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Oil Update – Oil Prices Slide; Indonesia proposes an OPEC-like group for nickel; Global dividends hit record high

RIYADH: Oil prices tumbled on Wednesday as COVID-19 cases in China continued to rise, prompting concerns over lower fuel demand at the world’s top crude importer that outweighed concerns regarding an escalation of geopolitical tensions and a tightening of oil supplies.

Brent crude futures fell 60 cents, or 0.6%, to $93.26 a barrel as of 08:01 a.m. KST, while US West Texas Intermediate crude futures fell 69 cents, or 0.8%, to $86.23 a barrel.

Indonesia proposes to Canada to create an OPEC-like group for nickel

Indonesia, in talks with Canada, has offered to establish an organization similar to the Organization of the Petroleum Exporting Countries for nickel-producing countries, the Southeast Asian country’s Ministry of Investment said on Wednesday. Is in a release.

Indonesia and Canada are respectively the first and sixth largest producers of nickel in the world.

The proposal was made when Indonesian Investment Minister Bahlil Lahadalia met with Canadian International Trade Minister Mary Ng on Tuesday on the sidelines of the G20 summit in Bali.

The minister raised the possibility of trying to “coordinate and integrate nickel policy” like OPEC, the group of 13 oil-producing nations that often determine global production, the statement said.

Bahlil had previously raised the idea of ​​such a grouping in an interview with the Financial Times last month, although he said at the time that Indonesia was still formulating a structure and had not yet approached other nickel producers.

In Wednesday’s statement, Bahlil said a group of nickel-producing countries could ensure they get optimal returns from the electric vehicle industry, accusing countries where electric vehicles are made of pursuing policies. protectionist trade.

“Through this collaboration, we hope that all nickel-producing countries can benefit from equitably distributed added value,” Bahlil said.

Ng said in the statement that the two countries could explore such collaboration and both shared a vision on optimizing natural resources in a sustainable manner.

Indonesia is keen to use its nickel reserves to attract investment in metal processing and further down the supply chain, including electric vehicle battery production and electric vehicle manufacturing in the country.

Global dividends hit record fueled by high oil prices

Stock dividends hit a world record high in the third quarter as oil companies brimming with cash due to high crude prices rewarded investors, according to a report on Wednesday.

Shareholders received $415.9 billion in dividends in the July-September period, asset management fund Janus Henderson said.

The 7% increase in overall payments to shareholders was largely due to payments made by oil companies, which jumped 75% from a year earlier to $46.4 billion.

Janus Henderson said without the increase in oil company dividends, overall third-quarter dividends would have remained flat from 2021.

With energy prices soaring following the Russian invasion of Ukraine in February, oil and gas companies made huge profits in the second quarter and many paid exceptional dividends to investors during the third quarter.

While energy prices have fallen from the highs reached in the first half, Janus Henderson does not expect the high level of windfall dividends to continue.

For all of 2022, Janus Henderson expects dividend payments to rise 8.3% to $1.56 trillion.

The asset manager warned that the slowdown in global growth expected in 2023 as central banks raise interest rates to bring down runaway inflation could impact corporate earnings and dividend payouts. .

After years of construction, Shell ethane cracker starts up

After years of construction, a massive petrochemical refinery in western Pennsylvania fueled by the vast reservoir of natural gas beneath Appalachia became fully operational on Tuesday, oil and gas giant Shell said.

The refinery will produce 3.5 billion pounds of polyethylene per year when it reaches full production by the second half of 2023, Shell said.

The refinery imports ethane from natural gas wells and chemically “cracks” the liquid fuel by heating it in furnaces to create ethylene, which is used to produce everything from plastics to tires to antifreeze.

Shell, the British oil and gas multinational headquartered in London, had planned to spend $6 billion on the plant.

(With contributions from Reuters, AP and AFP)

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