Page 9 - MEOG Week 23
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MEOG
FInanCe & InVestment MEOG
sharply and entered a recession in the second half of 2018, the World Bank said in its report that “the downturn was triggered by corporate fragility stemming from rising levels of debt, often denominated in foreign currency, and exacerbated by policy uncertainty”.
It added: “This led to significant pres- sure on nancial markets and the value of the lira... The deceleration of activity was partly driven by significant financial outflows from Turkey amid market concerns about high cur- rent account de cits and policy developments, which led to sharp falls in investment and private
consumption.”
e report added: “ e baseline projection
for regional growth is predicated on the assump- tion that Turkey’s economy bottoms out in 2019 and that spillovers from slowing growth in the Euro Area are limited.
e baseline also assumes no further escala- tion in trade tensions between the United states and China or other major trading partners, no disorderly exit from the European Union by the United Kingdom, and an absence of policy mis- steps in economies that recently su ered acute nancial stress—mainly Turkey.”
PolICy
Members oppose OPEC meeting change amid tensions
oPeC
IrAN’s Oil Minister wrote to OPEC last week, opposing a suggestion by russia to push back the cartel’s next meeting by a week.
e group is scheduled to gather on June 25, with talks to be held on June 26 with the rus- sia-led non-OPEC group of countries. However, reuters reported last week that Moscow had been pushing for the dates to be changed to July 3-4 and has received backing from saudi Arabia.
e same reuters report said that the outlet had seen Iranian Oil Minister Bijan Zanganeh’s letter to OPEC, which said: “I disagree with the proposed changes of the dates. I have already tight commitment in that period and, moreover, no reason was provided on the urgency of giving consideration to this date change.”
e report also noted that Algeria, Kazakh- stan, libya and Venezuela also opposed the change of timing.
Meanwhile, s&P Global Platts’ monthly sur- vey showed that OPEC’s oil production dropped by 170,000 bpd from April to 30.09 million bpd in May.
is represents an output nadir since Febru- ary 2015, which saw the height of saudi’s e orts to price the growing shale oil developments out of production.
With Iran already struggling to sell its oil, Tehran continues to o er novel purchase meth- ods (see: NIOC o ers more crude on exchange, page 11), and it will ercely oppose e orts by OPEC to increase output.
Together, the OPEC and non-OPEC group, OPEC+, agreed last December to cut output by 1.2 million bpd from January 1, 2019 in an 80:40 split. sanctions on Iran have seen its production fall the most rapidly, despite being exempt from the OPEC+ reduction. In May it fell by around 400,000 bpd, but a reuters survey at the end of the month showed that saudi had increased oil ows by 200,000 bpd to 10.05 million bpd, though still below its OPEC quota of 10.311 bpd.
riyadh has come under sustained pressure from Us President Donald Trump to make up for the market’s shortfall in crude because of the loss of Iranian supplies.
Week 23 11•June•2019 w w w . N E W S B A S E . c o m P9
