Oil markets ease after three days of gains

An oil tanker is being loaded at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. The kingdom is temporarily halting oil shipments through the Red Sea shipping lane of Bab Al-Mandab. (Reuters)
Updated 27 July 2018
0

Oil markets ease after three days of gains

TOKYO: Oil prices edged lower on Friday in quiet trading after three days of gains, but took support from Saudi Arabia halting crude transport through a key shipping lane, falling US inventories and easing trade tensions between Washington and Europe.
Brent futures were down 5 cents at $74.49 a barrel by 0319 GMT, after gaining 0.8 percent on Thursday. They are heading for a near 2 percent gain this week, the first weekly increase in four.
US West Texas Intermediate futures were 5 cents lower, at $69.56, after rising nearly 0.5 percent in the previous session. The contract is heading for a 1.3 percent weekly loss, a fourth week of declines.
Saudi Arabia said on Thursday it was “temporarily halting” oil shipments through the Red Sea shipping lane of Bab Al-Mandab after an attack by Yemen’s Iran-aligned Houthi movement.
Any move to block the Bab Al-Mandeb, which is between the coasts of Yemen and Africa at the southern end of the Red Sea, would virtually halt oil shipments through Egypt’s Suez Canal and the SUMED crude pipeline that link the Red Sea and Mediterranean.
“The fundamentals of the oil market haven’t really changed. We will have sporadic news coming out of the more volatile regions every now and again, but the market is still oversupplied,” said Peter Lee, Asian oil and gas analyst at BMI Research in Singapore.
“The picture is getting a little better but it is not going to be until 2019 when we start to see more material signs of a deficit building in the market,” he said. “We expect to see range-bound trading till the end of the year.”
An estimated 4.8 million barrels per day of crude oil and refined products flowed through the Bab Al-Mandeb strait in 2016 toward Europe, the United States and Asia, according to the US Energy Information Administration.
However, Saudi Arabia has the Petroline, also known as the East-West Pipeline, which mainly transports crude from fields clustered in the east to Yanbu for export. That could offset a bottleneck caused by Bab Al-Mandeb’s closure.
US President Donald Trump and Jean-Claude Juncker, president of the European Commission, the EU’s executive body, struck a surprise deal on Wednesday that ended the risk of an immediate trade war between the two powers.
A trade war would likely hit demand for commodities like oil, which is used heavily in shipping, construction and other economic activity.
US crude oil inventories last week tumbled more than expected to their lowest level since 2015, the EIA said on Wednesday, as US gasoline and distillate stockpiles fell.


Russia’s RDIF to boost investment deals in Saudi Arabia

Updated 17 January 2019
0

Russia’s RDIF to boost investment deals in Saudi Arabia

  • Fund's CEO Kirill Dmitriev leads a delegation of more than 20 Russian business figures to the Kingdom
  • The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services

RIYADH: Russian sovereign wealth fund RDIF said on Wednesday it would significantly boost its investments deals with Saudi Arabia in 2019.

The fund’s CEO Kirill Dmitriev led a delegation of more than 20 Russian business figures to the Kingdom to discuss new projects.

Saudi Energy Minister Khalid Al-Falih met Dmitriev in Riyadh and expressed his happiness on the progress they made in the talks and the cooperation between the two countries. 

“Its not only commercial cooperation, but we are also working on scientific research, and we have opened a research center in Moscow University,” Al-Falih said.

The minister said the Russian delegation will also meet officials from Saudi Basic Industries Corporation SABIC and mining company Ma’aden among other companies during their three day visit to the Kingdom.

The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services sectors, a Russian Direct Investment Fund statement said.

Al-Falih added that the Russian side has started a rubber plant project in Al-Jubail with Total and Novomet.

RDIF already has a $10 billion investment partnership with the Saudi Public Investment Fun (PIF), with more than $2 billion already invested in projects.

“We extend our cooperation not only on oil cuts but to cooperate in oil services, technology, LG and petrochemicals,” Dmitriev said. “We believe Saudi Aramco can be one of the greatest partners of Russia.”

The CEO said they were continuing to cooperate with PIF in Saudi Arabia through a number of energy investments.

Russian companies are also keen to invest in the Kingdom’s planned $500 billion mega-city NEOM.

“We have companies that have interest to invest in NEOM, we would like to build a port in NEOM, it can be a big port,” Dmitriev said.