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LONDON — Oil prices fell towards $57 a barrel on Wednesday after the largest weekly build in US crude inventories since 2001 and as Saudi Arabia reported record output in March.

The US Energy Information Administration (EIA) reported that US stocks of crude oil rose in the week to April 3 by 10.9 million barrels — the largest weekly build since March 2001 — to a record 482.39 million barrels.

A Reuters poll of analysts had forecast a build of 3.4 million barrels.

"The report is very bearish with the large crude oil inventory build and the somewhat surprising rise in gasoline inventories," said John Kilduff, partner at Again Capital LLC. in New York.

Brent May crude was down $2.06 at $57.04 a barrel by 1444 GMT and US May crude dropped $2.34 to $51.64 a barrel.

Both benchmarks posted strong gains in the past two sessions but are still down about 50 per cent since June last year.

Adding to the global oil supply, Saudi oil minister Ali Al Naimi said late on Tuesday that Saudi output would likely remain around 10 million barrels per day (bpd) after posting a record high of 10.3 million bpd in March.

Naimi also said the kingdom stood ready to "improve" prices but only if producers outside the Organisation of the Petroleum Exporting Countries (OPEC) joined the effort.

Iraq and Libya also increased their output for March, further adding to OPEC production, which came to about 31.5 million bpd last month, according to analyst Olivier Jakob at Swiss-based Petromatrix.

"With such a level of OPEC production it will be difficult to escape large stock-builds throughout the year," he said in a note.

Iranian oil officials are in Beijing this week to discuss oil sales and Chinese investments in Iran, just days after Tehran and world powers reached a framework nuclear deal.

Still, any significant increase in Iranian oil exports is unlikely until 2016, analysts have said.

Separately, Libya's OPEC governor said OPEC should change course and cut oil supply by 800,000bpd or more to prevent an expected return of Iranian exports from weighing on prices.

The comments underline how the halving of oil prices from $115 a barrel in June on global oversupply is hurting OPEC's less wealthy members outside the Gulf and suggests the 12-nation group remains divided over the impact of its 2014 policy shift to defend market share, not prices.

"OPEC members, as a unit, need to re-evaluate their strategies," Samir Kamal, Libya's OPEC governor and head of planning at the North African country's oil ministry, told Reuters by email.

They "need to reach an agreement to bring down the production levels by at least
800,000bpd, especially now that an agreement has been reached with Iran which is expected to increase its production", he said.

A framework deal announced last week to curb Iran's nuclear work could eventually allow Tehran to boost oil exports, which have been cut by almost half since 2012 due to Western sanctions.

Four years after the ousting of leader Muammar Qadhafi, Libya is struggling with two rival governments. Kamal represents Libya on OPEC's board of governors, a body that influences but does not decide OPEC policy.

When the producer group last met in November, Libya was among member countries calling for a cut in production.

OPEC meets again on June 5 to set policy. Although they did not oppose the group's no-cut decision of last year, other non-Gulf OPEC members such as Venezuela and Iran have expressed misgivings about it and sought supply reductions.

A group of 18 African oil producers, many of which are not OPEC members, is lobbying for output curbs to boost prices that it says have fallen to levels that threaten to spark social unrest.

But without support from Saudi Arabia and the other Gulf OPEC members, a rethink is unlikely. Saudi Arabia has increased production to a record high and Kuwait has said OPEC will not change policy at the June meeting.

NEW YORK — Boeing is fighting tough efforts by rival Airbus to score big gains in the market for long-haul jets, a segment of the massive aircraft market that the US giant has dominated.

Neck-and-neck with Boeing in sales of single-aisle, 150-200 passenger jets, Airbus has badly lagged its US archrival in wide-body aircraft with 250-450 seats.

But Airbus has high hopes for its new A350, which it says is "setting a new standard of efficiency in its class" with a lightweight, carbon fiber composition that can save up to 25 per cent in fuel consumption.

Airbus believes the A350 can compete with Boeing's classic 777 aircraft as well as the its heavily-touted 787 Dreamliner, which also boasts carbon fiber construction to cut weight.

But Boeing executives say they are confident the US company's lead will stick.

Airbus "still don't have the market coverage we do, especially on the upper end of the market", said Boeing marketing vice president Randy Tinseth. "You see it with the orders. You see it with the market share. They are just not doing that well."

Tinseth said Airbus would need to develop a new version of its A350 with 450 seats to compete with the Boeing 777-9X.

But some analysts see a more competitive landscape than Boeing is letting on.

"If you exclude the 777-9X, the other models can run the same routes with the same capacity and a similar level of performance," said Michel Merluzeau, an analyst at Frost & Sullivan.

Airbus has "got a foot in the market of the 787 and a foot in the market of the 777", Merluzeau added.

Jumbo jet demand rising 

The appeal of long-haul aircraft is the same for both of the world-leading aircraft makers: greater profits.

Whereas Boeing's smaller 737 line sells for $78-$113 million, the 787 is listed at $218-$297 million and the 777 at $269-$388 million.

A new round of jumbo plane orders is expected from carriers seeking to cut their fuel costs. Demand for the bigger planes will reach 7,800 units worth about $1 trillion in the coming 20 years, according to Airbus.

Boeing currently leads with about 55 per cent of the market. It has logged 1,105 orders for the 787 against 780 for the Airbus 350, according to the most recent figures.

But Airbus has had some major wins of late. In November, US carrier Delta Air Lines announced a firm order for 25 new A350 widebodies.

"You can't debate the fact that it is a massive endorsement of your product line," said Airbus chief operating officer for customers, John Leahy.

Airbus Chief Executive Fabrice Bregier has set a goal of winning more than half the global market.

To win market share, it is offering aggressive commercial terms to carriers, as suggested by Airbus accounts: in 2014, Boeing had a profit margin of 10.7 per cent per order compared with 6 per cent at Airbus.

Boeing remains a step ahead in the race for delivering large planes, producing ten 787s per month since the middle of 2014 with plans to reach 12 per month in 2016.

Airbus plans to produce 15 of the A350 in 2015 with output reaching 10 per month in 2018.

"Boeing should be able to maintain its market share through the end of this decade," said an analyst note from Trefis.

Recent successful launches by Boeing in the 777 and 787 lines should allow it to "maintain its lead over Airbus in the wide-body airplane segment", Trefis added.

AMMAN — Finance Minister Umayya Toukan on Tuesday said financial reforms should take social justice into consideration.

Delivering an address at a meeting of the Council of Arab Ministers of Finance in Kuwait, he stressed the importance of assuring citizens that the tax system is fair, as that helps boosts taxpayers’ confidence in the system and guarantees  it will achieve social and economic goals.

At the meeting, Toukan highlighted Jordan’s experience in financial reform programmes, which helped improve the Kingdom’s economic indicators. The meeting is part of the annual joint meetings of Arab financial institutions held in the Kuwaiti capital.

AMMAN – The Arab Potash Company (APC) will export 600,000 tonnes of potash to the Sinochem Macao Chinese company under an agreement recently signed between the two sides. According to the APC website, the quantity will be exported this year, in addition to other optional quantities to be agreed upon by the two companies. 

AMMAN — Amman Chamber of Industry’s (ACI) exports to Iraq declined by 19 per cent during the first quarter of 2015, compared to the same period of 2014 due to the security conditions in the neighbouring country, ACI Director General Nael Husami said Monday.

According to a statistical report, ACI exports to Iraq in the first three months of 2015 reached JD190 million, compared to JD235 million in 2014’s first quarter.

Husami warned against the drop of exports to Iraq, calling for intensive efforts to address the challenges, most important of which is the low number of Iraqi trucks that enter the Kingdom empty to load local goods, and the long time they wait to reach the customs exchange park.

Despite the increase of the total ACI exports to external markets in the first quarter of 2015, it was not a source of relief to Husami. He noted that the rise was led by the mining industries sector, while the manufacturing sector, which employs more workforce, witnessed a decline.

According to the report, ACI total exports in the January-March period stood at JD1.08 billion compared to JD1.07 billion in the same period of 2014. 

AMMAN — Loan guarantees offered by Jordan Loan Guarantee Corporation (JLGC) seem to be gaining momentum as they were in high demand last year.

According to the JLGC's 21st annual report, the outstanding guaranteed portfolio at the end of 2014 was valued at JD64.6 million spread over 3,599 credits.

At the end of 2013, the guaranteed value was JD59.1 million spread over 3,306 credits.

Of the outstanding balance at the end of last year, JD36.1 million in guaranteed value covered 1,826 productive credits under the small- and medium-sized enterprises’ (SMEs) loan guarantee programme. 

The remaining JD28.5 million were in guarantees for 1,773 beneficiaries from real estate and personal loans.

JLGC Chairman Maher "Al Sheikh Hassan" told the shareholders in an annual report's foreword that productive projects carried out by SMEs benefited last year from financial guarantees extended to 824 loans, carrying a JD32 million nominal value. 

Sheikh Hassan, who is the deputy governor of the Central Bank of Jordan, indicated that under the export and domestic credit  guarantee programmes, JLGC also covered 1,219 shipments with a value in excess of  JD52 million.  

In  a breakdown of the latter facility, JLGC General Manager Mohammed Al Jafari mentioned that guarantees valued at JD47 million  were spread over 794 export shipments, and others valued at around JD5 million were spread over 425 domestic sales.

Tables highlighting operational activities and results  showed that the amount outstanding of loan guarantees at the end of 2014 was JD19.7 million, 98.35 per cent of the JD20 million ceiling provided under the "productive programmes/small enterprises" category.

At the end of 2013, the outstanding amount was JD13.65 million or 73.8 per cent of the JD18.5 million ceiling.

In terms of number of loans, the amount last year  was spread over 1,647 borrowers compared with 1,205 beneficiaries in 2013. 

Under the second category, named "real estate and housing programmes/personal", the performance was lower as the outstanding amount declined from JD30.8 million at the end of 2012, or 76.8 per cent of the JD40.1 million ceiling to JD28.6 million or 75.3 per cent of the JD37.9 million ceiling.

In terms of number of loans, the amount was spread over 1,944 beneficiaries in 2013 compared with 1,773 beneficiaries in 2014.

Combining both categories, outstanding loan guarantees stood at JD48.2 million at the end of last year, or 83.2 per cent of the JD57.95 million ceiling.

On December 31, 2013, the combined outstanding amount was JD44.4 million, 75.9 per cent of the JD58.55 million ceiling.

Beside those facilities, the corporation operates a loan guarantee portfolio earmarked for industrial financing. 

The outstanding value under this facility at the end of last year was JD16.4 million spread over 179 borrowers compared with JD14.7 million spread over 157 borrowers in 2013. 

The guarantees for  industrial financing last year totalled JD4.5 million to 26 entrepreneurs, 34.3 per cent higher than the JD3.3 million in 2013 to 22 beneficiaries.

Jafari pointed out that the banks participating in the transactions submitted last year claims amounting to JD530,000 for compensation on bad loans. In 2013, bank claims for reimbursement totalled JD766,000. 

The general manager said in the annual report that compensation paid by JLGC in 2014 in lieu of bad loans amounted to around JD307,000, lower than the JD332,000 paid in reimbursements in the previous year.

JLGC recouped JD354,000 last year compared with more than JD129,000 recovered in 2013.

"To encourage operational sustainability for small- and medium-sized entrepreneurs, and in consideration of the business circumstances and environment in the Kingdom in 2014, the door was opened to reschedule  some indebtedness," Jafari said in the report.

He indicated that JD5.4 million in guaranteed loans were rescheduled  compared with JD3.3 million in 2013. 

Financially, the report showed that gross earnings went up in 2014 by 4.9 per cent to JD1.75 million compared with JD1.7 million at the end of the previous year.

"The increase was due to higher operational income which rose from JD843,000 in 2013 to JD874,000 last year, and to growth in investment earnings which went up from JD829,000 to JD879,000," the report indicated.

According to the balance sheet as of December 31, 2014, JLGC generated JD420,336 net profit slightly higher than the JD419,696 posted at the end of the previous year.

The balance sheet showed shareholders' equity at JD14.5 million, and total assets at JD25.9 million.

The annual report shows that the corporation is active in channelling donor funds to SMEs in cooperation with the Central Bank of Jordan, the Ministry of Planning and the Development and Employment Fund, among others.

The Central Bank of Jordan, the Cities and Villages Development Bank, the Social Security Corporation were JLGC's main shareholders at the end of last year as they owned 47.75 per cent, 5.25 per cent and 5.24 per cent respectively of its JD10 million capital.

KUSATSU, Japan — Hirotoshi Ogura, a self-described "factory geek", is Daikin Industries'  master of doing more with less, and part of the reason Japan's recovery remains stuck in the slow lane.

As Japan heads into the season of peak demand for room air-conditioners, Ogura and other Daikin managers have been tasked with figuring out how to boost output by some 20 per cent at a plant in western Japan that six years ago the company had almost given up on as unprofitable.

The wrinkle: they have no budget for new capital investment at the 45-year-old Kusatsu plant. 

The still-evolving workaround shown to a recent visitor involves home-made robots for ferrying parts, experimental systems using gravity rather than electricity to power parts of the line, more temporary workers on seasonal contracts and dozens of steps to chip away at the 1.63 hours it takes to make a typical new air conditioner.

"We can do a lot without spending anything," says Ogura, a 33-year Daikin veteran who joined the company just after high school. "Anything we need, we first try to build ourselves."

Like Daikin, a number of Japanese manufacturers are shifting production back to Japan from China and elsewhere to take advantage of a weaker yen. 

Rival Panasonic has pulled back some production of room air-conditioners, Sharp  has brought back production of some refrigerators, and Canon  has repatriated some output of high-end copiers, according to a list compiled by Nomura.

But even as output recovers, Japanese companies remain cautious about new capital investment in factories and equipment. The trend is especially pronounced for smaller firms down the supply chain.

After increasing capital spending by 6 per cent in the just-completed fiscal year, small manufacturers plan a 14 per cent decrease in the current year, according to the Bank of Japan's quarterly survey released this week. 

Big manufacturers like Daikin plan a 5 per cent increase, but overall investment remains 10 per cent below pre-crisis 2007 levels.

Over the same time, corporate earnings have increased by 11 per cent, shares have rallied, Daikin's are up more than four-fold from its 2008 low, and Japanese companies have socked away a record 87 trillion yen ($730 billion) in cash. 

No mood for risk

For Prime Minister Shinzo Abe's economic revival plan to work, pulling Japan out of decades of stagnation and deflation, companies need to be willing to use that cash for new investment in a way they have so far baulked at in the more than two years since he took office, economists say.

"It turned out that the government and the Bank of Japan were wrong in thinking monetary easing would boost capital spending," said Taro Saito, director of economic research at NLI Research Institute. 

"Low growth expectations appear to outweigh the benefit from lower interest rates, keeping companies from boosting capital spending," he added.

For Daikin, there is a wariness that the slumping demand and sharply higher yen that almost forced the closure of the Kusatsu plant in 2009 could return at any time. Sales in Japan represent just 25 per cent of Daikin's air-conditioning sales now, down from over a third in 2009.

But managers also say the lean years have forced the company to innovate at its four home factories, a theme mirrored at Daikin's production mentor, Toyota Motor.

At the urging of Toyota President Akio Toyoda, Japan's top automaker last week unveiled the results of a five-year-old programme to re-engineer the way it makes cars to cut the costs of retooling existing factories and building new ones.

Already running its factories at 90 per cent of capacity, Toyota expects to be able to cut the cost to retool an existing production line for a new model by half of what it cost in 2009 and cut the investment needed for the new plants it is planning for Mexico and China by 40 per cent from earlier levels.

Like Daikin, the savings at Toyota will come by a thousand cuts, from smaller and more efficient paint booths to a faster and more flexible robot welding system that will also be installed at factories in Japan.

Atsushi Takeda, chief economist for the Itochu Economic Research Institute, said there was not much Abe's government could do to shake companies out of their caution, apart from cutting regulations and encouraging new industries, areas where progress has been slow. 

Most Japanese companies still see better growth outside Japan and are investing accordingly.

"Companies were so hard hit by the excessive yen strength after the Lehman shock they want to be convinced there won't be a reversal of the weak yen over the next five to 10 years," Takeda added. "They are in no mood to take risk."  

ASHGABAT, Turkmenistan — The president of energy-rich Turkmenistan said in comments broadcast Saturday that his energy dependent country has been hit hard by low oil prices and he urged the government to diversify the economy.

In a rare admission of the ex-Soviet nation's economic troubles, President Gurbanguly Berdymukhamedov said the country needed to boost earnings and urged officials to cut spending.

"The problems of the world economy have had a negative impact," Berdymukhamedov told government officials at a cabinet meeting Friday, although the comments were only aired on state television Saturday.

"These difficulties are increasingly affecting our country, [and] to a certain extent are stifling economic growth."

"In such conditions we are forced to transform our economic policies," he told the Cabinet meeting, urging officials to revise the state budget.

Efforts have been made to boost domestic industries not related to oil and gas, he said, adding that exports from these industries only amounted to $1 billion.

He demanded that the government increase this figure to $5 billion by 2020.

"Our country has rich reserves of natural resources," Berdymukhamedov said.

"In this regard, I believe that we can create a lot of enterprises able to produce high-quality products no worse than the imported products we are now using hard currency to purchase."

The government of the Central Asian country does not typically make public comments about the country's economic problems.

Turkmens were shocked when authorities devalued the national manat currency by a fifth at the beginning of the year.

Berdymukhamedov said at the time that the "extraordinary step" was triggered by low prices for gas and oil, which make up more than 90 per cent of the country's exports.

Turkmenistan has the world's fourth largest known reserves of natural gas but limited export infrastructure and few reliable partners.

The main importer of Turkmen gas is China, which is committed to expanding its consumption of gas relative to carbon-intensive fossil fuels such as coal.

Crude oil has lost around 60 per cent of its value since June due to oversupply, with a strong dollar and a weak global economy dampening demand.

DOHA — Qatar's economy grew by more than 6 per cent in 2014, official figures showed, driven by spending on huge construction projects ahead of the 2022 World Cup.

Shrugging off any fears regarding the oil price slump, the energy-rich Gulf economy expanded by 6.2 per cent last year, according to the ministry of development planning and statistics.

The strong performance is evidence of "the resilience of the Qatari economy and its ability to withstand the decline in oil prices thanks to its strong macroeconomic fundamentals," the Qatar National Bank (QNB) said in a commentary on the figures.

Qatar has made efforts to diversify its economy away from oil and gas.

A key driver of growth last year was the construction sector, which expanded 18 per cent, QNB indicated.

Qatar has embarked on a huge $200-billion (190 billion-euro) infrastructure spending splurge ahead of hosting football's premier competition in seven years' time.

Among the major projects Qatar has approved are plans to develop the country's railway network, including the construction of a metro system for the capital Doha and surrounding areas, developing the city that will host the World Cup final, Lusail, and the building of a new port.

Other non-energy growth drivers last year included the financial services and the hotel and restaurant trade.

Despite the fall in global oil prices, Qatar's premier vowed recently to stick to the infrastructure spending splurge, 

Sheikh Abdullah Bin Nasser Bin Khalifa Al Thani told business leaders at a Doha finance conference that the kingdom would maintain its plans to spend heavily on development projects in the run-up to the football World Cup in 2022.

"We reiterate our commitment to investment infrastructure, health and education," he said.

Regional business intelligence specialist MEED has predicted that Qatar will see $30 billion worth of new infrastructure projects through 2015 alone.

The prime minister's message echoed comments by Qatar's finance minister, Ali Shareef Al Emadi, who said the country would keep up heavy spending on infrastructure despite fears over the global economy.

Qatar announced that its population had jumped in February to a record 2.33 million, on the back of an influx of foreign workers moving to the country.

Sheikh Abdullah, who is also interior minister, predicted Qatar's economy would grow by 7 per cent in 2015, suggesting the population increase was likely to continue.

PARIS — The Iranian nuclear deal, which heralds a lifting of sanctions choking the country's economy, could offer an unparallelled opportunity for foreign oil companies, but may take time to tap.

Thursday's deal "could represent a first step towards a return of Western oil companies" to Iran, said an analyst.

The sanctions imposed on Iran by the United States, then by the United Nations and European Union, led to the gradual departure of major Western oil companies, leaving just Chinese and Indian firms.

The lifting of sanctions offers a rare opportunity: entry into a country that is both a major oil and gas producer.

Despite sanctions cutting oil output by over a quarter, from 4 million barrels per day (mbpd) in 2008 to 2.81 mbpd on average in 2014, Iran still remains the fifth largest producer in the Organisation of Petroleum Exporting Countries (OPEC). It exports around 1.1 mbpd of oil.

Iran holds the second-largest gas reserves in the world behind Russia.

"Iran is a country with considerable oil and gas potential," said Francis Perrin, head of the SPE group of energy policy trade journals.

But any return is at least months away, according to Pierre Terzian, head of the Petrostrategies weekly.

Once sanctions are lifted, Iran will no doubt be looking to market the oil stocks it has accumulated in order to raise cash.

It could then "before the end of the year increase its [production] level significantly", said Guy Maisonnier, an economist at IFP Energies Nouvelles Research Centre, pointing out it produced 3.4 to 3.6 mbpd in 2012. 

But the hike in production depends upon the condition of Iranian oil wells and refineries, which haven't had access to spare parts and technology from the West for several years.

Iran wants the best

Iran has made no secret of its desire to see Western energy companies return.

At the Davos forum of international business elites in Switzerland last year, Iranian President Hassan Rouhani called on them to invest in his country's energy sector.

But their interest in doing so will depend greatly upon the conditions Tehran offers.

"For the energy companies to return to Iran, the fiscal terms of the contracts are attractive, which wasn't the case before the sanctions," said Bertrand Hodee, an energy analyst at the Raymond James brokerage.

"The Iranian system of buy-back contracts was too risky for international companies," he added.

While most oil investment deals globally are in the form of production sharing agreements, with the state getting a slice of the output in return for the concession, Iran preferred buy-back deals.

Under these, the international oil companies are in effect a contractor to Iran's national oil company, and are paid at agreed rates for their investments into installations. 

"Iran is conscious of that, in particular the Iranian oil ministry, which has been working for some time on a new framework oil agreement, the Iran Petroleum Contract" or IPC, which should be more attractive for foreign investors, said Perrin, because Iran "wants to work with the best".

As the extended absence of US oil companies from Iran risks making their return more complicated, European companies such as France's Total, Italy's Eni or Royal Dutch Shell may have an advantage, Perrin added.

He remarked that Iran "isn't very satisfied" with the Asian companies currently operating in the country. 

While the reopening of Iran offers energy companies opportunities, it won't immediately help them as it could prevent a rebound in oil prices which have fallen by 60 per cent from peaks last year, although that is a benefit for the global economy.

"For the world economy, the re-integration of Iran could help to keep oil prices lower for longer and mitigate the risks that conflicts elsewhere such as in Libya might pose to global oil supply," said economist Holger Schmieding at Berenberg bank.