1 Opec signals oil surplus next year (Freed Rahman
& Siddesh Suresh Mayenkar in Gulf News) The Organisation of the Petroleum
Exporting Countries is expected to continue producing surplus oil going into
next year even as production increased 14 per cent in July.
Output from 16-members of Opec, which contributed to
34.8 per cent of the total output last month, rose by 46,400 barrels per day to
33.106 million per day in July. Global supply, which includes supplies from
non-Opec members rose by 24,000 barrels per day on month to 95.14 million of
barrels per day in July.
The Opec supplies are expected to register a surplus
of 100,000 barrels per day in 2017, compared to a deficit that it saw last
month, Opec said. “The overall indications in the supply side by the end of
second quarter of 2016 are showing that the short-term outlook for non-Opec
supply in 2016 is being revised up due to the recovery in Canadian oil
production following the vast wildfire in Alberta and rising rig counts in the
US for four consecutive weeks, resulting in higher-than-expected output,” Opec said.
Members of Opec have been pumping in record oil to
control market share. Saudi Arabia, the world’s largest exporter of crude oil
produced 10.673 million barrels per day of oil in July, up from 10.55 million
barrels in June. The number is also the highest compared to previous months.
Other countries like the UAE are also producing at
record levels to control market share. Iran, Angola, Nigeria and Iraq have also
upped their production, the latest data from Opec monthly report shows.
2 Return on UK bonds turns negative (BBC) The return
on some UK government debt turned negative after the Bank of England missed its
target in a new bond buying operation. The Bank had offered to buy government
bonds, or gilts, as part of its new quantitative easing (QE) programme to
stimulate the economy.
But the bank fell £52m short of its £1.17bn target
when it failed to find enough sellers. That has driven up prices and pushed
down the return or yield, to investors. As bond prices rise, yields fall, and
vice versa.
Buying government bonds is often considered a safe
investment but they now offer a tiny, in some case negative, return. On
Wednesday morning gilts maturing in 2019 and 2020 were yielding -0.1%.
The Bank of England has been buying gilts at
auctions in the market since 2009 in its QE programme to push money out into
the banking system, to be lent onwards to businesses and individuals. It
announced a new £60bn round of government bond buying last week.
3 US avocado love and Mexican deforestation (San
Francisco Chronicle) Americans' love for avocados and rising prices for the
highly exportable fruit are fueling the deforestation of central Mexico's pine
forests as farmers rapidly expand their orchards to feed demand.
Avocado trees flourish at about the same altitude
and climate as the pine and fir forests in the mountains of Michoacan, the
state that produces most of Mexico's avocados. That has led farmers to wage a
cat-and-mouse campaign to avoid authorities, thinning out the forests, planting
young avocado trees under the forest canopy, and then gradually cutting back
the forest as the trees grow to give them more sunlight.
Given that Michoacan's forests contain much of the
wintering grounds of the monarch butterfly, the deforestation is more than just
an academic issue. Authorities have already detected small avocado plots in the
monarchs' reserve where farmers have cut down pine forest.
Greenpeace Mexico says people are likely to suffer,
too. "Beyond the displacement of forests and the effects on water
retention, the high use of agricultural chemicals and the large volumes of wood
needed to pack and ship avocados are other factors that could have negative
effects on the area's environment and the well-being of its inhabitants,"
Greenpeace said in a statement.
Avocado prices jumped from around 86 cents apiece in
January to around $1.10 in July, partly because of weak seasonal supply from
Mexico. And the peso lost 16 percent of its value against the dollar over the
past year, making exports cheaper for the US customers. Mexican farmers can
make much higher profits growing avocados than from most other crops.
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