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Oil suffers rout after Saudi Arabia fires first shot of price war

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Losing more than a quarter of their value, oil prices were set today for their biggest daily rout since the first Gulf War, after Saudi Arabia cut its official prices in a market already reeling from the impact of the coronavirus on global demand.

Saudi Arabia slashed its official selling prices and made plans to ramp up crude output next month after Russia balked at making a further steep output cut proposed by the Organization of Petroleum Exporting Countries to stabilize oil markets.

Brent LCOc1 crude futures were down $11.38, or 25%, at $33.89 a barrel by 07:32 GMT, after earlier dropping to $31.02, their lowest since February 12, 2016. Brent futures were on track for their biggest daily decline since Jan. 17, 1991, when prices dropped at the start of the first Gulf War.

U.S. West Texas Intermediate (WTI) crude CLc1 fell by $11.12, or 27%, to $30.16 a barrel, after touching $27.34, also the lowest since February 12, 2016. The U.S. benchmark was potentially heading for its biggest decline on record, surpassing a 33% fall in January 1991.

Saudi Arabia plans to boost its crude output above 10 million barrels per day (bpd) in April after the current deal to curb production expires at the end of March, two sources told Reuters on Sunday.

The world’s biggest oil exporter is attempting to punish Russia, the world’s second-largest producer, for not supporting the production cuts proposed last week by OPEC.

Saudi Arabia, Russia and other major producers last battled for market share like this between 2014 and 2016 to try to squeeze out production from the United States, which has grown to become the world’s biggest oil producer as flows from shale oil fields doubled over the last decade.

Latest on the spread of coronavirus around the world

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The number of people infected with coronavirus topped 110,000 across the world as the outbreak reached more countries and caused more economic damage.

DEATHS/INFECTIONS

More than 110,000 people have been infected by the coronavirus across the world and over 3,800 have died, according to a Reuters tally of government announcements.

Mainland China, where the outbreak began, had 40 new cases as of Sunday, down from 44 cases a day earlier. Total confirmed cases rose to 80,735, while the death toll touched 3,119.

EUROPE

Total cases in the United Kingdom rose by 30% to 273 and a third person who tested positive for the virus has died.

Italy ordered a virtual lockdown across a swathe of its wealthy north on Sunday, including the financial capital Milan, in a drastic new attempt to try to contain a rapidly growing outbreak of coronavirus.

The number of deaths in Italy jumped to 366 from 233 on Saturday, officials said on Sunday. Total cases reached 7,375, up from 5,883.

Nineteen people in France have died, authorities said on Sunday. The number of confirmed cases has increased by around 500 over the weekend.

Germany had 902 confirmed cases by Sunday afternoon. There were just 66 cases on February 29. Health Minister Jens Spahn called on organizers of large public events to cancel them and urged people to stay at home.

The number of cases in Britain has risen to 273, the Department of Health said on Twitter on Sunday, up from 209 a day earlier, and the biggest one-day increase so far.

Albania reported its first case on Monday.

Bulgaria on Sunday reported its first four confirmed cases of the coronavirus.

Moldova has reported its first confirmed coronavirus case, the Health Ministry said late on Saturday.

Malta reported its first case on Saturday – a 12-year-old Italian girl who lives on the island.

AMERICAS

Oregon Governor Kate Brown declared a 60-day state of emergency on Sunday as cases in the state doubled to 14.

U.S. passengers on the cruise ship Grand Princess, which had been barred from docking in California because of suspected cases of coronavirus on board, will be sent for testing to at least four quarantine centers, Georgia Governor Brian Kemp said on Sunday.

Costa Rica raised to nine the tally of people infected with the virus in its territory, up from five a day earlier.

A patient diagnosed with coronavirus died in Argentina on Saturday, the Health Ministry said, marking the first death related to the virus in Latin America.

Paraguay has registered its first case, the Health Ministry said on Twitter on Saturday.

ASIA

South Korea reported 69 new cases, bringing the country’s total infections to 7,382.

Bangladesh on Sunday confirmed its first three cases, two of them in people recently returned from Italy.

The Maldives has curbed movement on several resort islands, authorities said on Sunday, after the country reported its first two cases of coronavirus.

The Japanese city of Kobe said a woman in her 40s has tested positive.

Philippines President Rodrigo Duterte will declare a public health emergency after the country recorded its first case of community transmission, officials said on Saturday.

MIDDLE EAST AND AFRICA

Iran said 194 people had died from coronavirus and 6,566 were now infected, in a TV announcement by the Health Ministry on Sunday.

A 60-year-old German tourist has died in Egypt, becoming its first fatality from the new coronavirus, the Health Ministry in Cairo announced on Sunday.

Saudi Arabia reported four new cases on Monday, bringing the total of registered cases to 15. On Sunday, it imposed a temporary lockdown on its eastern Qatif province, home to a large Shi’ite Muslim population.

Cameroon and Togo confirmed their first cases of coronavirus on Friday, bringing the number of countries in sub-Saharan Africa reporting infections to five.

AUSTRALIA

A man in his 80s died in a Sydney hospital, becoming the third casualty in Australia, state health authorities said on Sunday. Federal Minister for Health Greg Hunt said the government has secured an additional 54 million face masks to help protect medical workers.

Al-Zarmouh: increasing the fee on selling foreign currency is unjustified

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In a statement to Tabadul, the economist Omar Al-Zarmouh, considered that the decision of raising the fee on selling foreign currency is wrong and unjustified, adding that it is too early to adopt this step.

AL-Zarmouh clarified that this measure will lead to the rise of foreign exchange rates, as economy depends mainly on imports, indicating that merchants will pay a higher price when importing different goods, which leads to the increase of services’ prices in the country.

He also accused the state of intentionally raising prices, unlike other countries in the world, and in contrast with the rational policies that seek to pressure prices as to reduce them.

The expert clarified that it is too early to take this step because Libya still has reserves to use, adding that 163% – what the exchange rate officially costs- is a terrible ratio.

Al-Zarmouh suggested that the best solution is to seek for revenues from the state’s projects.

Libya: approving a state salary scale that simulates social justice is needed

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In a statement to Tabadul, the dean of economics faculty at Al-Mergib University, Mahmoud Al-Mahjoub, confirmed that reducing the salaries of the Presidential Council, ministers and agents by 40% is a good initiative counted for the Council, though belated.

Al-Mahjoub said that, as the country needs all its financial resources in this period, there are some unnecessary expenses that concern the second and third parts.

On the other hand, he emphasized the necessity of urgently issuing and approving a state salary scale that simulates social justice.

In this regard Al-Mahjoub recalled the initiative they had taken at the university since about a year, during which they prepared a salary scale and discussed it in the presence of the Minister of Education, the Minister of Labor as well as the Minister of Finance, but to no avail.

As far as the issue of employment in the public sector is concerned, and With regard to the recent statement of the Finance Minister Faraj Boumtari in which he claimed that the number of employees is four times higher than what the state needs, Al-Mahjoub said that despite the presence of capital and businessmen, there are issues of employment in the private sector.

As a consequence, Al-Mahjoub stressed that the House of Representatives or the Government should enact and issue a set of legislation and laws by which the private sector is obliged to implement, ” in order to dispel citizens’ fears of employment in this sector,” according to him.

Al-Mahjoub attributed the poor orientation and sufficiency of the private sector in the form of a second job to the fear of social security laws and contracts.

Commenting on dispelling citizens’ fears, he said “if he private sector will guarantee their rights in line with the public sector, then pressure on the State will inevitably be relieved.”

In order to attract employees from the public sector, he highlighted the necessity of guaranteeing some facilities and advantages for the private sector, such as reducing taxes and rates of customs registration.

Libya discusses its economic relations with the United Kingdom

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In the framework of discussing the development of economic relations between Libya and the United Kingdom,
The Minister of Economy and Industry Mr. Ali Al-Issawi, met Mr. Conor Burns, the Minister of State for International Trade.

The meeting was held at the British Foreign Office headquarters, on Thursday morning, and it was also attended by Libya’s acting chargé d’affaires along with the minister’s entourage.

During the meeting, the two countries discussed ways of strengthening relations, especially cooperation in establishing and managing free-trade zones and exclusive economic zones.

Moreover, the bilateral agreements signed between the two countries were reviewed. In addition, signing a free trade agreement, and boosting investments between both countries were highlighted.

The Ministry considered this visit as highly important because it came after the United Kingdom left the EU system, the thing that requires the immediate resumption of direct economic relations with the United Kingdom.

Turkish investors are expected to harness Libya’s $120B investment volume

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Quoting Anadolu Agency, on Thursday, the chairman of the Turkey-Libya Council of the Foreign Economic Relations Board of Turkey (DEIK) said that Turkish investors should harness Libya’s $120 billion investment volume, especially in the contracting sector.

“There is a call from Libya in this direction,” said Murtaza Karanfil, adding that Libya was undergoing a reconstruction process and that there were major opportunities in all of the country’s sectors.

“During the reconstruction process, houses, public buildings and roads will be rebuilt in Libya,” said Karanfil.

Turkey exports a wide variety of products to Libya including jewelry, furniture, poultry, carpets, semi-finished steel, hygienic towel, diaper, vegetable fixed oil, plastic profile, plastic packaging materials, medicine and clothing.

Due to difficulties in the country — where Turkish contractors had undertaken their first overseas projects — projects worth $19 billion remain unfinished, Karanfil said.

He explained that Turkish contractors currently had a total of $4 billion in receivables due to losses including collateral, machinery and equipment.

“With an agreement to be signed between the two countries, we expect serious progress in the resolution of commercial problems in the coming period in contracting,” he noted.

“We believe that as soon as we resolve the old issues on receivables, we will take things from where we left off in Libya and move them to much better points,” Karanfil said.

Referring to the impact of the coronavirus outbreak on the Chinese economy, he said China’s share in Libya’s imports is around 13%.

“We [Turkey] can well turn China’s share in Libya and African countries to our favor using the advantages of our geopolitical location and by correct process management,” he said.

He also said that Turkey’s exports to Libya exceeded $2 billion in 2012 and peaked before declining due to political upheaval in the country.

“Exports increased again in 2017 and reached $1.9 billion in 2019, with an increase of 29% compared to the previous year,” Karanfil added.

Oil takes biggest daily dive in over a decade as Russia, OPEC split

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Brent slid to its biggest daily loss in more than 11 years on Friday after Russia balked at OPEC’s proposed steep production cuts to stabilize prices hit by economic fallout from the coronavirus, and OPEC responded by removing limits on its own production.

More than 1 million U.S. crude contracts changed hands during the session, as the three-year pact between OPEC and Russia ended in acrimony.

“Prices plunged because the OPEC confab ended up being an epic fail on the part of all involved. Russia has clearly decided to employ a scorched earth approach to the oil market: every country for itself,” said John Kilduff, partner at Again Capital LLC in New York.

Brent futures had their its biggest daily percentage fall since December 2008, down $4.72, or 9.4%, to settle at $45.27 a barrel. It was Brent’s lowest closing price since June 2017.

U.S. West Texas Intermediate crude dropped $4.62, or 10.1%, to $41.28, its lowest close since August 2016 and the largest daily percentage loss since November 2014.

More than 4.58 million U.S. front-month crude contracts changed hands this week, the busiest week ever for that contract.

Libya: 40,000 displaced persons

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In a statement to Tabadul, Janzur Councilman Abed Al-Salam Gharsa claimed that the number of displaced families in Janzur between 2011 and 2019 was 8,000 families. In other words, approximately 40,000 inhabitants were added to the city’s population.

He explained that 4964 families were included after May, 4 2019, while 3000 others were added between 2011 and 2019.

“The situation is almost as large as bringing in a whole city population and adding it to the inhabitants of the district, since the population density of municipalities does not exceed 35,000 people,” he said, pointing out that, as a consequence, the situation led to a failure in providing services even to the municipality’s inhabitants.

Gharsa stressed that the Presidential Council has disbursed a budget of 4,900 thousand LYD to the municipality for the displaced families, of which 3 million were spent directly, and 2 million indirectly, through the allocation of 2000 receipts worth 7,500 dinars to 2000 families, as well as the distribution of food parcels.