Oil prices end down despite lower US inventories

Oil prices fell to a fresh-multi year low on Wednesday as worries about a longstanding supply glut offset news of a surprise decline in US petroleum inventories. 

PHOTO: BLOOMBERG

DEC 10, 20157:07 AM

[NEW YORK] Oil prices fell to a fresh-multi year low on Wednesday as worries about a longstanding supply glut offset news of a surprise decline in US petroleum inventories.

US benchmark West Texas Intermediate for January delivery fell 35 cents to US$37.16 a barrel on the New York Mercantile Exchange, the lowest close since February 2009.

European benchmark Brent oil for January delivery shed 15 cents to US$40.11 a barrel in London.

Wednesday was the fourth straight day of falling prices. The declines follow a decision Friday by the Organisation of the Petroleum Exporting Countries not to cut output despite the weak global market.

Oil prices spent much of the session in positive territory after a US Department of Energy report showed US oil inventories fell 3.6 million barrels in the week ending December 4.

"We did have a fairly bullish number today on the headline number for crude," said Matt Smith, an energy analyst at ClipperData.

"I still feel like the market is not willing to push too much higher from here, given the backdrop of oversupply we're in." Tim Evans, an analyst at Citi Futures, said some of the data were inconsistent, and may reflect efforts by refiners to reduce year-end inventories for tax purposes.

"This lack of congruence may add a level of confusion in the near term, adding a degree of uncertainty to what is really going on," he said.

AFP

    
 

Citigroup to take US$300 million 'repositioning charge' in 4th quarter

Citigroup Inc will take a US$300 million "repositioning charge" in the fourth quarter to "resize infrastructure and capacity" throughout its businesses, Chief Financial Officer John Gerspach said on Wednesday.

PHOTO: BLOOMBERG

DEC 10, 20158:02 AM

[NEW YORK] Citigroup Inc will take a US$300 million "repositioning charge" in the fourth quarter to "resize infrastructure and capacity" throughout its businesses, Chief Financial Officer John Gerspach said on Wednesday.

Citi will also add US$300 million to US$400 million in loan reserves from the third quarter for energy loans, based on the expectation that oil prices will remain low, Gerspach told the Goldman Sachs US financial services conference.

Depressed oil prices have put several US banks under pressure because of their exposure to loans to oil companies.

Citi is due to report fourth-quarter earnings on Jan 15. "From an expense point of view, we will be taking a repositioning charge of say about US$300 million in Citicorp in the fourth quarter," Gerspach said. "That is as we continue to resize our infrastructure and our capacity to deal with a continuing low-revenue environment." Gerspach declined to comment when asked about investment banking bonuses, saying Citi would "pay competitively".

See who is talking about CITIGROUP

Last 30 days:

• 5991
• 122
• 559

30 days avg

HOT COMPANIES

Anglo American +442% messages

• Ashtead +276%
• Fresnillo +103%
• RSA Insurance +71%
• Sports Direct Intl +69%
• LSE Group +44%
• Admiral +29%
• Kingfisher +19%
• Rolls-Royce +16%
• Coca-Cola HBC +14%

• Ashtead +276%
• Fresnillo +103%
• RSA Insurance +71%
• Sports Direct Intl +69%
• LSE Group +44%
• Admiral +29%
• Kingfisher +19%
• Rolls-Royce +16%
• Coca-Cola HBC +14%

The last time Citi took a repositioning charge as large as this was in the fourth quarter of 2014, said Barclays analyst Jason Goldberg. At that time, the charge was US$655 million.

Morgan Stanley said on Tuesday it would take a US$150 million severance charge related to workforce reductions in the fourth quarter.

The investment bank is cutting 1,200 workers worldwide, a source told Reuters, as tougher capital rules and mounting competition force it to improve profitability, following one of its slowest quarters for bond trading since the 2008 crisis.

Gerspach also said Citigroup would need to issue $10 billion to $15 billion in net new debt to comply with new rules designed to help banks better weather a crisis.

Speaking at the same conference, Bank of America Chief Executive Brian Moynihan responded to a question about whether its new debt issuance under the rules would be US$15 billion, by saying the number was in the "right ballpark." Wells Fargo & Co said last month it would likely need to issue an additional US$40 billion to $60 billion of long-term debt to comply with the rules.

The rules, proposed by the Federal Reserve on Oct 30, aim to ensure that some of the biggest and most interconnected US banks have enough equity capital and long-term debt to withstand crises.

REUTERS

    
 

Yahoo's Mayer: From grocery store to Silicon Valley star

She is one of the biggest stars in Silicon Valley, but multimillionaire chief executive Marissa Mayer has her hands full trying to revive the fortunes of faded Internet pioneer Yahoo. 

PHOTO: REUTERS

DEC 10, 20157:00 AM

[SAN FRANCISCO] She is one of the biggest stars in Silicon Valley, but multimillionaire chief executive Marissa Mayer has her hands full trying to revive the fortunes of faded Internet pioneer Yahoo.

The 40-year-old, who once worked at a grocery store, is listed as the 22nd most powerful woman by Forbes magazine.

She is also among the best-paid executives, with a package worth US$42 million last year including stock options.

But Ms Mayer faces a major test with Yahoo set to spin off its core operations into a separate company that will allow investors to more clearly see its value without the distortion from its huge investment in China's Alibaba.

See who is talking about YAHOO!

Last 30 days:

• 37711
• 603
• 1761

30 days avg

HOT COMPANIES

Anglo American +442% messages

• Ashtead +276%
• Fresnillo +103%
• RSA Insurance +71%
• Sports Direct Intl +69%
• LSE Group +44%
• Admiral +29%
• Kingfisher +19%
• Rolls-Royce +16%
• Coca-Cola HBC +14%

• Ashtead +276%
• Fresnillo +103%
• RSA Insurance +71%
• Sports Direct Intl +69%
• LSE Group +44%
• Admiral +29%
• Kingfisher +19%
• Rolls-Royce +16%
• Coca-Cola HBC +14%

She is not the first CEO seeking to reinvent Yahoo, but she had initially inspired confidence with her experience as a manager at rival Google.

At Google, Ms Mayer was responsible for local and geographical products including Google Maps, Google Earth, Street View and local search for desktop and mobile.

She joined Google in 1999 as its 20th employee and led efforts for many of Google's most recognisable products, including the development of its flagship search product and homepage.

At Yahoo, where she became chief executive in 2012, she went on a buying spree that included a US$1 billion acquisition of the blogging platform Tumblr to reach a younger audience.

She coined the term MAVENS in outlining her strategy but the term is hard to grasp outside the geek world: it emphasized "mobile" products as well as "video," with "native" advertising - ads integrated into other services - and "social." These segments of the business have been growing, but Yahoo's overall performance has been uneven, leaving its investors unsettled.

Born in a small Wisconsin city, she worked at a grocery store before attending Stanford University, where she studied computer science.

While her intellectual skills qualify her as a nerd, her good looks and star quality have put her on the cover of magazines including Fortune, Vanity Fair and Vogue, which showed pictures of her in a fashion spread.

Glamour magazine named her "woman of the year" in 2009 and she has been on several lists of influential tech personalities.

Married to financier Zachary Bogue, Ms Mayer has also been under scrutiny for how she handles gender issues in the workplace.

She boosted maternity leave at Yahoo to 16 weeks but only took two for the birth of her first child in 2012 - drawing plaudits and critics.

She recently announced she was pregnant with twins and would be taking "limited time away and working throughout."

AF
P