Business

NEW YORK — Oil prices rose about 2 per cent on Friday, with US crude hitting its highest in more than three years, as global supplies remained tight and the market awaited news from Washington on possible new US sanctions against Iran.

Bob Yawger, director at Mizuho, noted the looming May 12 deadline that US President Donald Trump had set for Europeans to "fix" the deal with Iran over its nuclear programme or he would refuse to extend US sanctions relief for Iran.

"You have the May 12 Iran and Trump headlines that support the market," he said.

US light crude settled up $1.29 at $69.72 a barrel. It touched a session peak of $69.97 for the first time since November 2014. It was on track to gain just over 2.3 per cent on the week.

Brent crude oil settled up $1.25 at $74.87 a barrel. The global benchmark was set to end the week up 0.3 per cent.

Iran's foreign minister said on Thursday that US demands to change its 2015 agreement with world powers were unacceptable. Trump has said European allies must rectify "terrible flaws" in the international accord by May 12.

European powers want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting EU-Iranian business ties if Trump makes good on his threat to withdraw.

Iran resumed its role as a major oil exporter in January 2016 when international sanctions were lifted in return for curbs on Tehran's nuclear programme.

ANZ analysts Daniel Hynes and Soni Kumari said Brent could reach $80 a barrel by the end of this year, attributing recent strength to rising geopolitical risks and tighter global supply.

"We expect the market to tighten even further in second half 2018," they wrote in a note to clients.

Still, growing US crude supplies have been capping price gains.

Surging production in the Permian shale basin is outpacing pipeline capacity, while local refining issues have exacerbated oversupply.

The United States now produces more crude oil than top exporter Saudi Arabia, and two weeks of US inventory builds have limited the oil market's upside. US energy companies added oil rigs for a fifth straight week, with higher crude prices boosting profits and pushing nationwide production to record highs.

Drillers added nine oil rigs in the week to May 4, bringing the total to 834, the highest since March 2015, General Electric Co.'s Baker Hughes energy services firm said. 

Hedge funds and other money managers cut their net long US crude futures and options positions in the week to May 1, the US Commodity Futures Trading Commission said on Friday.

NEW YORK — World stock indexes fell on Thursday, a day after the US Federal Reserve (Fed) reaffirmed the outlook for more rate hikes, while bond yields slid after a surprising drop in eurozone inflation data.

The Dow and benchmark S&P 500 stock indexes fell below key technical levels, with their 200-day moving averages, for the first time since early April, adding to bearish sentiment.

MSCI's gauge of equity markets across the globe shed 0.96 per cent.

A two-day Fed policy meeting ended with no change in rates on Wednesday, as expected, while the central bank said inflation had "moved close" to its target, leaving it on track to raise borrowing costs in June.

Adding to caution, a US delegation led by Treasury Secretary Steven Mnuchin arrived in Beijing on Thursday for talks on tariffs, as Chinese media said the country would stand up to US bullying.

"We weakened [after] the FOMC meeting and it's a little bit of the same carrying over to today," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. "Augmenting it is some worries about trade negotiations with China that are under way and what may come of that."

The Dow Jones Industrial Average fell 336.06 points, or 1.4 per cent, to 23,588.92, the S&P 500 lost 35.19 points, or 1.34 per cent, to 2,600.48 and the Nasdaq Composite dropped 94.37 points, or 1.33 per cent, to 7,006.53.

Some earnings disappointments also weighed on the markets. 

AIG shares dropped after the insurer reported a lower-than-expected quarterly profit, while Cardinal Health declined after the drug distributor cut its annual earnings forecast.

In Europe, data showed that eurozone inflation fell to 1.2 per cent in April, according to the Eurostat flash estimate. Economists polled by Reuters had expected it to be unchanged from 1.3 per cent in March.

That pushed French and German 10-year government bond yields to two-week lows after the data.

The pan-European FTSEurofirst 300 index lost 0.73 per cent.

Benchmark US Ten-year notes last rose 10/32 in price to yield 2.929 per cent, from 2.964 per cent late Wednesday.

The Fed statement was not quite as hawkish as some had expected, though sentiment remained bullish given US rates were still clearly heading higher.

"The [Fed] statement carried only modest changes in wording, but they were meaningful nonetheless, highlighting that the Fed is optimistic on the outlook and intent on continuing to raise rates at a gradual pace," said Westpac analyst Elliot Clarke.

The US dollar erased all its 2018 losses in the past two weeks on expectations the Fed will continue to raise rates, even as other world central banks, including the European Central Bank, take longer to reduce stimulus.

The US dollar was near flat in choppy trading, as investors awaited Friday's US payrolls data for April.

The dollar index rose 0.1 per cent, with the euro up 0.05 per cent to $1.1956.

US crude fell 0.26 per cent to $67.75 per barrel and Brent was last at $73.17, down 0.26 per cent on the day. 

AMMAN — Royal Jordanian (RJ) CEO Stefan Pichler on Wednesday announced "successful" first quarter results, achieved by the national carrier.

"This outstanding performance is the result of an increase in overall revenues, which reached JD143 million," Pichler said, citing a 73 per cent growth in online ticket sales, 46 per cent in cargo warehouse revenues, 18 per cent in cargo sales and 13 per cent in passenger sales.

His remarks came at a press conference held by RJ, where Pichler outlined the financial and operational figures the airline attained over the past year and first quarter of 2018. 

The CEO attributed the successful start of the year to the company's turnaround plan towards profitability launched in the second half of 2017, which resulted in a JD468,000 net profit before tax for the airline. 

Running through 2022, the five-year plan comprises several initiatives aimed at bringing up revenues by 7 per cent while decreasing unit costs by 6 per cent, in addition to the implementation of electronic services to facilitate travel procedures for customers. 

Regarding this year's challenges, Pichler said that "foremost will be the entry of low cost airlines to Jordan", noting that "the management is working hard to face the challenges and turn them into opportunities". 

Asked about the route network and fleet, the CEO explained that "the turnaround plan includes the opening of three international destinations in Washington [US], Stockholm [Sweden] and Copenhagen [Denmark] in June, while eight RJ destinations are still suspended due to security concerns". 

“In addition, the five-year plan entails the modernisation of the medium and short-haul airliners with the possible introduction of four new aircraft,” Pichler announced, noting that “RJ will study the options before taking decisions concerning the choice of aircraft in order to maintain its efficiency while reducing operating costs”.

AMMAN — The general assembly of the Housing Bank for Trade and Finance has approved a recommendation of the bank’s board to pay 20 per cent of its share value in dividends, according to a bank statement. 

During its meeting which convened on Monday, the bank’s general assembly approved the report issued by the board of directors and the financial results for the year ended 2017, as well as the plans for the year 2018. 

The meeting was presided over by Abdel Elah Al Khatib, the chairman of The Housing Bank for Trade and Finance, who delivered a speech highlighting the bank’s financial indicators for 2017. 

He said the bank’s pre-tax profit for 2017 totalled JD180 million compared to 190.3 million in 2016, while its net profit totalled JD125.2 million compared to JD 131 million in 2016. 

Al Khatib added that The Housing Bank Group registered a growth in total assets, which reached JD8.141 billion at a growth rate of 4.1 per cent year-on-year. 

Meanwhile, total client deposits reached JD5.8 billion with a 3.2 per cent growth year-on-year. 

Total direct credit facilities grew by 4.1 per cent to reach JD4.5 billion in 2017, while total equity was around JD1.1 billion at a 5.3 per cent growth year-on-year. 

ATHENS — After years of agony and deep reforms, the Greek economy is finally on the path to recovery, the Organisation for Economic Cooperation and Development (OECD) said on Monday.

Public finances have gained in credibility and investors are feeling confident again about Greece’s prospects, the OECD said as it presented a report on the country that is slowly emerging from years of austerity after narrowly avoiding crashing out of the eurozone.

But Athens still must tackle unemployment, poverty and inequality which all remain high, the OECD said.

“After significant reforms, Greece’s recovery from deep economic depression is finally gaining traction,” the Paris-based body said in a statement.

“Despite these positive developments, unemployment, poverty and inequality remain high, wages are low, investment remains depressed and productivity keeps falling,” it cautioned adding that “the public administration is still facing important efficiency challenges, and while tax collection has improved, avoidance is widespread”.

Greek unemployment, the highest in the eurozone, will progressively slide to 20.4 per cent in 2018 and 19.4 next year, the OECD predicted in the report.

OECD Secretary General Angel Gurria told reporters in Athens that the Greek economy was now on track to grow by 2 per cent this year and by 2.3 per cent in 2019.

Greece’s gross domestic product showed growth of 1.4 per cent last year after nine years of deep recession prompted by a debt crisis.

“This is the story of your success and of the Greek people,” Gurria said at a joint news conference with Prime Minister Alexis Tsipras.

Greece had undertaken the “most ambitious programme of reforms we have seen in recent years”, Gurria said, “a programme that is starting to break through, to happen”.

Greece’s debt now needed to be “relieved, restructured”, Gurria said. “The question of the debt has to be addressed by the institutions,” he said, in reference to ongoing debt talks with the European Union and the International Monetary Fund.

Eurozone finance ministers on Friday set a two-month countdown to agree Greece’s high-wire exit from eight years of bailout programmes with divisions deep over how much debt relief Athens actually needs.

Greece has been at the mercy of three bailout programmes since 2010 when its public finances collapsed, pushing the country into a deep economic depression and bringing crisis to the eurozone.

Athens has yet to rubberstamp its last reforms, including a round of controversial privatisations, with eurozone ministers demanding full delivery ahead of ministerial talks in Luxembourg on June 21.

DUBAI - State run Saudi Aramco, the world's top oil company, said on Sunday it has appointed five new members to its board including a female executive, a milestone for Saudi Arabia and the oil industry where there are few women executives.

The appointments come as the Saudi government plans to float around 5 percent of Aramco in an initial public offering (IPO) later this year or early 2019.

Saudi Arabian Minister of Finance Mohammed al-Jadaan and Minister of Economy and Planning Mohammed al-Tuwaijri were appointed as members of the board of directors, Aramco said in a statement.

They are joined by Lynn Laverty Elsenhans, the former chairwoman, president and CEO of U.S. oil refiner Sunoco Inc. from 2008 to 2012.

Elsenhans was named by Forbes as one of the world's most powerful women in 2008. Prior to her role at Sunoco, Elsenhans was the executive vice president of global manufacturing for Royal Dutch Shell, where she worked for more than 28 years.

She also served on Baker Hughes's board of directors from 2012 to July 2017 and sits on the board of GlaxoSmithKline.

The five new members of Aramco's board will join six returning members including Saudi Energy Minister Khalid al-Falih, who is also Aramco's chairman, and Amin Nasser, Aramco's chief executive.

Appointments to the 11-member board of directors are made by the Saudi cabinet.

The outgoing board members are Majid Al-Moneef, advisor to the Saudi Royal Court; Khaled al-Sultan, Rector of King Fahd University of Petroleum and Minerals; and Peter Woicke, former managing director of the World Bank and former vice president of the International Finance Corporation
 

LONDON — Britain's supermarket chain Sainsbury on Saturday said it was in talks to merge with rival Asda, in a deal that would create a retail giant with around 30 per cent share of the British market.

"Sainsbury's confirms that it and Walmart Inc. are in advanced discussions regarding a combination of the Sainsbury's and Asda businesses," Sainsbury said in a statement.

Britain's biggest retail chain is currently Tesco with a market share of 27.6 per cent, followed by Sainsbury and Asda with 15.8 per cent and 15.6 per cent respectively, according to data from Kantar Worldpanel.

The combined company would have 2,800 stores.

Sainsbury said a further statement on the proposed merger would be made at 06:00 GMT on Monday.

The Press Association reported the deal would be worth £10 billion (11.4 billion euros, $13.8 billion).

Richard Lim, from economics research consultancy Retail Economics, told the BBC that the merger would be a "game changer in the UK grocery market of epic proportions".

"The potential tie-up would see the combined business take Tesco head-on," he said.