SUNRISE CAPITAL (PVT) LTD | 26 OCTOBER 2016 | TAKE OFF

Oil Prices Plunge After API Reports Significant Build To U.S. Crude Stocks

American crude oil supplies surged upwards by 4.8 million barrels this week, almost completely offsetting last week’s 5.2-million-barrel draw, according to the American Petroleum Institute (API) report released on Tuesday.This week’s inventory build will likely press further down on oil prices, which were already trading down on the market’s increasing uneasiness over the OPEC drama, including Iraq’s OPEC rebellion, Russia’s vague and vacillating comments as to whether they’ll join in a freeze or a cut, and Venezuela’s pleas to get non-OPEC members to cut in proportion to the bloc’s to-be-determined limits.The West Texas Intermediate (WTI) price settled to three-week lows once the report went public Tuesday afternoon. At the time of the report’s writing, WTI stood at $49.30 – down 2.41 percent from the day’s start, while Brent fell to $50.29, or 2.27 percent from the open.Experts had predicted an inventory build of two million barrels of crude, according to Zero Hedge.

ADB offers to increase assistance to help Pakistan become trading hub

Asian Develo­pment Bank (ADB) President Tak­e­hiko Nakao on Tuesday offered to increase its development assistance to Pakistan and called for improved governance and security, reviving agriculture and increasing exports.“Given the strong economic credentials of Pakistan and growth trajectory, the ADB is actively considering to increase its assistance in infrastructure, roads and railways, port facilities and energy sector in Pakistan,” the Ministry of Finance quoted Mr Nakao as saying.The ADB president arrived on Tuesday on a two-day visit and met Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar. He will also attend Central Asia Regional Economic Cooperation (CAREC) ministerial meeting on Wednesday.

Govt set to abandon gas supply plan

With gas shortages expected to hit consumers hard in the upcoming winter season, the government is set to shelve a plan of dedicated gas supply from new discoveries to a group of four fertiliser plants approved during the tenure of previous Pakistan Peoples Party (PPP) government, officials say.The Economic Coordination Committee (ECC), in its meeting held on December 18, 2012, had allocated 202 million cubic feet of gas per day (mmcfd) from the newly discovered sources to four fertiliser plants – Engro Fertilizers, Dawood Hercules, Pakarab Fertilizers and Agritech Limited.

Ogra may recommend hike in POL products' prices

Oil and Gas Regulatory Authority (Ogra) is likely to recommend a rise in the prices of petroleum products by Rs 3 to Rs 5 per litre effective November 1, 2016 however the prevailing political situation may deter the government from approving the raise. Reliable sources in the Ministry of Petroleum and Ogra told Business Recorder Tuesday that as per current international crude oil prices, Ogra is likely to recommend a rise in High Speed Diesel (HSD) by Rs 5 per litre, motor sprit (Petrol) by Rs 3 per litre, Light Diesel Oil (LDO) by Rs 4.5 per litre and kerosene oil by Rs 4 per litre from November 1.The government's refusal to raise prices would cost an estimated Rs 5 billion in revenue as it would be compelled to lower taxes on petroleum products.

Ministry to discuss issues related with planned KE resale

The management of Karachi Electric (KE) is reportedly engaging several influentials to get the same incentives for new buyers, ie, Shanghai Electric of China, as those available to Abraaj Group which currently owns 66 per cent stakes in the company, well-informed sources told Business Recorder. Chinese government-owned Shanghai Electric Power Co has qualified as the final bidder for the controlling stake worth an estimated $1.6 billion. The company intends to acquire up to 18.335 billion ordinary shares, 66 percent of the total number of issued shares of K-Electric from KES Power.Ministry of Water and Power, sources said, is planning to convene a high-level meeting this week to discuss issues associated with the resale of KE. The sources said, KE management has submitted documents of the new deal with the Security and Exchange Commission of Pakistan (SECP) but was showing a reluctance to share it with the Ministry of Water and Power.

Opec output cut may hasten oil market rebalance: IEA

The oversupplied oil market will be rebalanced earlier than expected if major crude producers implement a deal to cap output when they meet next month, the International Energy Agency chief said Tuesday. Under current conditions, the IEA expects global output to exceed demand until the second half of 2017, Fatih Birol told journalists on the sidelines of an energy conference in Singapore."But we know that the producers are thinking of intervening in the markets. The Opec and non-Opec producers, if they intervene in the markets, this rebalance can be earlier than the second half of 2017," he said. In a surprise move, Opec (Organisation of the Petroleum Exporting Countries) members led by oil kingpin Saudi Arabia last month agreed on a deal to trim production, sending crude prices surging.