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Oil price hits fresh post 2009 lows as glut grows

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Oil prices resumed their slide on Tuesday, with U.S. crude falling below $37 per barrel for the first time since early 2009, amid fears the world was running out of capacity to store crude as a global glut intensifies.

The global oversupply is being compounded by OPEC’s failure last week to agree a production ceiling, with members Iran and Iraq promising to ramp up output and exports next year.

Benchmark Brent and WTI futures both fell more than 6 percent on Monday, and on Tuesday they hit fresh lows last seen during the credit crunch of 2008/09. Brent futures were down 60 cents at $40.13 a barrel by 1315 GMT. U.S. crude was trading at $36.86 a barrel, down 79 cents from its last settlement.

“The lower levels are largely the result of a renewed focus on fundamentals now that the bulls’ hope for an OPEC cut is off the table,” JBC Energy said in a note. The failure to agree production levels means OPEC core members are readying for new battles for share in the market already heavily oversupplied and consuming almost 2 million barrels per day less than it is producing.

“OPEC has lost control of the oil market and unless something fundamental changes that causes demand to overtake the oversupply in the market, the path of least resistance is the 2008 lows of $35-$38,” said Michael Hewson, chief market analyst at CMC Markets. If Brent falls below $36 per barrel, it would reach levels last seen in 2004 at the start of the so-called commodities super cycle.

Banks such as Goldman Sachs have said oil could fall to as low as $20 per barrel as the world might run out of storage to place unwanted crude. World oil stockpiles are at a record, according to the International Energy Agency.

In yet another indication of fierce market battles, trading sources said Saudi Arabia was shipping more crude oil to Asia over the last two months of the year.
On the demand side, China’s crude oil imports for the first 11 months of the year rose 8.7 percent to 6.61 million barrels per day, with November crude imports growing 7.6 percent from the same month a year ago.

China’s November sales of new vehicles jumped 17.6 percent over the same period. With crude prices near record lows, China is seen as likely to double its strategic oil purchases in 2016, adding 70-90 million barrels to its strategic petroleum reserves (SPR).

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SMEs benefit from Consumer Fair growth

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The Botswana Investment and Trade Centre (BITC) has applauded Botswana Consumer Fair’s continued efforts to improve small to medium enterprises’ linkages.

BITC Chief Executive Officer, Keletsositse Olebile, when opening the fair, said the event has provided interactive forum for both local and foreign exhibitors. He said the shopping show has enabled manufacturers, wholesalers and traders to market their products directly to consumers, an alignment to government’s endeavors.

“As part of government intention, we continually encourage local sourcing by retailers and distributors,” said Olebile who is just few months into his new post. He further celebrated the growth of Botswana Consumer Fair over the years, attributing the expansion to quality of goods displayed at the previous shows.“Improved quality and increased variety of wares increases the interest of the visitors and makes them look forward to returning the following year,” said Olebile.

This year’s exhibitors at the 13th event still running under the banner: ‘It is more than just shopping’ have been drawn from Lesotho, Zambia, Swaziland, South Africa, Nigeria, Ghana, Kenya, Egypt, Japan, India, Tanzania and Zimbabwe.

Consumer Fair is a flagship event for Fairgrounds Holdings and provides a platform for small medium enterprises (SMEs) from the different sectors of the economy to showcase and promote their products and services. In addition, the SMEs are expected to establish long term business linkages and promote local manufactured goods.Fairgrounds Holdings is already optimistic that the Fair immensely contribute to the socio-economic development of the country through supporting SMEs.

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‘Involve SMMEs in standards development’-Minister

Keikantse Lesemela

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Minister of Investment, Trade and Industry, Bogolo Kenewendo appealed to Botswana Bureau of Standards (BOBS) to include the Small, Medium and Micro Enterprises (SMMEs) when developing the standards to improve the sector.

She said the Ministry of Investment, Trade and Industry has identified three areas of focus going forward which are modeled on SMME development, investment promotion and export development apexes. “I would like to implore you to include this sector in standards development processes and assist in improving SMMEs conformity to standards and compliance to technical regulations,” said Kenewendo.

Speaking during the BOBS Technical Committee Members appreciation ceremony on Thursday, Kenewendo explained that the important roles of standards are underpinned by the aspirations and intentions espoused in both diversified export led economic growth and job creation as priority areas. “It goes without saying that the diversification of the economy requires a National Quality Infrastructure and Technical Regulatory Framework that promote competitiveness of Botswana goods and services.”

She also emphasized that an effective National Quality Infrastructure and Technical Regulatory Framework are essential as they provide crucial links to global trade, market access and export competitiveness through their contribution to consumer confidence in product safety, quality and the environment.Since inception in 1997 BOBS has published more than 1700 standards through 48 technical committees across several sectors of the economy; 109 certification licences have been issued against some of these standards. Currently 46 Botswana Standards are being implemented through the standards regulations with a view to protecting the health and safety of consumers as well as protection of the environment.

On her note, BOBS Vice Chairperson of the Standards Council, Professor Edward Dintwa said standards are powerful tools for helping organisations that implement them to realize their potential, have access and compete in the global marketplace. “In this highly competitive and complex world, issues of sustainability and productivity, viewed from economic, environmental and societal perspectives require that businesses must be more efficient in their operations, which can be achieved through the implementation of standards”.

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