Oil hits highest level in 2 years as Saudi Arabia's purge continues

• Will Martin
 

• 9h
• 1,853

Saudi billionaire Prince AlWaleed bin Talal looks on during a news briefing in Manama. AlWaleed is one of the men detained in the purge. Thomson Reuters

• Brent oil price jumps to its highest level in over two years on Monday morning.
• Jump comes amid ongoing purge in Saudi Arabia, the world's second largest oil producer in terms of barrels per day.
• Saudi Arabia's state oil company, Aramco, is set to list on the stock market next year.

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LONDON — Oil prices have jumped to their highest levels in over two years on Monday morning as Saudi Arabia purges ministers and businessmen on the grounds of anti-corruption, sparking concerns about oil production in the country and driving up prices.

Dozens of people have been detained in the crackdown, which has consolidated Crown Prince Mohammed bin Salman’s power. Billionaire Prince Alwaleed bin Talal, Saudi Arabia's best-known international investor, is also being held, officials said at the weekend.

The crackdown comes as plans for Saudi Arabia's economic reform programme accelerate, with the jewel in the crown — the public listing of state oil company Saudi Aramco — fast approaching.

As the world's second largest producer of oil, and the de facto head of the oil cartel OPEC, any possible disruption to production in the Kingdom would likely have a huge impact on the global balance of supply and demand for the commodity.

"In the early trading hours, Brent reached a high of $62.44, a level last seen in July 2015, and represents a 40.8% surge from June’s lows," Hussein Sayed, Chief Market Strategist at FXTM said in an email.

"There’s no doubt that OPEC and co. have been a major influencer of the most recent rally, but oil traders have a new political risk to consider, in the coming days and weeks. The anti-corruption crackdown in Saudi Arabia resulting in the arrest of 11 princes, and dozens of senior officials, led many traders to question how oil prices will be affected." 

Here's the chart of the rise of Brent crude — the international oil benchmark — in recent days (note oil's peak on Monday morning):

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Get the latest Oil WTI price here.

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Uber might make more money this year selling real estate in Oakland than actually selling rides

• April Glaser, Slate

• 16h
• 3,767

FILE PHOTO: An Uber sign is seen in a car in New York Thomson Reuters

• Uber is reportedly selling its 380,000-square foot building to the CIM Group for $220 million.
• Uber isn't profitable. In August of this year the company shared that it had lost $645 million in its second quarter of 2017.
• Selling the empty real estate in Oakland may be the Bay Area startup unicorn equivalent of searching beneath couch cushions for loose change.

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Uber looks like it's on track to make more money selling a building it owns in Oakland, California, than it has selling rides over the last 10 months.

In 2015, Uber bought the old Sears building in downtown Oakland with the intention of moving 3,000 of its employees to an expanded headquarters in the smaller, less–filthy-rich city just across the Bay from San Francisco, which the company currently calls home.

That never happened. And now Uber is selling its 380,000-square foot building to the CIM Group, a Los Angeles–based real estate investment firm, for $220 million, according to a report from the Registry, a website that covers Bay Area real estate deals. Uber bought the building in 2015 for $123.5 million, but after never moving in as planned, the company announced in August that it was considering putting the building up for sale.

Uber isn't profitable. In August of this year the company shared that it had lost $645 million in its second quarter of 2017, which was actually a decrease from the $708 million it lost in the first quarter. Uber booked around $20 billion in rides in 2016 and, excluding its China subsidiary, which it sold in July last year, the company clocked in $6.5 billion in revenue.

Still, Uber ultimately lost about $2.8 billion that year. (The company subsidizes rides.) All of which means that the roughly $96 million the company is pocketing off its Oakland property appears to be a far better return on investment than its main business, at least in the very short term.

To be clear, just because Uber is hemorrhaging money doesn't mean it won't one day turn a substantial profit. It remains, for one thing, in expansion mode. Amazon, after all, didn't register meaningful profits for two decades and now the e-commerce empire is one of the most valuable companies in the world.

Uber's investors don't seem to be too worried about its losses. In May, Jason Calacanis, an early Uber investor, congratulated the company for growing its sales while narrowing losses — again, in a quarter in which it lost more than half a billion dollars.

Uber CEO Travis Kalanick, addresses a gathering at an event in New Delhi, India, December 16, 2016. REUTERS/Adnan Abidi

The reason Uber gave for leaving Oakland was that the company was looking to "strengthen our financial position," which is probably a good idea considering the hell ride the company has been on for the past 12 months. That turbulence included forcing out its pugnacious founder Travis Kalanick as CEO, explosive allegations from a former Uber engineer Susan Fowler detailing a culture of widespread sexism and sexual harassment across the company, and a lawsuit from Google's parent company Alphabet that could cost Uber more than $2 billion.

Selling your empty real estate in Oakland may be the Bay Area startup unicorn equivalent of searching beneath your couch cushions for loose change. And Uber needs a lot of change right now.

While losing Uber might seem like a blow to any city eager to bring in new jobs and revitalize the economy, especially as more than 200 cities across the country recently scrambled to courtAmazon's new headquarters, at least some residents in Oakland are embracing the company's reversal with a sigh of relief. Uber's move to Oakland, some feared, would contribute to rising housing prices, gentrification, and displacement throughout the city.

"I've seen what they've done to Market Street in the city," Oakland resident Nicky Bourque in told the East Bay Times back when Uber first announced plans to sell its real estate in August, referring to the impact of the tech boom on San Francisco, just across the Bay. "It's become a lot less friendly."

Yet Uber isn't totally out of Oakland. For one, the ride hail company continues to operate in there, and second, the company reportedly plans to lease back a portion of the office space it's selling.

Read the original article on Slate. Copyright 2017. Follow Slate on Twitter.

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