Thursday, December 3, 2015

Saudi lowers oil price, may not cut output; UK foreign investment at 10-year low; World needs jobs not giveaways, says Carlos Slim

1 Saudi lowers oil price, may not cut output (Khaleej Times) Saudi Arabia cut pricing for January oil sales to the US before the Organisation of Petroleum Exporting Countries meets to decide on production targets.

Saudi Arabian Oil Co lowered its official selling price for all crude grades to the US. In Asia, the discount for its Arab Light against a regional benchmark will be $1.40 a barrel, compared with $1.30 in December. It was expected to be widened by 25 cents, according to the median estimate in a Bloomberg survey.

"They are offering their crude oil at a lower price to the two most important markets, the US and Asia, two days before the Opec meeting," a clear sign the Saudis aren't going to pull back output, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc in New York.

Brent crude, a global benchmark, has slumped about 40 per cent in the past year as Saudi Arabia, Russia and the US boosted output. Opec decided in November last year and again in June to keep its production target unchanged, after exceeding its target of 30 million barrels a day in each month since June 2014.

Saudi Arabia boosted output to a record 10.48 million barrels a day in June, according to the International Energy Agency, and pumped 10.33 million barrels daily last month. Middle Eastern producers are competing increasingly with cargoes from Latin America, North Africa and Russia for buyers in Asia.


2 UK foreign investment at 10-year low (BBC) UK firms cut their foreign investment by the largest amount in a decade last year, official figures have shown. British firms clawed back a net £79.9bn worth of overseas investments in 2014. That compared with a £28.4bn increase in overseas investments by UK firms a year earlier. Foreign firms also scaled back their investments in the UK.

It is the first time UK companies have reduced net foreign direct investment in more than a decade, the Office for National Statistics (ONS) said. Overall, the amount of money invested overseas by UK companies fell to £1.15trn in 2014 from £1.25trn in 2013. Foreign companies cut their direct investment into the UK to £27.8bn in 2014 from £33bn in 2013.

The figures come after state visits to the UK by the leaders of two of the fastest-growing economies in the world - Chinese President Hu Jintao and Indian Prime Minister Narendra Modi - during which a number of trade deals were announced.

The Institute of Directors (IoD) warned that the figures showed the UK could no longer rely on its investments abroad to compensate for "weak export performance", given the falling global demand.

Commodity prices have fallen sharply in the last year amid fears that the Chinese economy, the world's second-largest, is slowing down too rapidly. This slowdown has reduced demand for metals and oil and contributed to deflation in the UK and the eurozone. Allie Renison, head of trade policy at the IoD, said some UK manufacturing firms were already selling off assets and facilities abroad and bringing production back to the UK.


3 World needs jobs not giveaways, says Carlos Slim (The Guardian) The Mexican billionaire Carlos Slim has said he will not give away his family’s shares to charity like Facebook founder Mark Zuckerberg. Zuckerberg has announced he will donate 99% of his Facebook shares, currently worth about $45bn, to a new philanthropic project he will run with his wife.

When asked if he planned to give away his family’s shares in his companies to his foundations, Slim said no, while adding that his charitable projects did not have budget limits. Slim, whose companies include the telco America Movil, has given his foundations multi-billion dollar endowments but he did not name a figure for how much money he has donated.

“We see projects and results, we are not counting chillies,” he said. “Foundations do not solve poverty,” he said, saying that employment was the key to eradicating poverty. “Employment requires that companies invest, so we don’t need to give away companies, we need to create companies.”

Slim, speaking at an event in Mexico City, said Zuckerberg’s plan was “very good” but governments already had the resources to address poverty and education issues. “It’s a problem of management and efficiency,” he said.


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