Opec members’ agreement key to balanced market, says UAE

The UAE Minister of Energy and Industry Suhail Bin Mohammed Al Mazrouei has said that a new agreement between Opec members is essential to support a balanced and less volatile market.

Al Mazrouei said, via a series of tweets, “Opec and Opec+ played an important role in delivering market stability. The UAE Ministry of Energy and Industry firmly believes that a new agreement is essential to support a balanced and less volatile market.”

The UAE Minister’s remarks follow recent developments between Opec and non-Opec allies failing to agree on how much oil production to cut amid the coronavirus outbreak.

He went on to note that operators in the country have “ample production capacity that will be quickly brought online given the current circumstances.”

According to the Al Mazrouei’s official twitter account, the minister expressed his disappointment in the lack of agreement between Opec+. “We are disappointed that no agreement was reached by Opec + and the current declaration of cooperation will therefore expire at the end of March 2020,” the tweet read.

UAE Minister of State and Adnoc Group CEO, Dr Sultan Ahmed Al Jaber has commented on recent market developments, noting that the UAE oil company is set to supply the market with over four million barrels of oil per day in April 2020.

In a statement, Dr. Al Jaber said, “Today, as a result of the steps we’ve taken over the last four years, ADNOC is far stronger and better positioned to respond to current market conditions. Our focus on driving performance, profitability and efficiency has made us more resilient, agile and responsive to market dynamics. These guiding principles remain unchanged as we move forward with projects across our value chain.”

“In line with our production capacity growth strategy announced by the Supreme Petroleum Council, we are in a position to supply the market with over four million barrels of oil per day (mmbpd) in April. In addition, we will accelerate our planned five mmbpd capacity target,” he affirmed.

Stocks sank again on Wednesday, wiping out half of a huge rally from a day earlier as Wall Street continues to reel on worries about the coronavirus.

Another big central bank made an emergency cut to interest rates in hopes of blunting the economic pain caused by COVID-19, which economists call the global economy’s biggest threat. But investors are still waiting for details promised by President Donald Trump on potential aid for the economy through tax breaks and other relief.

Stocks fell from the opening of trading in New York, including a 2.8% drop for the S&P 500. Perhaps the best gauge of confidence in the economy on Wall Street recently, Treasury yields, also pulled back. Asian markets also fell, while European markets were steadier following the rate cut by the Bank of England.

The Dow Jones Industrial Average fell 784 points, or 3.1%, to 24,233, and the Nasdaq was down 2.2%, as of 10:05 a.m. Eastern time.

The yield on the 10-year Treasury fell to 0.70% from 0.75% late Tuesday.

The speed of the market’s declines and the degree of its swings the last few weeks have been breathtaking. It was only three weeks ago that the S&P 500 set a record high, and the Dow Jones Industrial Average has had six days where it swung by 1,000 points since then. It’s done that only three other times in history.

For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia.

The vast majority of people recover from the new virus, but the fear is that COVID-19 could drag the global economy into a recession by hitting it from two ends.

On the supply side, the worst-case scenario has companies with less things to sell as factories shut down and arenas dim the lights because workers are out on quarantine. On the demand side, companies see fewer customers because people are huddling at home instead of taking trips or going to restaurants.

That’s why many analysts say markets will continue to swing sharply until the number of new infections stops accelerating. In the United States, the number of cases has topped 1,000.

While investors wait for health experts to corral the virus, they’re hoping big, coordinated moves by central banks and governments around the world can prop up the economy in the interim.

The Bank of England’s emergency rate cut follows an earlier one by the Federal Reserve, and economists expect the European Central Bank to be the next to act. It has a meeting Thursday on monetary policy.

Italy’s government announced $28 billion in financial support for health care, the labor market and families and businesses that face a cash crunch due to the country’s nationwide lock down on travel.

Australia announced a $1.6 billion virus-fighting package and reportedly plans an additional $6.5 billion in economic stimulus. Japan and Thailand also have announced fresh help for businesses and workers.

WAM / Agencies