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PARIS — Oil prices will remain low at least until next year, the International Energy Agency (IEA) warned on Monday, expecting any 2017 recovery to be slow as massive oil stocks feed into the market.

"We must say that today's oil market conditions do not suggest that prices can recover sharply in the immediate future — unless, of course, there is a major geopolitical event," the IEA said in its medium-term report, which looks five years ahead.

"Only in 2017 we will finally see oil supply and demand aligned but the enormous stocks being accumulated will act as a dampener on the pace of recovery in oil prices when the market, having balanced, then starts to draw down those stocks," it added.

"While oil prices should start to rise gradually once the market begins rebalancing, the availability of resources that can be easily and quickly tapped will limit the scope of rallies," the report continued.

The IEA acknowledged that predicting the oil market "is today a task of enormous complexity", noting that experts were still grappling with the implications of a dramatic drop in the oil price from over $100 per barrel in July 2014 to around $30 today.

A year ago, analysts predicted that oil oversupply would end by late 2015, "but that view has proved very wide of the mark", it admitted.

US shale production squeezed

The IEA's view is that supply will eventually be curtailed as investment cuts prompted by low prices translate into lower output.

Spending on oil exploration and equipment is projected to drop by 17 per cent this year after a 24-per cent cut in 2015 "which would be the first time since 1986 that upstream investment has fallen for two consecutive years", the IEA noted.

The low oil price is already squeezing profits at higher-cost producers, and the IEA said it expects the production of US light tight oil also known as shale, to fall back by 600 million barrels per day (mb/d) and by a further 200 mb/d next year before a gradual recovery in oil prices pushes production up again.

Worldwide demand for oil, meanwhile, will continue to increase, but at a weaker pace amid financial market turmoil and clear signs that "almost any economy you care to look at could see its gross domestic product growth prospects downgraded".

Global annual average demand growth over the next five years is expected at 1.2 mb/d, down from a 1.6 mb/d increase seen in 2015 when demand received an initial boost from oil price falls.

Bottlenecks ahead

But while the current supply/demand mix is keeping a lid on prices, the current slashing of investment in oil producing facilities may well hit the market with bottlenecks further down the road, possibly leading to abrupt price spikes, the IEA warned.

Only Saudi Arabia and Iran have any spare production capacity left and other countries are not investing enough even to keep current production going, let alone meet demand growth over coming years.

"The risk of a sharp oil price rise towards the later part of our forecast [around 2021] arising from insufficient investment is as potentially destabilising as the sharp oil price fall has proved to be," the IEA warned.

But in the short term, the IEA said that members of the Organisation of Petroleum Exporting Countries  had shown their "determination" to maintain and expand their market share and that rising oil production from Iraq and Saudi Arabia last year would now be joined by Iran in the wake of a deal with western powers to lift sanctions.

The IEA took note of an agreement this month between Saudi Arabia and Russia, the world's top crude producers, to stick to current production if others followed suit, but offered no opinion on the likelihood of such a deal gaining traction.

Oil prices have found support from some investors believing that the agreement could lead to steps to tackle a global supply glut that has dragged prices to their lowest levels in nearly 13 years.

Dealers also said they welcomed the outlook for US shale production cuts as this would help curtail supply.

NEW YORK — Standard & Poor's (S&P) downgraded Total, Statoil and BP on Monday, saying cheap oil prices would weaken the financial strength of the three top European oil companies.

S&P said that based on its new view that the oil market would only partially recover by  2018, it expected the three companies would struggle between the demands of lowering investment expenditures and continuing to fund shareholder dividends.

The rating for Britain's BP was reduced one notch to A-, a medium investment grade level, but given a "stable" outlook meaning it would not likely be revised in the medium term.

France's Total was cut one notch to A+ and put on a "negative" outlook, suggesting another downgrade was possible in the next 6-18 months.

Norway's Statoil also fell one level to A+ and was given a "stable" outlook.

S&P indicated that all three companies were undertaking "relatively weak" measures to keep up their financial strength and faced weaker cash flow as they strain to maintain dividend payments.

"We see the decision to cut investment and increase debt to facilitate shareholder distributions as negative from a credit perspective, because the reduction in investment will affect future cash-generating assets," S&P said.

Moreover, it added: "In contrast with some US peers, these largest European players have neither actually cut declared dividends nor cut capital investment aggressively."

S&P noted that the downgrades were based on its revised outlook for crude prices, after the 75 per cent plunge over the past 18 months.

S&P expects the price of Brent crude, which has been trading below $35 a barrel, to rise to $50 a barrel only by 2018.

It said the oil companies can only partly offset price declines by cutting capital investment. 

Refining margins are also expected to fall by 25-33 per cent this year, it added.

On February 2, S&P placed negative outlooks on US oil majors Chevron and ExxonMobil based on the weaker outlook for crude prices.

AMMAN — Jordan Investment Commission (JIC) President Thabet Al Wir highlighted the Jordanian experiments in Islamic banking and halal food as a gate for cooperation with Germany to support the Kingdom's investment and economic environment. 

At a meeting with a German delegation representing the Federation of German Industries (BDI) and the German Federal Ministry of Finance, Wir described the Jordanian expertise in Islamic banking as  top at the regional and international levels.

The Kingdom is also among the first countries to accredit the Islamic banking system, he said.

The presence of many Muslim communities in Germany provides a chance for the country to benefit from the Islamic system in its banking sector, the JIC president added.

There are many Jordanian industries that follow modern, developed methods in preparing and manufacturing halal foods, he continued, noting that several relevant businesses are present in European and East Asian countries as well as the US. 

Wir and the delegates also discussed ways to enhance economic relations between Jordan and Germany according to the outcomes of the London conference, stressing the significance of applying these results to support the Jordanian economy through providing jobs for Jordanians in the first place and then for Syrians. 

The German delegates, who are currently visiting the Kingdom to discuss ways to apply the outcomes of the London conference, had a firsthand look at investment opportunities in the King Hussein Development Zone in Mafraq.

The delegates stressed the importance of enhancing economic cooperation with the Kingdom, and providing investment opportunities to both countries' businesspeople, especially in the banking and food sectors, highlighting the need to support small- and medium-sized sectors to generate new jobs.

AMMAN — Amman Chamber of Commerce (ACC) President Issa Murad on Monday demanded that the government make incentives for companies employing local workers, suggesting a reduction in social security deductions to help create more jobs.

Murad delivered his remarks during a meeting where two agreements were signed with Armoush Tourist Investments Company and Sameh Mall to train and employ 850 young people.

He said the private sector is interested to make use of graduates and their energies, especially when they have necessary skills to do their designated tasks within a friendly and innovative environment, as the fear of unemployment is affecting everybody. 

The ACC conducted practical studies that revealed education output does not match the demands of the labour market, which is one of the most significant reasons behind the increase of unemployment among new graduates, according to Murad. 

The two agreements that Murad signed with the chairmen of both companies include training young people and employing them for a year at the companies' branches, Murad said, adding that the chamber will help in supporting the process.

Signing the agreements is part of the rehabilitation programme for recruitment launched by the ACC last year in cooperation with the Ministry of Labour and the Employment-Technical and Vocational Education and Training Fund to equip new graduates with necessary experience to enter the job market.

The initiative, which cost more than JD2 million, has so far trained around 1,000 young people. 

It includes two parts: the first is theoretical, taking place at the ACC's rehabilitation and recruitment centre, and the second is practical training at the workplace where trainees are paid salaries, part of which are paid from the chamber. 

Labour Ministry Secretary General Hamadah Abu Nijmeh, who attended the signing ceremony, voiced his appreciation of the chamber's efforts in the field of offering facilitations and support to create job opportunities for Jordanians through its 46,000-strong network in Amman alone. 

Moreover, he stressed the importance of the Ministry of Labour directorate, inaugurated six months ago at the ACC premises.

Ahmad Armoush, chief executive officer (CEO) of Armoush Tourist Investments Company, stressed the importance of cooperation among service institutions and the private sector, while Khalid Rababaa, CEO of Sameh Mall, said most of the employees are Jordanians.

CAIRO — "Any rice?" says the woman, leaning into a shop in Cairo and brandishing a green smartcard that carries her family's food credits. The shopkeeper shakes his head: "Only sugar."

Behind him, more than half the shelves are empty. Rice and cooking oil are nowhere to be seen.

Tens of millions of Egyptians rely on state subsidies provided as credits on smartcards they redeem against household staples each month. But in recent weeks, imported commodities like cooking oil have been in short supply as a dollar shortage makes it harder for state importers to secure regular supplies.

Shortages persist across the capital and in cities from Alexandria in the north to Minya in the south.

"When we ask the grocer he says there's nothing but sugar. Every day he says, tomorrow, tomorrow, but we are half way through the month now and it's not resolved," said Samia Mohamed, a housewife, at a grocery in southern Cairo.

"Prices elsewhere are expensive. We don't know what to do," she added.

Affordable food is an explosive issue in Egypt, where millions live a paycheck from hunger and economic discontent has helped unseat two presidents in five years.

The dangers are not lost on President Abdul Fattah Al Sisi, whose government has sought to protect poor Egyptians from the worst effects of double-digit inflation.

The smartcards are accepted at a network of government-run supermarkets as well as 26,000 privately owned grocers and grant each family member 15 pounds ($2) of credits a week plus five loaves of bread a day from participating bakeries.

The supply ministry also oversees a network of stores and kiosks offering subsidised food outside the smartcard system.

Goods of all kinds are available at ordinary supermarkets not participating in the smartcard scheme but poor consumers would have to fork out market prices that many can ill-afford.

But even at the discount shops, stocks are low.

At a kiosk, emblazoned with the Egyptian flag and the words "together against high prices" in a historic part of Cairo, a shelf labelled "local rice, 3.25 per kilogramme" is bare.

"Oil is in short supply. The supplies of oil aren't stable," said the manager of the kiosk, which opened in December as part of a government effort to ease food inflation. "Sometimes we are short of rice, sometimes sugar... Sometimes people don't like the variety. We don't get enough."

Supply Minister Khaled Hanafi said on Thursday that stocks at state food companies were being replenished with dozens of products which would be available to smartcard-holders in March.

‘Like beggars’

Though essential foods are high on the priority list, a foreign exchange shortage has made it more difficult for Egypt's state food importers to pay promptly over the past year. Worst affected by the shortages has been cooking oil, with payment problems putting suppliers off bidding in state tenders.

Egypt's state importers have cancelled three cooking oil tenders in the last three months alone after not receiving enough offers or because prices were too high.

Traders say they now have to factor in the cost of expected delays, particularly after the government brought in measures which mean they are not paid for up to six months.

"You are talking millions of dollars here. These delays are costly," indicated one trader. "They make you feel like a beggar when you chase your money, not answering calls, not responding."

Egypt has struggled to revive its economy since the 2011 Arab Spring uprising drove away tourists and foreign investors. Foreign exchange reserves have more than halved since then, leaving Egypt with scarcely enough to cover three-months worth of imports.

Pressure has mounted on the central bank to devalue the pound but it has resisted a major adjustment for fear of stoking inflation. Instead, it has imposed strict limits on dollar deposits and transfers, making it harder to clear shipments.

A lack of clarity on rice policy has also caused confusion in the market. Egypt banned rice exports in 2008 but lifted the ban in October after a bumper harvest. It issued a rice import tender last month only to cancel it again and grocers say there is not enough rice in state stores.

Bread rations

Occasional shortages have been the norm for the past year, but supply issues were compounded in recent weeks by a change in the rules surrounding unclaimed bread rations.

Participating grocers source most of their goods from the state-run Food Industries Holding Company (FIHC) but until this month would receive cash from the supply ministry equivalent to any unclaimed bread credits. They would then use the cash to buy other goods on the open market to meet the demand.

Since February 1, they have been refused cash and been offered  goods supplied by the FIHC instead.

But grocers say the FIHC is unable to meet demand.

"The issue is not one of oil and sugar. We used to buy 100 products and now we can't find 10... More than 50 per cent of the supply stores are empty and there are no goods," indicated Majed Nadi, spokesman for the General Grocers' Syndicate.

"They expected to be able to meet all the needs but they couldn't," he said.

Hanafi said 2,000 tonnes of rice and 2,500 tonnes of oil were being supplied daily to replenish stocks in addition to goods including pasta, tea and canned tuna, which have not been in short supply.

FIHC bought 42,000 tonnes of sunflower and soy oils on Wednesday. A previous shipment was due to arrive on February 10-20.

Supply ministry spokesman Mahmoud Diab said the change was intended to reduce prices because FIHC could secure economical bulk deals that individual grocers could not.

"The idea is to bring citizens higher quality goods at lower prices," he told Reuters. "It is for the good of the people."

DUBAI — Fuel subsidy reforms by Gulf Arab states will help reduce pressure on budgets, but are not enough to offset deficits resulting from low oil prices, ratings agency Moody's said.

Savings from increased fuel prices in the six Gulf nations will average 0.5 per cent of gross domestic product (GDP), around $7 billion, this year against an estimated deficit of 12.4 per cent of GDP, it indicated.

"Recent moves to reform subsidies signal political willingness to address the damaging effect of low oil prices on budgets," said Moody's analyst Mathias Angonin.

"However, they fall short of the scale of economic and fiscal reform required to achieve budget balance," he added.

All the six Gulf Cooperation Council (GCC) states, which depend heavily on oil income, have reduced generous fuel, electricity and other subsidies to cut spending in the face of falling revenues.

The GCC groups energy-rich Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. All of them posted a budget deficit last year.

Moody's forecast that the price of oil will average $33 a barrel in 2016, way below its price of around $110 a barrel before it began to decline in mid-2014. It estimated the price to be $38 a barrel next year.

"While the GCC governments' balance sheets remain solid on a consolidated basis, we anticipate a sharp deterioration in the governments' net asset position as a consequence of the decline in oil prices," Moody's said.

The reforms will however lead to efficiency gains, reduce distortions caused by very low prices and cut domestic energy consumption, it added.

Moody's expects GCC states to take other fiscal measures such as raising corporate taxes and introducing value-added taxes in the face of a long period of low oil revenues.

Austerity measures, loan negotiations and state asset sales are all on the menu of moves deployed to counter the brutal nosedive in the oil price.

"These are bad times for oil producers and their creditors," Gabriel Sterne, head of global macro research at Oxford Economics, indicated in a note.

National budgets need to adjust further, financial buffers are inadequate and proper adjustment to the new situation may be delayed by weak governance, he warned, calling the assessment "bleak".

In Russia, which depends on oil and gas sales for half of government revenues, Economy Minister Alexei Ulyukayev warned that his country's budgetary situation was "critical", and that it was now urgent to implement a privatization programme that is expected to feature sales of stakes in state-owned companies such as oil giant Rosneft.

"It is no longer possible to wait," he said, just as Russia, a top global producer, was pumping oil at record levels to offset falling prices with increased volumes.

The government in Moscow has already admitted that tumbling oil prices will push it to slash spending as it struggles to keep the deficit to under 3 per cent of GDP. 

'A source of risk'

"Government deficits are growing strongly. And to maintain social peace and military spending, producer countries are in no position to cut public spending," said Olivier Garnier, chief economist at SocieteGenerale.

Trying to reduce spending regardless would be "a source of risk", he told AFP.

Last month, the International Monetary Fund warned that the sharp collapse in the price of oil is proving more of a drag on the global economy than a stimulus, pointing to the dire budgetary situation that oil exporting countries now find themselves in. 

There are big differences between the various oil-exporting countries, many of whom had accumulated vast dollar reserves while the going was good in the commodities markets. 

But even the world's biggest exporter, Saudi Arabia, is feeling the pain.

The kingdom reported last month that its fiscal reserves dropped to a four-year low of $611.9 billion last year, from $732 billion in 2014, as the government sought to finance a budget deficit caused by plunging oil revenues.

In December, Saudi Arabia had reported a record deficit and announced austerity measures, including cuts to fuel subsidies.

African producer Nigeria, meanwhile, boasting no such reserves, is seeking loans from the World Bank, the African Development Bank and other lenders to help cover this year's massive budget deficit, the government and bank officials said on Tuesday.

The budget plan, which includes sharply increased spending to stimulate the economy, calls for 1.8 trillion naira ($9 billion) to be covered by borrowing from multilateral organisations— which the government believes is the cheapest funding option.

The possibility for cash-strapped nations like Nigeria to get a friendly hearing from global lenders means that situation is perhaps not yet dramatic, according to LudovicSubran, chief economist at Euler Hermes.

"Today, exporters in Africa have enough foreign reserves for at least another year. The others are being helped by international institutions," he told AFP.

Limited room for manoeuvre

Maybe so. But while some countries may obtain "soft loans" to tide them over, other credit lines come with strings attached, notably austerity measures or forced asset sales — and therefore the danger of social trouble from already impoverished populations.

"The room for manoeuvre is very limited. Growth is slowing and adjustment is very costly because of austerity and the recession," Christine Rifflart, an economist with French think tank OFCE said in a recent report.

Venezuela, which is sitting on the biggest known oil reserves from which it derives 96 per cent of its foreign revenues, has been devastated by the drop in prices.

"The economic crisis in Venezuela will deepen," analysts from research group Capital Economics wrote in a recent note. "In the absence of a renewed rebound in oil prices a government debt default looks increasingly likely."

AMMAN — The industrial estate in Maan has received a Chinese investment delegation that wanted to check on incentives and investment opportunities available in the governorate, Maan Development Company (MDC) Chief Executive Officer Hussein Kreishan said Sunday.

The visit, related to processing raw material and solar energy, will achieve a quantum leap in expanding the base of investment in the industrial estate, according to Kreishan.

Speaking at a meeting with the representatives of the large-scale Chinese companies, Kreishan highlighted the competitive advantages of  Maan in terms of strategic locations, infrastructure, and financial incentives of the investment law. 

He also showcased investment opportunities in the governorate, for which the MDC conducted feasibility studies. The opportunities lie in the field of silica sand, renewable energy and construction materials, Kreishan said, adding that the delegation's visit included a tour to several factories in the industrial estate as well as the MDC headquarters.  

BERLIN — Germany doubled its arms exports last year to around 8 billion euros ($8.9 billion), government figures showed on Friday, in contradiction to Berlin's pledge to rein in the amount of weapons Europe's biggest economy sells abroad. 

The increase was driven largely by "special factors", Economy Minister Sigmar Gabriel explained when presenting the data.

The economy ministry is in charge of approving arms exports and Gabriel had promised to limit them when he took up his position at the end of 2013. 

In particular, Berlin wanted to curb exports of light weapons and track them closely once they had left the country. 

Gabrial cited big-ticket contracts for tanker airplanes to Britain and guided missiles to South Korea among the "special factors". 

The volume of exports was also inflated by a delivery of Leopard 2 tanks to Qatar, a contract approved by the previous government in 2013, the minister explained. 

If it had been up to him, "I would not have approved them," he insisted. 

Before Gabriel's Social Democrat SPD Party agreed to share power with Angela Merkel's conservative CDU Party, the CDU had been in a coalition with the liberal FDP. 

Gabriel accused the previous administration of "not applying the rules as they should have been applied". 

Overall, Gabriel insisted the government was making progress in achieving its declared goals and in 2014, the exports of light weapons had dropped sharply. 

Detailed arms exports figures for 2015 are to be released in June. 

Official data also showed that Germany clocked up its highest-ever trade surplus in 2015 as both exports and imports powered ahead to new records.

German exports jumped by 6.4 per cent to 1.196 trillion euros ($1.3 trillion) in the whole of 2015 and imports advanced by 4.2 per cent to 948 billion euros, the federal statistics office calculated.

That meant that the trade surplus, the balance between exports and imports, grew to 247.8 billion euros, its highest-ever level, from 213.6 billion euros a year earlier, the statisticians indicated. 

The trade surplus is a key gauge of an economy's comparative strength and underlines the robustness of Europe's biggest economy amid the current global economic uncertainties.

German-made goods were in strong demand all over the world last year, with exports to the European Union (EU) rising 7 per cent and exports to other countries rising 5.6 per cent, Destatis pointed out.

Within the EU, exports to the eurozone climbed by 5.9 per cent, while exports to European countries outside the single currency area grew by 8.9 per cent.

In December alone, however, both exports and imports declined by 1.6 per cent in calendar- and seasonally-adjusted terms, meaning that the trade surplus contracted slightly to 19.4 billion euros, Destatis said.

Separately, German businesses are expecting to see a further drop in exports to Russia this year to their lowest level in 10 years, even if companies continue to regard it as a market with enormous potential, a specialist trade organisation found on Friday.

German exports to Russia plummeted by 25.5 per cent last year, weighed down by the plunging ruble and the economic crisis in Russia, according to data published by the Committee on Eastern European Economic Relations. 

"Compared with the record year in 2012, German exports to Russia have fallen by nearly half in the past three years from 38 billion euros [$42 billion] to 21 billion euros," indicated Wolfgang Buechele, who heads the committee and is chief executive of industrial gases group Linde.

"And according to our estimates, exports will drop by around 10 per cent this year and fall below the 20-billion-euro mark for the first time since 2006," Buechele said.

"At the moment, Germany's foreign trade is booming, helping to offset" the difficulties in Russia, said Rainer Seele, president of the German-Russian chamber of commerce and head of the Austrian oil and gas group, OMV. 

But that might not always be the case, as the outlook for a number of emerging economies clouds over, he warned. 

German businesses have been highly critical with regard to the economic sanctions slapped on Russia by the EU. But they believe the wind will change and the outlook for the country will brighten this year. 

"Our Russian partners insist that cooperation with Europe has a different quality and reliability than with other partners," Seele added. 

Buechele and Seele were part of a delegation of German business leaders who met Russian Prime Minister Dmitry Medvedev on the sidelines of the Munich Security Conference this month.

At that conference, Medvedev said tensions between Russia and the West had sent the world into a "new Cold War". 

But the fact that Medvedev attended the Munich conference alone was a good sign, Buechele suggested, saying Russia was "holding out a hand" to Europe. 

"Everywhere in Russia, we seeing and hearing the same signal: we're re-opening ourselves again to Europe, to cooperation with German companies in particular," said Seele. 

"The German economy is ready and continues to see enormous potential" in Russia, he added. 

TUNIS — A Jordanian delegation held several meetings with Tunisian officials last week, during which they discussed challenges facing the flow of Jordanian products, delays at Tunisian harbours and difficulties to register cosmetics.

They also looked at establishing joint investment projects in the medical equipment and other industries, in addition to enhancing investment partnerships in the tourism sector. 

The delegation, headed by Amman Chamber of Commerce President Issa Murad, tackled ways to benefit from agreements signed between the two countries, exchange expertise in the fields of industrial estates and free zones, and increase exports.

Murad said Tunisian President Beji Caid Essebsi's visit to the Kingdom in October encouraged the Jordanian private sector to penetrate the Tunisian market and search for new markets as alternatives for Jordan's traditional markets.

He added that the Kingdom seeks to benefit from the Tunisian expertise in reaching European and African markets, especially due to the closure of traditional markets because of the security and political events in the region.

Jordan European Business Association's (JEBA) board of directors on Saturday discussed with Confederation of Tunisian Citizen Enterprises' (CONECT) executive office means to enhance bilateral cooperation and drawing up a joint programme to help Jordan penetrate European markets.

JEBA President Jamal Fariz commended the Jordanian-Tunisian relations, stressing the importance for these ties to reflect on the commercial and investment sectors. 

Transportation was among the biggest obstacles for exports between the two countries, which requires considering the establishment of a maritime route and increasing cooperation in air transport, calling for enhancing collaboration in the tourist sector. 

CONECT President Tareq Sharif said there is great potential to enhance bilateral economic cooperation and establish partnerships between both countries' private sectors to contribute to boosting commercial exchange.