Minister comfortable with current prices as Oman favors new kind of deal

Saudi Energy Minister Khalid Al-Falih talks to journalists during the 7th Meeting of the Joint Ministerial Monitoring Committee in Muscat on Sunday. He called for extending cooperation between OPEC and non-OPEC oil producers beyond 2018. (AFP)
Updated 21 January 2018
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Minister comfortable with current prices as Oman favors new kind of deal

MUSCAT: Saudi Arabia’s energy minister urged global oil-producing nations on Sunday to extend their cooperation beyond 2018, but said this might mean a new form of deal rather than continuing the same supply cuts that have boosted prices in recent months.
It was the first time that Saudi Arabia had publicly raised the possibility of a new form of coordination among oil producers after 2018. Their agreement on supply cuts, originally launched last January, is due to expire in December this year.
Khalid Al-Falih, speaking to reporters ahead of a meeting later in the day of the joint ministerial committee which oversees implementation of the cuts, said extending cooperation would convince the world that coordination among producers was “here to stay.”
“We shouldn’t limit our efforts to 2018 — we need to be talking about a longer framework of cooperation,” Al-Falih said. “I am talking about extending the framework that we started, which is the declaration of cooperation, beyond 2018.
“This doesn’t necessarily mean sticking barrel by barrel to the same limits or cuts, or production targets country by country that we signed up to in 2016, but assuring stakeholders, investors, consumers and the global community that this is something that is here to stay. And we are going to work together.”
Al-Falih said the global economy had strengthened while supply cuts — in which Saudi Arabia has shouldered by far the largest burden — had shrunk oil inventories around the world. As a result, the oil market will return to balance in 2018, he said.
But he said producers still had a lot of hard work ahead to restore the market to health, and it was unlikely to reach balance by the middle of this year.
Al-Falih and energy ministers from the UAE and Oman noted that the rise of the Brent oil price to three-year highs around $70 a barrel in recent weeks could cause an increase in supply of shale oil from the US.
But both Al-Falih and UAE minister Suhail Al-Mazroui said they did not think the rise in prices would hurt global demand for oil.
Kuwait’s oil minister Bakheet Al-Rashidi said any discussion among producers on the future of the agreement on supply cuts would probably happen at a meeting in June. OPEC and other producers led by Russia are next scheduled to meet to discuss oil policy in June.
Oman’s oil minister Mohammed bin Hamad Al-Rumhi said producers would discuss in November whether to renew their supply agreement or enter a new type of agreement. Oman is in favor of a new type of deal, he said without elaborating.


Saudi Arabia flat, Drake and Scull International lifts Dubai

Updated 20 May 2018
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Saudi Arabia flat, Drake and Scull International lifts Dubai

  • The Saudi index was little changed, while the Dubai index closed up 0.2 percent
  • Shares in Saudi oil and gas and petrochemical companies were mostly down

DUBAI: Gulf stock markets were mostly flat on Sunday amid low trading volumes and a lack of significant events.
The Saudi index was little changed, while the Dubai index closed up 0.2 percent. The rest of the region closed down, but with losses limited.
Global stocks dipped last Friday because of persistent concerns over trade tensions. Oil prices also slipped on Friday, with Brent crude futures falling 79 cents, or 1 percent, to settle at $78.51 a barrel. But the dip came after a sixth week of gains, with prices breaking through $80 a barrel last week for the first time since November 2014.
Shares in Saudi oil and gas and petrochemical companies were mostly down on Sunday, despite some gains earlier in the day. Blue-chip Saudi Basic Industries (SABIC) shed 0.2 percent, while Saudi Kayan Petrochemical edged down 0.1 percent.
Most of the trading was concentrated on real estate developer Dar Al Arkan Real Estate Development Co., which was up 0.4 percent, and Alinma Bank, down 0.1 percent.
Real estate developer Jabal Omar Development was among the best performers, up 3.9 percent at the close – and it had been up more than 6 percent in earlier trading – after announcing an agreement with Albilad Capital to sell 90 housing units for 1.1 billion riyals ($293 million).
In Dubai, the index was lifted by gains of 2 percent and 1.7 percent by Dubai Financial Market and building contractor Drake and Scull International, respectively.
Drake and Scull International, by far the most traded stock in the market, reported last week a net profit attributable to shareholders of 16.2 million dirhams ($4.4 million) for the first quarter, swinging from a net loss of 722.5 million dirhams in the corresponding period last year.
Heavyweight Emaar Properties climbed 0.2 percent after a weak start earlier on Sunday.
The Abu Dhabi index edged down 0.1 percent, pressured by Sharjah Cement and Industrial Development Company, which lost 4.8 percent and was the most traded stock.
The Egyptian index lost 0.6 percent, but the most traded stock was Orascom Telecom Media & Technology Holding , which gained 2.4 percent.