Oil prices slip on economic worries, surging US crude supply

US crude oil production remained at a record 12.2 million barrels per day. (Reuters)
Updated 11 April 2019
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Oil prices slip on economic worries, surging US crude supply

  • US crude inventories rose 7 million barrels to 456.6 million barrels in the last week
  • Despite the surge in US supply and the economic concerns, global oil markets remain tight amid supply cuts

SINGAPORE: Oil prices were dragged down on Thursday by surging US crude stockpiles and record production, while economic concerns cast doubt over growth in demand for fuel.
International benchmark Brent futures were at $71.52 per barrel at 0642 GMT, down 21 cents, or 0.3 percent, from their last close.
US West Texas Intermediate (WTI) crude oil futures were at $64.34 per barrel, down 27 cents, or 0.4 percent, from their previous settlement.
US crude inventories rose 7 million barrels to 456.6 million barrels in the last week, their highest since November 2017, the Energy Information Administration said on Wednesday.
US crude oil production remained at a record 12.2 million barrels per day (bpd), making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.
There are also concerns that an economic slowdown will soon dent fuel consumption after the International Monetary Fund this week downgraded its global growth forecast to the lowest in a decade.
Despite the surge in US supply and the economic concerns, global oil markets remain tight amid supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), US sanctions on oil exporters Iran and Venezuela, and escalating fighting in Libya.
“(Oil markets will remain tight) as long as Saudi Arabia continues to back the production cut deal as aggressively as it has done so far,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Brent and WTI have risen by around 30 and 40 percent respectively since the start of the year.
“Pressure to global supplies continues to mount because of sanctions-linked problems in Iran and Venezuela and rising geopolitical risk in Libya,” said Stephen Innes, head of trading at SPI Asset Management.
Beyond the short-term outlook for oil markets, a lot of attention is on the future of demand amid the rise of alternative fuels for transport.
“We believe global demand has another 10 million barrels bpd of growth, with over half from China,” Bernstein Energy said in a note on Thursday.
Current oil demand stands around 100 million bpd.
Bernstein said it expected oil demand to peak around 2030, but added that “we expect a long plateau rather than a sharp decline” in consumption after that.
“While no industry lasts forever, the age of oil is far from over,” Bernstein said.


MODON to establish integrated pharmaceutical complex

Updated 23 May 2019
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MODON to establish integrated pharmaceutical complex

JEDDAH: The Saudi Authority for Industrial Cities and Technology Zones (MODON) has signed an industrial land lease covering more than 62 thousand square meters in the city of Madinah, to build a pharmaceutical complex including research and development centers, with a total investment reaching SR 570 million.

MODON’s Director General Khalid bin Mohammed Al-Salem said that the signing of the contract was the result of joint work with the National Program for the Development of Industrial Compounds. MODON provided various facilities and incentives to support the investment, with the project set to provide nearly 1000 jobs for both genders with a localization rate exceeding 50 percent.

He added that the project is in line with the goals of the National Industrial and Logistics Development Program (NIDLP) to localize the most advanced industries in the world, in accordance with Saudi Vision 2030 for economic diversification.

Since its inception in 2001, MODON has been developing integrated industrial lands in accordance with the highest international standards. It currently oversees 35 industrial cities under development in various regions of the Kingdom, in addition to supervising private industrial parks and cities. The developed industrial lands exceeded until today 198.8 million square meters, while the existing industrial cities include 3,474 productive factories.