- Singapore Fines Credit Suisse
Singapore fined Credit Suisse Group AG and United Overseas Bank Ltd. a total of S$1.6 million ($1.2 million) as regulators completed a two-year review of banks involved in fund flows linked to 1Malaysia Development Bhd., or 1MDB.
Credit Suisse was fined S$700,000 while UOB has to pay S$900,000 for breaches of anti-money laundering requirements and control lapses, the Monetary Authority of Singapore said in a statement Tuesday. The regulator also issued lifetime bans against former employees of Falcon Private Bank Ltd. and BSI Bank Ltd., which were shut down in Singapore last year.
“The two-year-long 1MDB-related review holds key lessons for both MAS and financial institutions in Singapore” following “abuses” linked to 1MDB fund flows, Ravi Menon, managing director at the Monetary Authority of Singapore, said in the statement. “The price for keeping our financial center clean as it grows in size and inter-connectedness is unstinting vigilance.”
Singapore has vowed stronger action after the central bank found anti-money laundering lapses at financial-services companies linked to 1MDB. Singapore also previously banned former Goldman Sachs Group Inc. banker Tim Leissner over breaches linked to 1MDB.
The investment fund controlled by the Malaysian government has consistently denied wrongdoing. It’s at the heart of multiple investigations across the globe as authorities probe whether money flowed through and around 1MDB, and illegally into personal accounts. A Malaysian parliamentary committee identified at least $4.2 billion in irregular transactions, some of which U.S. prosecutors allege landed in Prime Minister Najib Razak’s personal bank account. Najib has denied wrongdoing.
Singapore has so far imposed a total of S$29.1 million in financial penalties on eight banks, including DBS Group Holdings Ltd., UBS Group AG, Coutts & Co. and Standard Chartered Plc, in relation to 1MDB. The MAS also issued orders banning four former bank employees individuals from financial activities, and has notified another three individuals of its intention for similar action ranging from three to six years.
Credit Suisse issued a statement saying it regretted that it had fallen short of MAS and its own standards, noting that the regulator’s review had found no pervasive anti-money laundering control weaknesses.
UOB, Singapore’s third-largest lender, said it accepted the MAS’s findings, adding that it will continue to build on its AML processes. Both will donate profits that came from the lapses to charities, they said.
The MAS in March banned Leissner, the former Goldman banker, from the city’s securities industry for 10 years, and said it was going to issue lifetime prohibition orders against Jens Fred Sturzenegger, Falcon’s former Singapore branch manager, Yak Yew Chee, an ex-employee of BSI in Singapore, and a 15-year ban against another BSI banker, Yvonne Seah Yew Foong. The MAS officially announced those penalties today. Seah is now known as Seah Mei Ying, according to the regulator’s statement.
The MAS also said it intended to issue prohibition orders against former Maybank Kim Eng Securities Pte representative Kelvin Ang Wee Keng, NRA Capital Pte’s Chief Executive Officer Kevin Scully, and its former head of research Lee Chee Waiy.
The three were involved in the valuation process of PetroSaudi Oil Services Ltd., which has been previously linked with 1MDB.
Oil Prices Recover Slightly Amidst Demand Concerns in U.S. and China
Oil Prices Continue Slide as Market Skepticism Grows Over OPEC+ Cuts
Global oil markets witnessed a continued decline on Wednesday as investors assessed the impact of extended OPEC+ cuts against a backdrop of diminishing demand prospects in China.
Brent crude oil, the international benchmark for Nigerian crude oil, declined by 63 cents to $76.57 a barrel while U.S. WTI crude oil lost 58 cents to $71.74 a barrel.
Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to maintain voluntary output cuts of approximately 2.2 million barrels per day through the first quarter of 2024.
Despite this effort to tighten supply, market sentiment remains unresponsive.
“The decision to further reduce output from January failed to stimulate the market, and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” noted PVM analyst Tamas Varga.
Adding to the unease, Saudi Arabia’s decision to cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months raises concerns about the struggling demand for oil.
Amid the market turmoil, concerns over China’s economic health cast a shadow, potentially limiting fuel demand in the world’s second-largest oil consumer.
Moody’s recent decision to lower China’s A1 rating outlook from stable to negative further contributes to the apprehension.
Analysts will closely watch China’s preliminary trade data, including crude oil import figures, set to be released on Thursday.
The outcome will provide insights into the trajectory of China’s refinery runs, with expectations leaning towards a decline in November.
Russian President Vladimir Putin’s diplomatic visit to the United Arab Emirates and Saudi Arabia has added an extra layer of complexity to the oil market dynamics.
Discussions centered around the cooperation between Russia, the UAE, and OPEC+ in major oil and gas projects, highlighting the intricate geopolitical factors influencing oil prices.
U.S. Crude Production Hits Another Record, Posing Challenges for OPEC
U.S. crude oil production reached a new record in September, surging by 224,000 barrels per day to 13.24 million barrels per day.
The U.S. Energy Information Administration reported a consecutive monthly increase, adding 342,000 barrels per day over the previous three months, marking an annualized growth rate of 11%.
The surge in domestic production has led to a buildup of crude inventories and a softening of prices, challenging OPEC⁺ efforts to stabilize the market.
Despite a decrease in the number of active drilling rigs over the past year, U.S. production continues to rise.
This growth is attributed to enhanced drilling efficiency, with producers focusing on promising sites and drilling longer horizontal well sections to maximize contact with oil-bearing rock.
While OPEC⁺ production cuts have stabilized prices at relatively high levels, U.S. producers are benefiting from this stability.
The current strategy seems to embrace non-OPEC non-shale (NONS) producers, similar to how North Sea producers did in the 1980s.
Saudi Arabia, along with its OPEC⁺ partners, is resuming its role as a swing producer, balancing the market by adjusting its output.
Despite OPEC’s inability to formally collaborate with U.S. shale producers due to antitrust laws, efforts are made to include other NONS producers like Brazil in the coordination system.
This outreach aligns with the historical pattern of embracing rival producers to maintain control over a significant share of global production.
In contrast, U.S. gas production hit a seasonal record high in September, reaching 3,126 billion cubic feet.
However, unlike crude, there are signs that gas production growth is slowing due to very low prices and the absence of a swing producer.
Gas production increased by only 1.8% in September 2023 compared to the same month the previous year.
While the gas market is in the process of rebalancing, excess inventories may persist, keeping prices low.
The impact of a strengthening El Niño in the central and eastern Pacific Ocean could further influence temperatures and reduce nationwide heating demand, impacting gas prices in the coming months.
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