Without Opec cut, expect oil glut in 2017; ‘Oval office will tame Donald Trump’; India’s currency chaos

1 Without Opec cut, expect oil glut in 2017 (Khaleej Times) The oil market surplus may run into a third year in 2017 without an output cut from Opec, while escalating production from exporters around the globe could lead to relentless supply growth, the International Energy Agency (IEA) said on Thursday.

The group said global supply rose by 800,000 barrels per day in October to 97.8 million bpd, led by record Opec output and rising production from non-Opec members such as Russia, Brazil, Canada and Kazakhstan.

The IEA kept its demand growth forecast for 2016 at 1.2 million bpd and expects consumption to increase at the same pace next year, having gradually slowed from a five-year peak of 1.8 million bpd in 2015.

The Organisation of the Petroleum Exporting Countries meets at the end of November to discuss a proposed cut in production to a range of 32.5 to 33 million bpd, but discord among members has raised doubt over Opec’s ability to deliver a meaningful reduction.

“If no agreement is reached and some individual members continue to expand their production, then the market will remain in surplus throughout the year. Indeed, if the supply surplus persists in 2017, there must be some risk of prices falling back,” IEA said.

http://khaleejtimes.com/business/markets/no-opec-cut-expect-oil-glut-in-2017-says-iea

2 ‘Oval office will tame Donald Trump’ (Nouriel Roubini in The Guardian) If Donal Trump governs in accordance with the campaign that got him elected, we can expect market scares in the US and around the world, as well as potentially significant economic damage. But there is good reason to expect that he will govern very differently.

A radical populist Trump would scrap the Trans-Pacific Partnership (TPP), repeal the North American Free Trade Agreement (Nafta), and impose high tariffs on Chinese imports. He would also build his promised US-Mexico border wall; deport millions of undocumented workers; restrict H1B visas for the skilled workers needed in the tech sector; and fully repeal the Affordable Care Act (Obamacare), which would leave millions of people without health insurance.

Overall, a radical Trump would significantly increase the US budget deficit. He would sharply reduce taxes on corporations and wealthy individuals. He would increase military and public-sector spending in areas such as infrastructure, and his tax cuts for the rich would reduce government revenue by $9tn over a decade.

But it is actually more likely that Trump will pursue pragmatic, centrist policies. For starters, Trump is a businessman who relishes the “art of the deal”, so he is by definition more of a pragmatist than a blinkered ideologue.

Once in office, Trump will throw symbolic red meat to his supporters while reverting to the traditional supply-side, trickle-down economic policies that Republicans have favoured for decades. Trump’s vice-presidential choice, Mike Pence, is an establishment GOP politician, and his campaign’s economic advisers were wealthy businessmen, financiers, real-estate developers, and supply-side economists.

The market itself will be Trump’s biggest constraint. If he tries to pursue radical populist policies, the response will be swift and punishing: stocks will plummet, the dollar will fall, investors will flee to US Treasury bonds, gold prices will spike, and so forth.

To be sure, the policy mix under a pragmatic Trump administration would be ideologically inconsistent and moderately bad for growth. But it would be far more acceptable to investors – and the world – than the radical agenda he promised his voters.

https://www.theguardian.com/business/2016/nov/11/oval-office-will-tame-us-president-donald-trump

3 India’s currency chaos (San Francisco Chronicle) Chaotic scenes played out across India on Saturday, with long lines growing even longer and scuffles breaking out, as millions of anxious people tried to change old currency notes that became worthless days earlier when the government demonetized high-value bills.

Paramilitary troops posted at banks in some of the most congested areas of New Delhi walked among the crowds urging people to stay calm. Frustrations grew as reports came in that some banks had run out of new currency notes.

On Tuesday, India’s government made a surprise announcement that all 500- and 1,000-rupee notes had no cash value, in an effort to tackle corruption and tax evasion. Problems arose because more than half of India’s more than 200,000 ATMs had not been reconfigured to dispense the new 2,000-rupee notes introduced by the government, according to Finance Minister Arun Jaitely.

He said it would take two to three weeks for all the ATMs in the country to be recalibrated to handle the new notes. He said the changes in the cash dispensers could not have been done earlier because the government wanted to maintain secrecy about the demonetization.

Meanwhile, anger was mounting as people, frustrated with the delays and long hours spent in serpentine lines, lost their cool, lashing out at the government and bank employees. Delhi police said they received more than 3,000 emergency calls reporting fights and scuffles in the city Friday as people crowded outside banks, waiting to exchange notes or withdraw money.

On Saturday, nearly 200 calls had been received in the first four hours since the banks opened at 9 a.m. local time, according to police. In the southern city of Kollam, furious crowds smashed glass panes and vandalized a bank after the manager announced to waiting clients that the bank had run out of new bills.

http://www.sfgate.com/news/world/article/Chaos-as-millions-in-India-crowd-banks-to-10609976.php

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About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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