Barnier Concerns That Extra Barrels from Higher Output, Angola Exported the Two Nations Could Swamp More Cargoes Than in July and Cutback Made Elsewhere

BUSINESS

Friday 1 September 2017

PAGE | 15 QE PAGE | 15 8,800.56 21,948.10 7,430.62 $47.09 India economic -58.34 +55.67 PTS +65.36 PTS +1.13 Macron unveils 0.66% 0.25% 0.89% growth slips to ﬂagship labour DOW FTSE100 BRENT 5.7% in Q1 reform Dow & Brent before going to press

US to release 1m barrels of oil from strategic reserve Washington Oil loan 2012, 400,000 barrels of sweet quarter of the country’s refining Reuters crude and 600,000 barrels of output after it lashed Houston The move is the first sour crude oil will be sent via with record floods before it he US Energy Depart- emergency release pipeline to the refinery. spread to the Louisiana coast, ment said yesterday from the reserve The releases, the first of another refining hub. that it would release a since 2012. which was announced on Thurs- US petrol prices surged anew second batch of oil day morning, were exchange in morning trade after the Colo- from the Strategic The government agreements, meaning the gov- nial Pipeline Co, which operates TPetroleum Reserve totaling 1 mil- ernment will loan crude to the biggest US fuel transport sys- plans to released lion barrels as Tropical Storm Phillips 66, which is required to tem, said it would shut its main 400,000 barrels of Harvey’s disruption of the petro- replace the oil at a later date. lines to the Northeast amid out- sweet crude and leum industry has spiked motor The SPR, established in the ages at pumping points and lack fuel prices. 600,000 barrels of early 1970s after the Arab oil of supply from refiners. The oil will be delivered to sour crude to Phillips embargo caused panics over fuel The Energy Department “will the Phillips 66 refinery in Lake 66 as part of an supply, currently contains 679 continue to provide assistance as Charles, Louisiana, a department exchange agreement. million barrels of oil. It is a small deemed necessary, and will con- statement said. That refinery has release of crude for a country tinue to review incoming requests Democrat, urged the department which holds a total of 1 million not been affected by the storm, that uses nearly 20 million bar- for SPR crude oil,” spokeswoman this week to also release gaso- barrels of oil in three locations which has hammered the Gulf In the first tapping of the rels of petroleum daily. Jess Szymanski said. line from the country’s in the Northeast: New York Har- Coast for several days. reserve for an emergency since Harvey shut down about a Senator Edward Markey, a emergency gasoline reserve, bor, Boston and Maine.

French PM’s visit to start-up incubator GE to cut Opec oil output slips jobs in bid to from 2017 high on reduce costs renewed Libyan outages GENERAL Electric Co is mak- ing plans to significantly reduce corporate staff in an effort to London ministers at a July 24 meeting cut spending and boost profits Reuters moved to cap Nigerian output, under its new chief executive, although they stopped short of and the company already has PEC oil output has fallen asking Libya to join the supply- halted hiring in certain tech- this month by 170,000 cutting deal, and called on nology positions, according to Obarrels per day (bpd) several members to boost a socurce. from a 2017 high, a Reuters sur- compliance. New Chief Executive vey found, as renewed unrest August’s biggest drop came Officer John Flannery has told cut supplies in Libya and other from Libya, where output senior-level executives to members stepped up compli- slipped to an average of prepare for cuts at headquar- ance with a production-cutting 900,000 bpd as unrest forced ters and other areas of the deal. the shutdown of the country’s company that do not produce A dip in supply from top largest oilfield, Sharara, plus FROM LEFT: Jean-Yves Le Drian, French Foreign Affairs Minister; Xavier Niel, Founder of revenue or profit. It was not two producers Saudi Arabia and other sites, putting a supply French broadband Internet provider Iliad; Jean-Baptiste Lemoyne, French Junior Foreign known how many jobs would Iraq helped to boost Opec’s recovery on hold for now. Affairs Minister; Edouard Philippe, French Prime Minister; and Mounir Mahjoubi, French be eliminated. GE declined to adherence to its output curbs Iraqi supply came in slightly Junior Minister for the Digital Sector visit the start-up incubator “Station F” in Paris, discuss details but noted that to 89 percent, up 5 percentage lower than July because of a dip France, yesterday, as part of the annual gathering of French Ambassadors. in March it announced plans points from July but still short in exports from the south and to reduce overhead. of the levels above 90 percent north of the country - although achieved earlier in the year. Baghdad still has some way to The decline from Libya, and go to match the compliance lev- the lack of a further sizeable els of other large producers. increase from Nigeria, will ease Among countries with No ‘decisive progress’ in Brexit talks: Barnier concerns that extra barrels from higher output, Angola exported the two nations could swamp more cargoes than in July and cutback made elsewhere. Libya supply in Nigeria edged higher Brussels Brussels. The officials did take a line,” Davis said. “We are a coun- and Nigeria were exempt from as Shell’s Nigerian venture lifted AFP slightly more positive tone than try which meets its international the cuts because conflict had a force majeure on Bonny Light when they began Monday, when obligations,” Davis added firmly. curbed their production. crude exports. U chief Brexit negotiator Barnier said, to a grim-faced For his part, Barnier, said “Libya’s production has Opec announced a produc- Michel Barnier (pictured) Davis, that Britain must start “EU taxpayers at 27 (member dropped by more than 350,000 tion target of 32.50 million bpd Ewarned yesterday that the negotiating “seriously”. states) should not pay for obli- bpd this past week,” said Ole last year, which was based on European Union and Britain had Davis was more upbeat, gations taken at 28.” Hansen, a commodities analyst low figures for Libya and made no substantial break- although he reiterated his call “The UK in July recognised at Saxo Bank. Nigeria. The target includes throughs in talks this week, with for the European side to show it had obligations beyond the As part of a deal with Rus- Indonesia, which has since left the key financial settlement a more flexibility, especially on the Brexit date but this week, the UK sia and other non-members, the Opec, and does not include major stumbling bloc. divorce bill the UK must pay as explained that its obligations will Organization of the Petroleum Equatorial Guinea, the latest The latest, third round of a price for leaving the bloc. Brit- be limited to its last payment Exporting Countries is reducing country to join Opec. talks concluded with Barnier and ain’s Brexit settlement is before exit,” he said. output by about 1.2 million bpd According to the survey, his British counterpart David estimated at up to €100bn in The EU has longstanding key areas—EU citizen rights, from January 1, 2017 until March output in August has averaged Davis both underlining remain- Brussels but at 40 billion, commitments, agreed to by Brit- Northern Ireland’s border and next year. High compliance and 32.68 million bpd, about ing differences despite time according to reports in ain as a member state, in for the exit bill—before it will con- much-reduced output in the 930,000 bpd above the target running out on achieving a com- London. example loans for Ukraine or to sider post-Brexit arrangements. exempt countries pushed sup- adjusted to remove Indonesia prehensive divorce deal. “The EU has made a claim the African Development Bank, EU leaders will review the talks ply lower in early 2017. But and not including Equatorial “This week provided useful on the UK taxpayer, undoubt- and London could not simply in October to see how far they extra Libyan and Nigerian pro- Guinea. clarifications... but we did not get edly a large number, on the basis walk away from them, he added. have got and whether it is pos- duction, and slipping adherence With Equatorial Guinea any decisive progress on the cen- of what it says are our legal obli- The European Union says sible to take up London’s in some countries, prompted added, total Opec production in tral subjects,” Barnier told a joint gations. The proper approach to there must be “sufficient demand for negotiations on a output to rise to a 2017 high last July totalled 32.83 million bpd, press conference with Davis in this is to go through it line by progress” in three free trade deal. month. To address this, a drop of 170,000 bpd from July. BUSINESS FRIDAY 1 SEPTEMBER 2017 15 India economic growth N-BOX mini-vehicle goes on sale slips to 5.7% in Q1

New Delhi Demonetisation and caused a severe currency AFP shortage, putting the brakes on Experts say Modi’s consumer spending in a country ndia’s growth slumped to 5.7 sudden decision in dependent on cash percent in the first quarter of November to withdraw transactions. Ithe financial year, official data all 500 rupee and The move was blamed for showed yesterday, below predic- 1,000 rupee notes poor growth figures of 6.1 per- tions as a controversial banknote from circulation is still cent in the first three months of ban dragged further on the dragging on economic this year. Modi defended the so- economy. growth. called demonetisation as a The figures released by the necessary strike against corrup- Central Statistics Office were tion, arguing it would boost tax lower than the 6.1 percent In a survey released in revenues and root out those recorded in the previous quar- August, the government hoarding cash to avoid paying ter, and less than forecast by warned of looming their dues. many analysts in one of the forces threatening to But on Wednesday the gov- world’s fastest growing drag on growth, ernment received more flak Honda Motor Co Chief Officer for Regional Operations (Japan) Kimiyoshi Teratani holds economies. including appreciation when India’s central bank in its an electric power storage device LiB-AID E500 while standing in front of the compay’s The slowdown bodes ill as of the Indian currency annual report revealed that new N-BOX mini-vehicle during a press preview at its headquaters in Tokyo yesterday. India — a nation of 1.25 billion — and the roll-out of a nearly all the currency which was Honda will begin sales in Japan of the N-BOX mini-vehicle today. tries to absorb tens of thousands national goods and withdrawn from circulation had of new jobseekers into the econ- services tax (GST). been deposited in banks, suggest- omy every month. The official ing that little unaccounted cash growth figures “undershot our, had been hoarded to begin with. and market expectations, by a of looming forces threatening to Yesterday, the government’s considerable degree”, Aditi drag on growth, including appre- chief statistician blamed the Nayar, principal economist at rat- ciation of the Indian currency and slump on a slowdown in manu- US consumer spending rises ing firm ICRA, said. the roll-out of a national goods facturing and not on the cash ban. “The lingering impact of and services tax (GST). Last year, “One of the major reasons for fall demonetisation is visible” in India’s economy clocked 7.1 per- in GDP growth for first quarter is Washington spending, which accounts for months through June. The core some sectors, she added, refer- cent for the first quarter. But since because of a slowdown in man- Reuters more than two-thirds of US eco- PCE price index has undershot ring to last year’s cash ban. then Prime Minister Narendra ufacturing sector,” T C A Anant nomic activity, increased 0.3 the U.S. central bank’s 2 percent It also underscores India’s lag Modi has rolled out two large told reporters. S consumer spending rose percent last month after a 0.2 target for the past five years. behind regional rival China, economic reforms — the GST, and “The data we saw from slightly less than percent gain in June. Economists The combination of moder- whose economy expanded at 6.9 the snap withdrawal of most of November onwards indicated the Uexpected in July and had forecast consumer spend- ate consumer spending and percent over the same period. India’s high-value banknotes slowdown had started in second annual inflation increased at its ing rising 0.4 percent in July. tepid inflation casts doubts on “At 5.7 percent, it’s a big dis- from circulation. quarter of 2016,” he said. “The slowest pace since late 2015, The personal consumption whether the Fed will increase appointment,” Madan Sabnavis, Some economic disruption entire demonetisation happened which could diminish expecta- expenditures (PCE) price index interest rates at its December chief economist at CARE Ratings, from the GST was expected this in later stages of 2016 but slow- tions of an interest rate increase excluding food and energy policy meeting, as most econo- said. “This is the lowest growth quarter, as businesses prepared down had started before that.” in December. edged up 0.1 percent in July. The mists expect. The US central we’ve seen in the past couple of for the onset of the new tax Industry body PHD Chamber Inflation remains stubbornly so-called core PCE price index, bank has raised borrowing costs years and going to even 7.0 per- regime from July 1. of Commerce and Industry called low even as the labour market which is the Fed’s preferred twice this year. cent for this financial year will be But experts say Modi’s sud- the growth data “disappointing” is near full employment, a inflation measure, has now risen The consumer spending a big challenge.” den decision in November to and said there was “a need to conundrum for the Federal by the same margin for three report still suggested the econ- In February, the government withdraw all 500 rupee and focus on reforms to improve the Reserve. Other data yesterday straight months. In the 12 omy got off to a strong start in had forecast GDP growth of 1,000 rupee notes from circula- ease of doing business scenario showed a small increase in new months through July, the core the third quarter after gross between 6.75 percent and 7.5 tion is still dragging on economic particularly for (micro, small and applications for unemployment PCE price index increased 1.4 domestic product increased at percent for 2017/18. growth. medium enterprises) in order to benefits last week amid a tight- percent, the smallest gain since a 3.0 percent annualised rate in But in a survey released in The shock move rendered 86 encourage the setting up of more ening job market. The Commerce December 2015. That followed the April-June period, the fast- August, the government warned percent of India’s currency void industries.” Department said consumer a 1.5 percent rise in the 12 est in more than two years.

Gold rises Dusseldorf Caravan Salon EU rolls out stricter as dollar car emissions test retreats Brussels tests have been used as the Reuters benchmark for assessing vehi- London cle emissions, with carmakers Reuters ew on-road car emis- employing a variety of strategies sions testing comes into - such as taping up doors and old prices rose yester- Nforce in the European windows - to produce better day as the dollar Union today as regulators strive results than possible on the road. Gretreated after data to prevent a repeat of Volkswa- Carmakers had lobbied for showed subdued price pres- gen’s diesel emissions scandal. a three-year delay to the rules sures in the United States, The German carmaker’s admis- that will reduce the fuel-saving while rising security concerns sion in September 2015 that it claims they can make for their created by tensions on the used software to cheat US die- vehicles, an industry paper seen Korean peninsula supported sel emission tests highlighted by Reuters showed. sentiment. the laxness of the EU’s own However, the European The dollar slipped on news tests, prompting reforms. Automobile Manufacturers’ Asso- that annual inflation rose at its The new process, known as ciation (ACEA) - whose members slowest pace since late 2015, Real Driving Emissions (RDE), include BMW, Volkswagen and which diminished expectations is designed to reflect everyday Fiat Chrysler - said yesterday that of a Fed rate rise in December. driving conditions and to nar- the more stringent rules “provide A falling US currency — Visitors inspect caravans during the Dusseldorf Caravan Salon 2017, an international row the disparity between road a more accurate basis for meas- already near its lowest since mobile vacationing fair, in Dusseldorf, Germany. and laboratory test results. uring a vehicle’s fuel 2015 — makes dollar-denom- Until now only laboratory consumption and emissions”. inated gold cheaper for holders of other currencies, which could boost demand. Spot gold was up 0.2 percent at $1,311.77 an ounce at 1344 GMT, on track for a rise Macron unveils ﬂagship labour reform around 3 percent this month. US gold futures gained 0.2 Paris limiting unfair dismissal awards But crucially from Macron’s that has not defeated mass first demonstrations against his percent to $1,316.80. Gold AFP and allowing bosses to negotiate perspective, neither of them said unemployment for more than government, with the CGT union, prices are up around 13 per- working terms and conditions they would recommend their three decades,” he told Le Point and the new political party cent so far this year. rench President Emmanuel directly with their employees. members join planned street pro- magazine in an interview pub- France Unbowed calling for pro- Oxford Economics Macron’s government Prime Minister Edouard tests next month by the lished late on Wednesday. tests on September 12 and 23. expects the gold price to aver- Funveiled a major overhaul Philippe, unveiling the changes Communist-backed CGT, France’s He warned last week that the Philippe Martinez, the head age $1,265 in the fourth of the labour code yesterday, a at a press conference, called biggest union. The reform is a piv- French “hated reforms” and tried of the CGT, said on Thursday that quarter and $1,270 next year. signature reform that will test his them “ambitious, balanced and otal part of Macron’s domestic to avoid them as long as possi- “all our fears have been con- This week, the Fed’s pre- ability to force through business- fair” and said they would help agenda and the first step of a ble—but his European partners firmed” by the announcements. ferred inflation measure, the friendly changes and face down France “make up for lost years” planned overhaul of France’s are watching closely to see if he The announcement comes at a personal consumption expen- protests. of mass unemployment. social model which is set to can succeed where others have time when Macron’s approval ditures (PCE) price index The 39-year-old centrist sees “There are differences. We include other changes to unem- failed. The changes will be ratings are falling sharply, sig- excluding food and energy, overhauling France’s rigid labour accept them,” Philippe said, ployment benefits and pensions. implemented via executive nalling the end of the showed a 0.9 percent rise in regulations as key to tackling the referring to criticism from some The former economy minis- order, allowing Macron to avoid honeymoon he enjoyed with the the second quarter, its slow- unemployment rate which is large trade unions but praise ter campaigned on a promise to a lengthy parliamentary debate. public following his election. est in more than two years. currently 9.5 percent in France from small business groups. encourage entrepreneurship in The overhaul will be adopted Recent polls showed that Elsewhere, silver rose — roughly twice the level of Brit- The moderate CFDT union France, pledging to make the by the government next month only around 40 percent of 0.2 percent to $17.41 an ain or Germany. said it was “disappointed” by the country a better place to do busi- and must then be ratified by par- French voters are satisfied with ounce, platinum lost 0.2 The measures are aimed in proposed changes overall, while ness in the mould of Germany or liament, where the president’s his performance in office, with percent to $984.74 and pal- particular at helping small and the hard-left Force Ouvriere (FO) Scandinavian nations. Republic on the Move party has the fall attributed by analysts to ladium added 0.7 percent to medium-sized business by curb- union also said it disagreed with “We are the only major a large majority. a mix of communication prob- $933.6. ing the power of trade unions, many of the measures. economy in the European Union The move is set to bring the lems and political missteps.