(Bloomberg) — Oil climbed in London following a sixth weekly increase after OPEC and its allies agreed to extend production curbs, although skepticism the cartel would be able to ensure full compliance tempered the gains.Brent futures rose 1.2% after swinging between gains and losses earlier. OPEC+ will prolong its historic curbs for an extra month and while the group cajoled Iraq, Nigeria and others to fulfill their promises to reduce production, concerns remain about the laggards sticking to their pledge. Libya, which is exempt to the cuts due to its civil war, is also returning supply to the market just as demand rebounds following the easing of lockdowns.“The issue of compliance is a major fault line in OPEC+ now,” said Vandana Hari, founder of energy consultancy Vanda Insights in Singapore. “Crude had mostly priced in the one-month extension of deeper cuts by Friday.”Oil has doubled since April as OPEC+ cuts trimmed a global glut and demand staged a rebound after the easing of restrictions in some countries, particularly China. Still, a sustained recovery may be hampered by deteriorating relations between Washington and Beijing, a second wave of infections, or returning U.S. shale supply following a gain in crude prices.The extension is a victory for Saudi Arabia and Russia, which were deadlocked in a price war just two months ago. OPEC+ agreed to cut output by 9.6 million barrels a day in July, 100,000 barrels a day less than this month as Mexico will end its constraints. Any member that doesn’t implement 100% of its curbs in May and June will make extra cuts from July to September to compensate.See also: Saudi Arabia and Russia Unite to Tackle OPEC’s Pinocchio Problem“The only potential Achilles heel, in what seemingly is an expected extension of current deep cuts through July, is the caveat of sub-compliant members requirement to compensate for lack of compliance,” Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a note. “Countries such as Iraq and Nigeria will struggle, we believe, to compensate fully, which puts increased pressure on the coherence of the alliance.”Following the extension to supply cuts, Saudi Arabia made some of the biggest increases to the price of its crude, with the steepest hitting July exports to Asia. The month-on-month boost to its flagship Arab Light to Asia, which accounts for more than half of Saudi oil sales, is the largest in at least 20 years. Overall, the gains erased almost all of the discounts the kingdom made during its brief price war with Russia.Meanwhile, Libya’s biggest oilfield is gradually resuming production after a five-month shutdown due to civil war. Output will start at an initial 30,000 barrels a day at Sharara and it will take three months to return to full capacity, according to National Oil Corp. It was pumping about 300,000 barrels a day before the shutdown.See also: China’s Oil Demand Recovery Is Complete With Record Import HaulIn the U.S. Gulf of Mexico, offshore drillers idled about a third of oil production, amounting to about 636,000 barrels of daily output, due to Tropical Storm Cristobal, according to the Bureau of Safety and Environmental Enforcement. The storm has crossed the coast.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
from Yahoo Finance https://ift.tt/30pFvn4
Contemporary Amperex Technology Co. Ltd.'s chairman and founder Zeng Yuqun disclosed that his company, which already manufactures batteries for Tesla Inc. (NASDAQ: TSLA) and Volkswagen AG (OTC: VWAGY) is ready to make electric car batteries which will last as long as 16 years and 1.24 million miles.Million Mile Battery Is A Key Advance Batteries that last longer are important for electric vehicle makers such as Tesla and Volkswagen, as they can help them attract customers. These types of batteries could also be reused in a second vehicle increasing the attractiveness of EVs. Tesla is also working on this type of battery while cooperating with CATL.Waiting For Orders Talking to Bloomberg at the company headquarters at Ningde, China, Zeng disclosed, "If someone places an order, we are ready to produce." He said that the costs of such long-lasting batteries would be 10% higher than those currently in use. CATL is the world's largest maker of batteries. The company has a two-year battery supplier agreement with Tesla effective between July 2020 and June 2022.EV Demand To Pick Up Pace The ongoing COVID-19 pandemic is affecting sales, but EV demand is expected to pick up pace in early 2021, according to Zeng. He expects pent-up demand to be unleashed next year. CATL's batteries are used in Model 3 cars made by Tesla at its Shanghai Gigafactory. Other customers include Bayerische Motoren Werke AG (OTC: BMWYY) and Toyota Motor Corp. (NYSE: TM)Musk Is A Fun Guy Zeng told Bloomberg he often shares text messages with Tesla CEO Elon Musk, who he described as a "fun guy.""He's talking about cost all day long, and I'm making sure we have the solutions," said the chairman. Zeng also revealed that he had helped Musk in securing ventilators for COVID-19 patients. Musk had delivered 1000 such machines, obtained from China, to Los Angeles in March.May Build A Plant In The United States CATL is building a factory in Germany that would make more than 70% of batteries required by BMW. The Chinese battery maker is also working with Volkswagen's Audi and Porsche units. Zeng said although there are no specific plans for the U.S., he does not rule out building a plant in the country. He said, "Our team has made achievements in competing with our global rivals in overseas markets."See more from Benzinga * Scientists Funded By Chan Zuckerberg Foundation Want Facebook To Clamp Down On Misinformation And Incendiary Speech * British Drug Maker AstraZeneca Approached Gilead With The Deal That Can Become The Biggest On The Record * Starship Is Top Priority, Elon Musk Tells To SpaceX Employees(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.