Saudi September nonoil business growth fastest in over 3 years

Updated 07 October 2014

Saudi September nonoil business growth fastest in over 3 years

JEDDAH: Nonoil private business activity in Saudi Arabia grew at the fastest pace in over three years last month, buoyed by strong expansions in new orders and employment, a survey showed.
The SABB HSBC Saudi Arabia Purchasing Managers’ Index climbed to a seasonally adjusted 61.8 points in September, its highest level since June 2011, from 60.7 points in August, remaining far above the 50 line denoting growth.
Output growth hit its highest level since March 2011 while new orders expanded at their fastest pace since May 2012. Construction was a major source of demand growth, companies responding to the survey said.
The survey suggested that the short-term negative impact of labor reforms on the economy might be fading; employment growth rose to 53.9 points, its highest level since December 2012.
Measures to push more Saudi citizens into private sector jobs have made it harder and more costly to hire foreign workers.
Growth in new orders produced the fastest increase in backlogs of work since the survey was launched in August 2009.
The survey showed only moderate inflationary pressure, however.
Overall input price inflation edged down to 54.2 points from 54.7 points, while output price inflation eased to 50.9 points from 51.3 points.
A separate survey showed that business activity growth in the UAE’s nonoil private sector fell to a four-month low in September as gains in new orders slowed despite increasing output.
The HSBC UAE Purchasing Managers’ Index, which measures the performance of the manufacturing and services sectors, dropped to 57.6 points in September from a record high of 58.4 points in August.
The adjusted index remains well above the 50-point mark which separates growth from contraction, the survey of 400 private sector firms showed.
“Numbers continue to indicate we are in a good stage in the economic cycle. Output continues to grow while price pressures remain under control,” said Razan Nasser, senior economist for the Middle East and North Africa at HSBC.
UAE firms saw output growth accelerate to a three-month high of 63.2 points in September from 62.2 points in August. However, new orders growth dropped to 64.0 points, the lowest rate since August 2013, from 66.4 points the previous month.
Growth in new export orders also slowed to a four-month low of 60.9 points from 64.0 points, which was the highest level since the series began in August 2009, the survey showed.
Employment creation across the UAE’s nonoil private sector slipped to 52.6 points, the weakest growth since January.
Output price growth slipped into negative territory again after one month in positive territory. The rate of input price inflation eased to a four-month low of 54.4 points.

Russia vows cooperation with OPEC to keep oil market balanced

Updated 21 November 2019

Russia vows cooperation with OPEC to keep oil market balanced

  • Moscow not aiming to be world’s No.1 crude producer, Putin tells annual investment forum

MOSCOW: President Vladimir Putin said on Wednesday that Russia and the Organization of the Petroleum Exporting Countries (OPEC) have “a common goal” of keeping the oil market balanced and predictable, and Moscow will continue cooperation under the global supply curbs deal.

OPEC meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.

“Our (common with OPEC) goal is for the market to be balanced, acceptable for producers and consumers and the most important — and I want to underline this — predictable,” Putin told a forum on Wednesday.

In October, Russia cut its oil output to 11.23 million barrels per day (bpd) from 11.25 million bpd in September but it was still higher than a 11.17-11.18 million bpd cap set for Moscow under the existing global deal. Putin told the forum that Russia’s oil production was growing slightly despite the supply curbs deal but Moscow was not aiming to be the world’s No. 1 crude producer. Currently, the US is the world’s top oil producer.

“Russia has a serious impact on the global energy market but the most impact we achieve (is) when working along with other key producers,” he said. “There was a moment not that long ago when Russia was the world’s top oil producer — this is not our goal.”

Russia plans to produce between 556 million and 560 million tons of oil this year (11.17-11.25 million bpd), Energy Minister Alexander Novak said separately on Wednesday, depending on the volume of gas condensate produced during cold months.

Russia will aim to stick to its commitments under the deal in November, Novak told reporters.

Russia includes gas condensate — a side product also known as a “light oil” produced when companies extract natural gas — into its overall oil production statistics, which some other oil producing countries do not do.

As Russia is gradually increasing liquefied natural gas production (LNG), the share of gas condensate it is producing is also growing. Gas condensate now accounts for around 6 percent of Russian oil production.

Novak told reporters that in winter, Russia traditionally produces more gas condensate as it is launching new gas fields in the freezing temperatures.

“We believe that gas condensate should not be taken into account (of overall oil production statistics), as this is an absolutely different area related to gas production and gas supplies,” he said.

Three sources told Reuters on Tuesday that Russia is unlikely to agree to deepen cuts in oil output at a meeting with fellow exporters next month, but could commit to extend existing curbs to support Saudi Arabia.

On Wednesday, Novak declined to say that Russia’s position would be at upcoming OPEC+ meeting. Reuters uses a conversion rate of 7.33 barrels per ton of oil.