Commodity markets

More oil output cuts

As we had expected, at the weekend a group of eleven non-OPEC states agreed to reduce their joint crude oil production by 558 kbd. The non-OPEC group thus meets a corresponding “condition sine qua non” demand from the OPEC states. OPEC had made the implementation of its own decision to cut production (30.11.) by a nominal 1.2 mbd conditional on the non-OPEC states also agreeing to contribute an additional volume of between 500 and 880 kbd to the cutback. Russia will be responsible for the bulk of the non-OPEC cut and will reduce its production level by 300 kbd in the course of H1 2017. Russia’s energy minister Alexander Novak said that this is a “genuine cut” that will reduce the production volume from 11.25 mbd to 10.95 mbd by April/May. Further contributions to the reduction come from Mexico (-100 kbd), Oman (-45 kbd), Azerbaijan (-35 kbd), Malaysia (-20 kbd)…

Australia is going through a structural transformation – away from raw materials exports

Australia is going through a process of economic diversification. The country is an important global supplier not only of iron ore, coal, bauxite and various precious metals, but also of liquid gas. As such it is feeling the pinch of the end of the super cycle and the steep fall in prices in these markets. It also needs to change the focus of its production structure in order to put an end to its dependency on raw materials exports and to be able to maintain high economic growth in the future. Since 2013 investment and employment in Australia’s raw materials sector have been declining. The conservative Prime Minister, Malcolm Turnbull, aims to accelerate the restructuring process by political means. As regards corporate restructuring, Turnbull is focusing especially on smaller companies. Worthy of note here are his plans to promote tourism and tourism-related services as revenues from tourists from China and…

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