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Black barrels of crude oil
Slowing demand and a supply glut to drain oil’s gains in 2019 – Poll
30 November 2018, 3:20 PM

Oil analysts are increasingly pessimistic about the prospect of a price rally next year, when the outlook for demand is uncertain and supply is growing at breakneck speed, even though the market expects OPEC to cut output, a Reuters poll showed.

A survey of 38 economists and analysts forecast Brent crude to average $74.50 a barrel in 2019, lower than the $76.88 outlook last month.

The poll predicted Brent would average $73.20 in 2018, mostly in line with the $73 average for the global benchmark so far this year.

“In the first half of next year we expect upward price pressure resulting from OPEC production cuts,” said Adri à Morron Salmeron, economist at Caixa Bank Research.

“Then, we expect downward price pressures from an uptick in US shale production in the second half, as bottlenecks will disappear, and a deceleration of global growth.”

Of the 32 contributors who participated in both the October and November polls, 16 cut their 2019 average price forecast for Brent.

The Organization of the Petroleum Exporting Countries as well as Russia and other producers meet in Vienna on December 6/7 in an attempt to support crude prices, which have fallen by over 30% from early October’s four-year high of $86.74.

The group could announce cuts of anywhere between 1 and 1.4 million barrels per day, analysts said.

“The oil market is definitely oversupplied at the moment.

Therefore, OPEC will decide to cut output in December,” said Frank Schallenberger, head of commodity research at LBBW.

“The recent drop in prices was so strong that I think the non-OPEC members will either agree to freeze production or join in the cut.”

A slowing global economy could erode oil demand growth next year, when supply from non-OPEC countries is forecast to expand at a record pace.

Citi had the lowest 2019 forecast for Brent at $57 a barrel,while ABN Amro and Raymond James had the highest, at $90.

FUNDAMENTAL GLOOM

The US decision to grant waivers to countries that buy crude from Iran, hit by sanctions on its energy exports, has changed the dynamics in a market already under pressure from soaring output from the world’s top three oil producers, the United States, Russia and Saudi Arabia, analysts said.

“Uncertainty over US sanctions against Iran had made the market fixated with supply.

The waivers changed the arithmetic, raising the possibility of a supply glut developing in 2019,”said Konstantinos Venetis, senior economist at TSL Research.

Non-OPEC output could rise by 1.5 to 2.2 million bpd in 2019, led by US shale, a few of the analysts said.

“Sharp increases in US production will be a key impediment in upside potential for oil prices in 2019,” said Benjamin Lu,commodities analyst at Phillip Futures.

The poll forecast US light crude to average $67.45 a barrel in 2019, down from $70.15 predicted in the previous poll.

The contract has averaged about $66.40 so far in 2018.

Adding to the possible glut was a recovery in output from Nigeria and Libya, excluded from previous cuts because of production declines caused by unrest.

On the other hand, oil demand was seen growing by between 0.9 and 1.5 million bpd in 2019, compared with 1.1 to 1.5 million bpd projected in the previous month’s poll.

“On the demand side, the main driver is the question how far worldwide economic growth will slow in 2019 and how far this will lead to lower dynamics of oil demand next year,” LBBW’s Schallenberger said.

Motor cars
Hamilton ends season with a win in Abu Dhabi
25 November 2018, 8:08 PM

Five times world champion Lewis Hamilton signed off in style on the Formula One season on Sunday with victory in Abu Dhabi, his 11th win of the campaign, and a points record.

Ferrari’s Sebastian Vettel finished second with Red Bull’s Max Verstappen third.

“I am so happy right now,” said Hamilton after Hollywood actor Will Smith brought down the chequered flag at the floodlit Yas Marina circuit on Hamilton’s 73rd career win.

The Briton, who has won 51 of the 100 races in the V6 turbo hybrid era, became the first driver to score more than 400 points in a season with a final tally of 408.

His victory also left him 18 wins away from Michael Schumacher’s all-time record.

Two times world champion Fernando Alonso, in his farewell race with McLaren, had hoped to sign off in the points but finished 11th.

With both championships already won, Hamilton taking his in Mexico with two races to spare and Mercedes sealing their fifth successive constructors’ and drivers’ double in Brazil, Sunday’s focus was on the race and those moving on — particularly Alonso.

Hamilton, Vettel and the Spaniard — three great champions — spun their cars in a cloud of smoke at the end of their slowing down lap, before stepping out for hugs and words of mutual respect.

Orlando Pirates' Xola Mlambo
Pirates deliver a cracker of a game against Chiefs
24 November 2018, 7:57 PM

Orlando Pirates supporters got an early Christmas present from their team.

Pirates beat arch-rivals Kaizer Chiefs 2-1 at the Moses Mabhida Stadium in Durban on Saturday afternoon to advance to the final of this season’s Telkom Knockout.

This was the Buccanners third win against Amakhosi this year.

Chiefs are still winless against Pirates since December 2014.

Chiefs dominated the early proceedings, but it was Thembinkosi Lorch who put Pirates ahead after receiving a defense splitting pass from Pule.

Pirates joy was shortlived, with Colombian Leonardo Castro finding the equaliser five minutes later.

Finally, Pirates restored their lead with Zambian Justin Shonga scoring from inside the box, six minutes from full time.

Germany's Alexander Zverev celebrates
Zverev beats Isner to reach last four at ATP Finals
16 November 2018, 7:32 PM

Alexander Zverev became the first German to reach the last four at the ATP Finals for 15 years as he beat American John Isner 7-6 (5) 6-3 at the O2 Arena on Friday.

The 21-year-old edged a tight opening set before breaking in the eighth game of the second to close in on his second victory in the Gustavo Kuerten group and move on to a semi-final clash against six-times champion Roger Federer.

His victory meant the day’s second singles between group winner Novak Djokovic and Marin Cilic is academic — apart from ranking points and the $200,000 on offer for each round-robin win at the year-ending showpiece.

Zverev became the first German in the semi-finals of the event since Rainer Schuettler lost in the last four to Andre Agassi in 2003 in Houston.

World number 10 Isner still harboured hopes of reaching the semi-finals despite losing his first two matches.

A straight sets victory and a win for Djokovic later would have seen him scrape into the weekend.

When he levelled the tiebreak at 5-5 with a thunderous forehand return it still looked possible, but Zverev responded with a superbly improvised pass on the next point before Isner dumped a forehand into the net.

Despite his hopes having gone, Isner stuck to his task in the second set but Zverev, still needing the victory to make sure of his semi-final berth, powered to his 56th match win of the year.

Zverev, the leader of the next generation of players expected to dominate the game in years to come, is the youngest semi-finalist at the tournament since Juan Martin del Potro reached the final in London in 2009.

Regardless of what happens in the day’s second singles Djokovic will play South Africa’s Kevin Anderson in the other semi-final on Saturday.

Anderson hitting a backhand.
Anderson off to flyer at ATP Finals with win over Thiem
11 November 2018, 9:27 PM

Kevin Anderson made a winning debut at the ATP Finals with a 6-3 7-6 (10) victory over Austrian Dominic Thiem in the opening singles match at the O2 Arena on Sunday.

Wimbledon runner-up Anderson, the first South African to qualify for the season-ender since Wayne Ferreira in 1995, was comfortably the better player in a one-sided first set.

The second set was a much tighter affair with serve dominating but Anderson sneaked a gripping tiebreaker 12-10 on his fourth match point, banging down his 13th ace to open his account in the Lleyton Hewitt group.

Anderson, 32, celebrated by leading the packed crowd in singing ‘happy birthday’ to his wife Kelsey.

Swiss Roger Federer will begin his quest for a record-extending seventh title at the eight-man season-ender when he faces Japan’s Kei Nishikori in the evening session.

Anderson had lost both his matches against Thiem this year, having won their previous six clashes, and he looked fired-up to reassert his dominance over this year’s French Open runner-up.

He broke serve in the fourth game after a deep service return forced an error from the Austrian and had chances for a double break two games later but Thiem hung in.

Anderson wrapped up the set on serve at 5-3 but Thiem came out striking the ball with more aggression in the second set and improved his serving percentage to such an extent that he conceded only two of 25 points after landing his first delivery.

Thiem could make little impression on the Anderson serve either, though, and the match drifted into a tiebreaker.

The 25-year-old Austrian saved a match point at 5-6 before playing a sensational point to earn a set point of his own, only to then net a forehand off a powerful Anderson first serve.

World number six Anderson earned a second match point and again Thiem responded strongly, saving it with a deft volley.

Anderson fired down an ace to save a second set point and, despite failing to convert a third match point, he would not be denied.

Having to still play Federer, Thiem is now in danger of falling at the group phase for the third year in a row.

The Gustavo Kuerten Group, featuring world number one and tournament favourite Novak Djokovic, Marin Cilic, Alexander Zverev and American debutant John Isner begins on Monday.

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