MORGAN STANLEY & ROSNEFT: MOVING AHEAD
Morgan Stanley does not believe new U.S. sanctions on Russian oil company Rosneft will affect a pending deal between the two companies, the bank's chief financial officer said on Thursday.
The bank's management is moving ahead with plans to sell the majority of its global physical oil trading operations to Rosneft later this year, CFO Ruth Porat said in an interview.
"Recognizing the guidance was just released last night, we don't believe it applies to our transaction," she said. "We continue to do all the work necessary for closing by the end of the year, obviously subject to regulatory approval."
Her comments come a day after the U.S. government imposed its toughest sanctions yet on some of the key players in the Russian economy over what Washington says is Moscow's reluctance to curb violence in Ukraine. The move closed off medium- and long-term dollar funding to Rosneft, the country's second-largest gas producer Novatek and its third-largest bank, Gazprombank.
The measures stopped short of freezing the companies' assets, restricting the short-term funding the companies need for day-to-day operations or stopping U.S. firms doing business with them.
But they had raised some doubts about whether mounting political tensions with Moscow could complicate the bank's deal to sell the majority of its global physical oil trading operations to Russia's largest oil producer.
The Wall Street bank agreed to the sale in December before Russia launched an incursion into Ukraine's Crimean peninsula.
It recently submitted the transaction for review by the U.S. Committee on Foreign Investment (CFIUS), an inter-agency executive branch panel that examines foreign investment for potential threats to national security.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.