News Archive


Micro-distillers craft limited space in crowded market


LONDON Small, independent distillers are popping up and taking market share but liquor giants like Diageo (DGE.L) and Pernod Ricard (PERP.PA) say barriers to entry and the range of spirits already available will limit their impact.

Mindful of the way big brewers were caught out by the craft beer trend, the world’s largest spirits makers are launching lines such as Orphan Barrel and Our/Vodka that tout small batch credentials and refining their marketing of big brands.

They are acting while “craft” spirits like Sipsmith gin and Hudson whiskey are still relatively niche products.

“The U.S. spirits market faces a growing threat of substitution,” analysts at Credit Suisse said. “A market that had been characterized by large-scale national brands is becoming increasingly focused on local, authentic, small-batch production.”

After compound annual growth of about 50 percent since 2010, craft distillers — or those producing under 100,000 cases per year — now account for about 2 percent of the U.S. market, the largest and most profitable in the world.

It remains to be seen whether it will ever get as big as craft beer, which makes up 11 percent of the volume and 20 percent of the value of the U.S. market.

“I don’t think the response to craft per se is any big brand or little brand,” said Michael Ward, Diageo’s global head of innovation. “I don’t think it has anything to do with the size of a brand.”

Diageo, which has posted flat sales for two years, wants to reignite growth with a host of new labels including Blade and Bow and Orphan Barrel, whose marketing relies heavily on their links to the mothballed Stitzel-Weller facility in Kentucky, which was opened in 1935.

“Consumers are demanding a better understanding of what’s behind the product and our job is to figure out how to tell that story better than we’ve done,” Ward added.

Pernod, which took a 404 million euro ($449 million) write-down on its Absolut vodka after its U.S. sales fell, says it needs to better differentiate its marketing and may take a “craft-targeted approach” on some brands.

Craft “can be an opportunity or a threat — a threat if we are not adapting our marketing platforms,” said Gilles Bogaert, Pernod’s chief financial officer. “I think today net net, we see it as an opportunity.”

Pernod is playing up the artisanal nature of single malt Scotch with launches like the Glenlivet 50-year-old Winchester Collection. It also launched Our/Vodka, which it says is partly distilled, blended and hand bottled in microdistilleries.

SMALL AND GROWING

The number of U.S. craft distilleries jumped from about 200 in 2011 to about 600 in 2014, lifting sales volume from about 700,000 cases in 2010 to about 3.5 million last year.

Craft distillers’ sales are nearing $450 million a year, according to the Distilled Spirits Council of the United States.

If current trends continue, Credit Suisse estimates craft could reach a 12 percent share over the next decade, helped by a consolidated distribution system that is allocating more resources to craft and the potential for proposed tax reform.

The rise of craft may cause greater pain for Diageo than Pernod, Credit Suisse says, since Diageo is more reliant on the United States, has put through a lot of price increases in recent years and has seen less consistent growth in whiskey, which has more craft credentials.

Yet a number of factors could cap the rise of craft spirits.

Distilling is more complex and capital intense than brewing as whiskies, rums and many tequilas require years of aging.

“Starting up a craft distillery is a very different cash flow exercise than starting up a craft brewery,” said Diageo’s Ward.

For gin, which can be made in one day, craft brands make up about half the “super-premium” market in Britain, according to Bernstein Research, but only 5 percent of gin overall. Because craft players lack the scale benefits of larger rivals, their prices are often higher.

“In vodka and gin, the barriers to entry depend entirely on how you want to do something,” said Zoe Zambakides, head of marketing for London micro-distillery Sipsmith, which just hired its third distiller as it boosts output which she said is as much in a year as big brands make in a day.

The fact that there are already so many high-quality drinks at different price points and taste profiles means there is no obvious gap in the market like there was for beer 15 years ago, when light, easy-drinking, mass market lagers dominated.

What is more, Bernstein Research said craft beer was arguably ignored by big brewers, with leader Anheuser-Busch InBev (ABI.BR) only really ramping up its presence in the last 18 months.

“The large spirits manufacturers already offer premium niche products that compete head on with craft and have perceived heritage and authenticity,” Bernstein said.

(Editing by Keith Weir)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/qN3eEit5B_c/story01.htm

Oil slips along with equities after U.S. jobs data


NEW YORK Crude futures fell about 2 percent on Friday as traders paid little heed to a drop in the number of U.S. rigs drilling for oil and focused instead on a supply glut and declining stock prices on Wall Street.

Trading volumes in crude were lighter than on Thursday, with players appearing hesitant to put on big positions ahead of the U.S. Labor Day holiday weekend.

“I get the feeling the longs do not want to wait out the three-day weekend,” said Tariq Zahir, a trader in crude oil spreads at Tyche Capital Advisors in Laurel Hollow, New York.

Despite the day’s drop, crude prices notched a second straight weekly gain, helped by a huge rally at the start of the week. Brent, the global benchmark, had its largest weekly advance since April.

Brent slid $1.15, or 2.2 percent, to $49.53 a barrel by 2:40 p.m. EDT (1840 GMT). It was up 9 percent on the week.

U.S. crude settled down 70 cents, or 1.5 percent, at $46.05. It was up 1.7 percent on the week, after last week’s near 12 percent gain, the biggest since 2011.

Oil turned weaker as the market shadowed moves in equities after a U.S. jobs report for August proved to be neither good nor bad enough to help the U.S. Federal Reserve decide on a potential rate hike.

The oil rig count issued by oil services firm Baker Hughes showed the number of U.S. rigs drilling for oil fell by 13 this week. Coming after six consecutive weeks of rises in the rig count, the data should have been positive, as it indicated less drilling activity in the future, and, possibly, less crude production.

Traders however seemed more concerned about the immediate glut in supplies, with U.S. data this week showing a big stockpile build.

“Clearly the precipitous drop in oil prices has hit capital expenditures for new drilling in the U.S.,” said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

But with crude prices remaining at relatively low levels, the market is “likely going to see further declines, albeit minor given how much they have already come down,” he added.

Oil prices have been a wild ride over the past two weeks. U.S. crude plunged to a 6-1/2-year low of $37.75 early last week, then climbed almost 28 percent over three trading sessions into Monday before giving back some gains.

(Additional reporting by Karolin Schaps in London and Keith Wallis in Singapore; editing by Marguerita Choy and Tom Brown)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/z2nB6e2vOMc/story01.htm

Japanese banks among bidders for GE’s local finance unit: sources


Japanese banks are among bidders for General Electric Co’s (GE.N) local commercial lending and leasing operation, sources told Reuters on Friday.

Orix Corp (8591.T) and the leasing units of Sumitomo Mitsui Financial Group Inc (8316.T), Mitsubishi UFJ Financial Group Inc (8306.T) and Sumitomo Mitsui Trust Holdings Inc (8309.T) are among the bidders, the sources said.

The Wall Street Journal, which first reported the news, said the finance unit’s assets are valued at about $5 billion. (on.wsj.com/1i0Aus7)

A spokesman for Sumitomo Mitsui Financial Group declined to comment. Officials at Orix, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Trust Holdings were not available for comment.

GE Capital spokeswoman Susan Bishop confirmed the Japanese unit was up for sale, but declined to comment on the bidders.

The sale is part of GE’s plan, unveiled in April, to divest about $200 billion in GE Capital assets as the conglomerate moves away from finance to focus on manufacturing.

GE had set a Sept. 4 deadline for the first round of bids for the Japanese unit, hoping to close the deal by the end of November, Reuters reported on July 27.

Last month, GE agreed to sell GE Capital Bank’s U.S. online deposits worth $16 billion to Goldman Sachs Group Inc (GS.N).

In the same month, GE also sold its U.S. healthcare finance unit to credit card lender Capital One Financial Corp (COF.N) for about $9 billion.

(Reporting by Taiga Uranaka in Tokyo and Arunima Banerjee in Bengaluru; Editing by Savio D’Souza)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/eYeys7hDLC0/story01.htm

Fed’s Lacker says will go into September policy meeting ‘with an open mind’


RICHMOND, Va. The head of the Richmond Federal Reserve said on Friday he would go into the Sept. 16-17 Fed policy meeting with an open mind over whether to raise interest rates this month.

“I’m always open to listening to my colleagues in the meeting,” Richmond Fed President Jeffrey Lacker, who had earlier in the day advocated for hiking interest rates soon, told reporters. “Otherwise we can just do these things by notation vote. And so I’m going in with an open mind.”


(Reporting by Jason Lange; Editing by Chizu Nomiyama)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/uA-V7eE1EcU/story01.htm

Falling knife or screaming buy? Glencore ticks both boxes


LONDON What’s Glencore worth? Getting a straight answer to this question depends as much on risk appetite as it does a shrewd analysis of the bombed-out commodities sector.

There are plenty of obvious risks ahead for Glencore shareholders: the miner and commodities trader is exposed to a brutal sell-off in raw materials, an emerging-markets slowdown and a poor credit outlook – courtesy of a Standard Poor’s outlook cut – that may threaten its dividend policy.

However, some bargain hunters see value in the stock, which surged 6.6 percent on Thursday alone after slumping more than 50 percent since early May on concerns about a slowdown in economic growth in China, the world’s top metals consumer.

The rally came despite SP cutting its outlook for Glencore to “negative” from “stable” after slashing its forecasts for metals, saying continued weakness in commodity prices due to a challenging outlook in China may put pressure on Glencore’s operations, credit measures and free cash flow.

“The possibility of Glencore cutting its dividend is largely priced in. It has been a disastrous period, but the contrarian in me suggests that it’s time to buy bombed-out commodity stocks like Glencore,” David Battersby, investment manager at Redmayne-Bentley, said.

“We are invested in Glencore and are actively looking to increase our exposure to the sector.”

Thomson Reuters data shows Glencore trades at 7.3 times its 12-month forward earnings, against 12.7 times for the STOXX Europe 600 Basic Resources Index. Its dividend yield is about 9 percent, against an average of 4 percent for its peers.

But some fund managers remain cautious and said Glencore’s shares could become relatively expensive again due to its poor earnings outlook. Analysts’ forecasts for Glencore’s earnings per share (EPS) have been falling, down 20 percent in just one month, which in turn could lift its price-to-earnings ratio.

Glencore reported last month a 29 percent slump in first-half earnings and said tough market conditions, especially for aluminum and nickel, were hurting the business even though it had previously said the trading division would meet earnings targets whatever happened to commodity prices.

“Investors should avoid their exposure to commodity players like Glencore. The P/E ratios might dramatically change in the next guidance by analysts and the stock may look expensive again. Dividends are also unlikely to be maintained,” Lorne Baring, managing director of B Capital Wealth Management, said.

Baring said he was avoiding commodity-heavy Britain’s FTSE 100 index and instead focusing on companies in Germany’s DAX and Switzerland’s benchmark index, besides investing in commercial real estates.

BLEAK CREDIT OUTLOOK

There were many in the market who said that SP’s downgrade raised credit risks for the company and they would wait for some stabilization in Glencore’s share price and more clarity about its dividend policy and capex plans before jumping back in.

“The underlying cost of capital for big companies like Glencore is really going to start to bite as commodity prices fall, and their ability to raise money is made a little bit more difficult,” Jonathan Roy, advisory investment manager at Charles Hanover Investments, said, adding he was positive on financials instead due to the ECB’s bond-buying operations.

JPMorgan Cazenove analysts said Glencore was still over-leveraged at about 3.5 times its ND/EBITDA (net debt to earnings before interest, tax, depreciation and amortization) and its measures to mitigate credit risk could include a cut to its $2.3 billion dividend, a $4-$5 billion reduction in working capital and deeper capex cuts.

According to Thomson Reuters data, Glencore’s debt to equity ratio is currently at nearly 110 percent, against 54 percent for Rio Tinto and 39 percent for Antofagasta.

“The market appears to be penalizing Glencore for its geared balance sheet – the prospect of a significant recapitalization will weigh down on the share price and the sector,” John Meyer, analyst at mining brokerage SP Angel, said.

(Additional reporting by Kit Rees; Editing by Lionel Laurent and David Evans)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/24aW5wIg0es/story01.htm

G20 weighs Fed hike, Chinese turmoil, but unlikely to rock boat


ANKARA World financial leaders will agree to calibrate and communicate monetary policy carefully to avoid triggering capital flight, but will not call an expected U.S. rate rise a risk to growth, a draft communique showed on Friday.

Many emerging market economies are concerned that when the U.S. Federal Reserve raises borrowing costs, investors will withdraw from other markets and buy dollar assets, weakening other currencies and creating turbulence as capital flees.

Officials from emerging markets wanted the communique from finance ministers and central bank governors of the Group of 20 biggest economies, meeting in Turkey, to say that a U.S. rate rise now would be a risk to growth.

But the draft avoids such wording.

“We note that in line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies,” the draft communique, seen by Reuters, said.

“We will carefully calibrate and clearly communicate our actions to minimize negative spillovers, mitigate uncertainty and promote transparency,” said the draft, which may yet change before it is finally agreed on Saturday.

An earlier version of the text said policy tightening in developed economies “may remain one of the main sources of uncertainty in financial markets”.

“In one of the wild formulations it said that this was the biggest threat to the world economy. This was killed immediately and forever,” a Russian source said earlier.

The text welcomed strengthening activity in some economies but said that global growth fell short of expectations, although it expressed confidence a recovery would gain speed.

It also indirectly addressed Chinese moves that weakened its yuan currency in August, in a sign these were not seen as a competitive devaluation to prop up Chinese exports. G20 members reiterated their commitment to exchange rate flexibility and would “refrain from competitive devaluations and resist all forms of protectionism,” it said.

Reinforcing that message, U.S. Treasury Secretary Jack Lew told Chinese Finance Minister Lou Jiwei that it was important that China let the yuan move up as well as down, and avoid any move to lower its value to gain a competitive edge in global trade, a U.S. official said.

China told the group it was committed to continuing structural reforms and to supporting economic growth, Europe’s Economic Commissioner Pierre Moscovici told reporters after the meeting.

Slower growth in China and rising market volatility have boosted the risks to the global economy, the International Monetary Fund warned ahead of the G20 meeting, citing a mix of potential dangers such as depreciating emerging market currencies and tumbling commodity prices.

But the G20 had been seen as unlikely to come up with any concrete new measures to address the spillover from instability in the world’s second-largest economy, or to call directly on Beijing to address structural issues such as rising bad debts.

EASY MONEY

Luxembourg Finance Minister Pierre Gramegna, whose country holds the rotating presidency of the European Union, shrugged off the prospect of U.S. interest rate hikes.

“We cannot live all the time on easy money … One has to be realistic that at one point in time the curve of interest rates will have to change,” he told Reuters.

Bank of Japan Governor Haruhiko Kuroda said any Fed rate rise would be a positive sign for the global economy, despite the unease in some emerging markets that such moves could cause capital outflows and currency volatility.

“If the U.S. were to raise rates, that would speak to the underlying firmness and growth in the U.S. economy, and that would actually be a plus for the global economy,” he said.

One specific idea being examined at the Ankara meetings is a proposal from a group of financial stability experts to adopt a two-stage approach for introducing Total Loss Absorption Capacity (TLAC) buffers for big banks, a G20 source said.

The buffer is a new layer of debt big banks like Goldman Sachs (GS.N) and Deutsche Bank AG DBGKn.DE must issue to write down in a crisis and bolster their capital.

The proposal would introduce a buffer of 16 percent of a bank’s risk-weighted assets from 2019 and 20 percent from 2022, the source said.

The United States had pushed for 20 percent, while some in Europe had been arguing for 16 percent on the grounds that their banks were still recapitalizing after the financial crisis.

The draft pencilled in that a deal should be ready for the endorsement of G20 leaders at their summit in southern Turkey in November, but some countries were concerned there would not be enough time to reach a final agreement by then.

There was no clear pronouncement on China’s desire to have the yuan included in the International Monetary Fund’s Special Drawing Rights basket of currencies, but the draft said G20 finance chiefs expected progress in November, when the IMF has a board meeting on the issue.

“China has moved in the direction in currency and monetary policy … that is necessary if they want to achieve the goal of getting China into the IMF currency basket,” German Finance Minister Wolfgang Schaeuble told reporters, welcoming Beijing’s near 2 percent yuan devaluation last month.

China is keen for the symbolic boost it would get from the yuan’s inclusion.

Bundesbank chief Jens Weidmann said he is open to discussion on including the yuan in the IMF basket, and said China’s recent market upheavals should not pose a lasting danger to the global economy.

“The currency basket should in principle reflect relative global economic strengths,” he told Reuters, but added China must fulfill the conditions for inclusion.

One delegate said it was possible that the likely failure of the U.S. Congress to approve an IMF quota reform that would give China and other emerging markets more say could work in Beijing’s favor on the SDR issue.

The reasoning goes that benefiting the leading emerging economy, China, could help offset the perennial failure to boost emerging market quotas.

However, IMF members will also be examining whether China’s heavy intervention in the yuan market was befitting of a freely convertible reserve currency, the delegate said.

One option being floated was the idea of giving China a more limited share of the SDR basket at first until its convertibility and market orientation improved.

(Additional reporting by Gernot Heller, Dasha Afanasieva and David Dolan in Ankara; Timothy Ahmann; Writing by Nick Tattersall; Editing by Jeremy Gaunt/Ruth Pitchford)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/LicNE1zrBgY/story01.htm

No BOJ easing needed in October if inflation expectations anchored: IMF


TOKYO The Bank of Japan does not need to expand monetary policy in October even if it cuts its growth and price forecasts, as long as inflation expectations are well anchored, the IMF’s mission chief for Japan said on Friday.

Kalpana Kochhar, who is also deputy director of the International Monetary Fund’s Asia and Pacific Department, said there was scope for China to expand the yuan’s CNY=CFXS trading band further.

“What Chinese authorities are doing is what the IMF has recommended for a long time, which is to allow markets to determine the exchange rate,” she said on Beijing’s decision last month to devalue its currency.

“One benefit is that loosening the (yuan’s) link to the dollar gives Chinese authorities some independence to conduct their own monetary policy,” she told Reuters.

Kochhar said there was a good chance the IMF would cut Japan’s economic growth forecasts for 2015 and 2016 in its next World Economic Outlook report as China’s slowdown and sluggish Asian demand weigh on exports.

“So far the recovery in Japan this year has been frankly disappointing and bumpy,” she said, adding that wage gains have been particularly weak despite a tightening labor market.

NO ‘CURRENCY WAR’

Japan’s economy contracted in April-June due to weak consumption and exports and analysts expect only a modest rebound in the current quarter, keeping the BOJ under pressure to further ease monetary policy.

The BOJ is likely to offer a bleaker view on overseas economies next week and may revise down its assessment on exports, sources say.

Some investors are betting the BOJ will ease at the end of October, when it is expected to lower its upbeat economic and price forecasts in a semi-annual review of its long-term projections.

But Kochhar said the BOJ does not need to respond to temporary weakness in the economy and instead should focus on inflation expectations – which have risen moderately – in deciding whether to deploy additional stimulus.

“The BOJ basically looks at inflation expectations and the output gap. Even if we were to lower our forecast, we see the output gap closing,” she said.

“As long as there’s not a very sharp decline in either, one could say (the BOJ is) on the right path.”

Kochhar stressed that the BOJ’s monetary efforts must be accompanied by government efforts to raise wages and deregulate the economy, in order for a sustained recovery.

She shrugged off the view China’s devaluation could unleash a rush among central banks to depreciate their currencies with monetary easing, including by the BOJ.

“So far, the BOJ has responded appropriately (to market volatility). When there is market volatility … the best response is to let the exchange rate move,” she said.

“Exchange rate is not a target and has not been a target for the BOJ.”

(Additional reporting by Takashi Umekawa and Tetsushi Kajimoto; Editing by Chris Gallagher and Jacqueline Wong)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/brJ-E60SMSc/story01.htm

No BOJ easing needed in Oct if inflation expectations anchored: IMF


TOKYO The Bank of Japan does not need to expand monetary policy in October even if it cuts its growth and price forecasts, as long as inflation expectations are well anchored, the IMF’s mission chief for Japan said on Friday.

Kalpana Kochhar, who is also deputy director of the International Monetary Fund’s Asia and Pacific Department, said there was scope for China to expand the yuan’s CNY=CFXS trading band further.

“What Chinese authorities are doing is what the IMF has recommended for a long time, which is to allow markets to determine the exchange rate,” she said on Beijing’s decision last month to devalue its currency.

“One benefit is that loosening the (yuan’s) link to the dollar gives Chinese authorities some independence to conduct their own monetary policy,” she told Reuters.

Kochhar said there was a good chance the IMF would cut Japan’s economic growth forecasts for 2015 and 2016 in its next World Economic Outlook report as China’s slowdown and sluggish Asian demand weigh on exports.

“So far the recovery in Japan this year has been frankly disappointing and bumpy,” she said, adding that wage gains have been particularly weak despite a tightening labor market.

NO ‘CURRENCY WAR’

Japan’s economy contracted in April-June due to weak consumption and exports and analysts expect only a modest rebound in the current quarter, keeping the BOJ under pressure to further ease monetary policy.

Some investors are betting the BOJ will ease at the end of October, when it is expected to lower its upbeat economic and price forecasts in a semi-annual review of its long-term projections.

But Kochhar said the BOJ does not need to respond to temporary weakness in the economy and instead should focus on inflation expectations – which have risen moderately – in deciding whether to deploy additional stimulus.

“The BOJ basically looks at inflation expectations and the output gap. Even if we were to lower our forecast, we see the output gap closing,” she said.

“As long as there’s not a very sharp decline in either, one could say (the BOJ is) on the right path.”

Kochhar stressed that the BOJ’s monetary efforts must be accompanied by government efforts to raise wages and deregulate the economy, in order for a sustained recovery.

She shrugged off the view China’s devaluation could unleash a rush among central banks to depreciate their currencies with monetary easing, including by the BOJ.

“So far, the BOJ has responded appropriately (to market volatility). When there is market volatility … the best response is to let the exchange rate move,” she said.

“Exchange rate is not a target and has not been a target for the BOJ.”

(Additional reporting by Takashi Umekawa and Tetsushi Kajimoto; Editing by Chris Gallagher and Jacqueline Wong)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/brJ-E60SMSc/story01.htm

Oil prices dip on caution ahead of U.S. jobs data


SINGAPORE Oil prices fell almost 1.5 percent on Friday, as investors turned cautious ahead of U.S. jobs data that is expected to play into the Federal Reserve’s decision on the timing of any U.S. rate hike.

Oil stuck to a narrow range and trading was thin with Chinese markets closed a second day for a holiday to commemorate the end of World War Two.

“There’s been a little bit of up and down and range-bound movement, which has all the hallmarks of a market marking time,” said Ben Le Brun, market analyst at Sydney’s OptionsXpress.

Brent crude for October delivery LCOc1 fell 75 cents to $49.93 a barrel as of 0654 GMT, after ending the previous session 18 cents higher. Brent rose as high as $50.87 a barrel earlier in the session on Friday.

U.S. crude for October delivery CLc1, also known as West Texas Intermediate, was down 67 cents at $46.08 a barrel, off the day’s high of $46.85. It settled up 50 cents on Thursday.

“If non-farm payrolls turn out better, oil prices could increase as there would be more bullishness on the U.S. economy,” said Phillips Futures in a note on Friday.

A weak payroll figure could push prices down, causing the WTI and Brent benchmarks to test support at $44.92 and $49.69, respectively, the note added.

U.S. policymakers are likely to use the August jobs data, due for release at 1230 GMT, as part of their assessment on whether to hike rates this year at the next meeting of the U.S. Federal Reserve federal open market committee on Sept. 16-17.

A strong dollar remained a “clear and present danger” for the oil markets, Le Brun said, as it makes commodities priced in the greenback more expensive for holders of other currencies.

Investors are also keeping an eye on U.S. oil rig data due later on Friday for clues on supply. Any drop in rig numbers could bolster oil’s price outlook.

Barclays on Friday followed BNP Paribas and cut its Brent price forecast to $52 for the second half of this year, and by $5 to $63 in 2016.

BNP Paribas cut its Brent price forecasts on Thursday to $56 per barrel from $62 for 2015 and to $62 from $76 for 2016. For WTI, it lowered 2015 outlook to $51 per barrel from $55 and its 2016 forecast to $56 from $70.

Rosneft Chief Executive Igor Sechin on Friday said that Russia can increase oil production up to 700 million tonnes per year (14 million barrels per day) and export 300 billion cubic meters of gas to China a year.

(Reporting by Keith Wallis; Editing by Himani Sarkar and Subhranshu Sahu)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/z2nB6e2vOMc/story01.htm