CFC posts KD 6m in 9-month profits

KUWAIT: The Commercial Facilities Company (CFC) said yesterday that its net profits reached KD six million ($19.7 million), 12 fils per share, in first nine months of 2015, compared to KD 9.1 million same period in in 2014. Total shareholders’ equity reached KD 165.5 million in the first nine months of 2015, compared to KD 168.1 million the same period last year, CFC said in statement posted on Kuwait Stock Exchange (KSE) website. Overall assets reached KD 321 million, total liabilities amounted to KD 155. 4 million in the first nine months of 2015, compared to KD 122 million in the same period last year. The company was founded in 1977 and was listed in the KSE in 1984, with a paid-up capital of KD 53.6 million.

International oil prices remained relatively range-bound during October. On average, ICE Brent, the global benchmark crude, traded within the $48-50.0 per barrel (bbl) band for the second month in a row, while West Texas Intermediate (WTI), the US marker, settled within the $45-47/bbl range during the month. Both crudes closed the month just over a dollar higher than they started, with Brent settling at $49.5/bbl and WTI at $46.6/bbl.

Nevertheless, concerns over burgeoning crude oil supplies and surging crude and refined products stock continued to weigh heavily on oil markets in October. Despite a brief rally around the 6th of the month, when ICE Brent and NYMEX WTI hit $53.1/bbl and $49.6/bbl, respectively, on lower expectations of US output and forecasts that the oil market could rebalance in 2016, oil market fundamentals remained weak. OECD commercial oil inventories continued to swell amid higher refinery runs, reaching 2.9 billion barrels in August, according to data released by the International Energy Agency (IEA).

Crude oil stocks in particular remain at record levels, while global inventories of refined products, such as diesel, stand close to maximum storage capacity. The incentive for continued stock builds is, therefore, likely to decline, putting further pressure on crude prices. And while the onset of the autumn refinery maintenance season should see pressure on stock levels of refined products ease, lower refinery runs could see crude inventories fill up once more, compounding the bearish outlook for oil prices.

Consensus forecasts for oil prices over the next few years have been lowered, echoing the trend in the futures market. With Brent currently averaging $55.9/bbl for the year as a whole, most analysts expect the oil price to remain at the lower end of the $54-$64.0/bbl range next year before rising slowly towards the upper limit in 2017 as the demandsupply mismatch begins to unwind more significantly. Indeed, after accounting for a projected slowdown in demand growth next year and the potential arrival of additional barrels of oil from Iran once sanctions are lifted, the IEA predicts that equilibrium would be restored later than the previous forecast of 4Q2016. Informing its decision to revise its estimate of global demand