the central bank and three external members.
The external members are Indian Statistical Institute professor Chetan Ghate, Delhi School of Economics Director Pami Dua and Indian Institute of Management-Ahmedabad professor Ravindra H Dholakia.
According to the schedule provided by the RBI, the second meeting of the MPC in the next fiscal will be held on June 3, 4 and 6; third meeting (August 5-7); fourth meeting (October 1, 3 and 4); fifth meeting (December 3-5) and sixth meeting (February 4-6, 2020).
SBI raises Rs 1,251 crore by issuing Basel III-compliant bonds
New Delhi: The country’s largest lender State Bank of India (SBI) said it has raised Rs 1,251.30 crore by issuing Basel III-compliant bonds.
“The Committee of Directors for Capital Raising at its meeting held today on 22 March 2019 deliberated and accorded approval to allot 12,513 non-convertible, taxable, perpetual, subordinated, unsecured Basel lll-compliant additional tier-I bonds, for inclusion in additional tier-I capital of the bank…aggregating to Rs 1,251.30 crore,” SBI said in a regulatory filing.
The bonds with a face value of Rs 10 lakh each bears a coupon rate of 9.45 per cent per anum payable annually with call option after 5 years or any anniversary date thereafter, it said. The bonds were subscribed on Friday, it added.
State Bank of India (SBI) also said the central board of the bank at its meeting held has accorded its approval for extension of validity period for raising equity capital of up to Rs 20,000 crore from market by way of follow-on public offer, qualified institutional placement, preferential allotment, rights issue or any other mode or a combination of these till March 31, 2020.
Sebi fines 4 entities Rs 27 lakh for fraudulent trading in BSE stock options
New Delhi: Markets regulator Sebi imposed a total penalty of Rs 27 lakh on four entities for indulging in fraudulent trade in illiquid stock options segment of BSE.
Umapati Oil Mill and Ginning Factory, Yudhbir Chhibbar, Kasturbhai Mayabhai Pvt Ltd and Vimladevi Shyamsunder Khetan are the four entities, according to Sebi’s separate orders.
fter observing a large-scale reversal of trades in the BSE’s illiquid stock options segment, Sebi conducted a probe from April 2014 to September 2015.
Following the probe, the regulator found that the trades executed by the entities were not genuine as they were reversed within few seconds with same counter parties with significant difference in price, resulting in profit to the entities.
Securities and Exchange Board of India (Sebi) said it was a deliberate attempt to deal in such a fashion and not a mere coincidence.
The trades executed by the entities were not genuine and created an appearance of artificial trading volumes, thereby violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, Sebi noted.
Accordingly, a fine of Rs 8.7 lakh and Rs 8.4 lakh were imposed on Yudhbir Chhibbar and Vimladevi, respectively while a penalty of Rs 5 lakh each was levied on Umapati Oil Mill and Kasturbhai Mayabhai Pvt Ltd, totalling Rs 27.1 lakh.
In a separate order, Sebi imposed a total fine of Rs 6 lakh on four promoters of Artech Power Products for delayed disclosures to exchanges regarding their change in the shareholding in the company.
Ranjith Vijayan, I V Vijayan, Repsy Vijayan and Resmi Vijayan are the four promoters, according to Sebi’s order.
The promoters have deprived the vital information to the public by non-disclosure /delayed disclosure as mandated by the Takeover Regulations, Sebi noted.
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