e_Paper 1-12-2016

14
THURSDAY, DECEMBER 1, 2016
DT
Business
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Dhaka Tribune
Oil jumps 8% as
Opec agrees first
production cut
since 2008
• Reuters
Oil prices jumped more than
8% yesterday to a five-week
high as some of the world’s
largest oil producers agreed
to curb oil output for the first
time since 2008 in a last-ditch
bid to support prices.
Opec will reduce production
by 1.2 million barrels a
day to 32.5 million a day, two
delegates said during a ministerial
meeting in Vienna,
asking not to be identified as
the decision isn’t yet public.
Benchmark Brent crude rose
8% to $50.07 a barrel in London
at 1:37 pm local time.
The Organization of the
Petroleum Exporting Countries
has agreed its first output
limiting deal in eight years, an
Opec source told Reuters as
the debates continued in Vienna
on the exact size of each
member’s cuts.
Key Opec member Saudi
Arabia said it was prepared
to accept “a big hit” on its
own production and agree to
arch-rival Iran freezing output
at pre-sanctions levels.
“It does rather look as
though Opec is going to come
to an agreement,” said Colin
Smith, director of oil and gas
research at Panmure Gordon
in London. A preliminary
agreement struck in Algiers
in September set an output
cap at around 32.5-33 million
barrels per day compared with
the current 33.64 million bpd.
Before Wednesday’s meeting,
Saudi Energy Minister
Khalid al-Falih said Opec was
indeed focusing on reducing
output to a ceiling of 32.5
million bpd and hoped Russia
and other non-Opec producers
would contribute a cut of
another 0.6 million bpd.
“The extent of the (price)
move shows no one wants to
miss the boat. There must be
a general consensus that there
will be a cut, whether it’s going
to be bullish, I don’t know,
but it’s the domino effect,”
PVM Oil Associates analyst
Tamas Varga said.
Traders said markets were
jittery and prices could swing
sharply in either direction depending
on developments in
Vienna.
Iran and Iraq have been
resisting pressure from Saudi
Arabia to curtail production,
making it harder for the group
to reach an agreement on output
cuts.
Analysts at Goldman Sachs,
Barclays, and ANZ said oil prices
would quickly fall to the low
$40s a barrel if Opec fails to
strike a deal to cut output. •
Philip Morris CEO looks
towards phasing out
cigarettes
• Reuters
Philip Morris International,
the world’s largest international
tobacco company,
could eventually stop selling
cigarettes, its chief executive
told the BBC yesterday, as it
launched its alternative product
IQOS in Britain.
The company’s IQOS
smokeless cigarette, which is
already on sale in over a dozen
markets including Japan, Switzerland
and Italy, heats tobacco
enough to produce a vapor
without burning it. The company
believes that makes it much
less harmful than cigarettes.
Japan Tobacco International
also has a tobacco-based
cigarette alternative called
Ploom Tech, and British American
Tobacco said this month
that it was also testing one.
“I believe there will come a
moment in time where I would
say we have sufficient adoption
of these alternative products ...
to start envisaging, together
with governments, a phase-out
period for cigarettes,” Andre
Calantzopoulos said in an interview
on BBC Radio 4.
“I hope this time will come
soon,” he added.
Philip Morris, the maker
of Marlboro cigarettes everywhere
except the United
States, gets the vast majority
of its sales and profits from
traditional cigarettes, which
kill an estimated 6 million
people a year worldwide. •