Global scramble for Saudi crude as energy prices fall

New pricing and supply arrangements have been a big success with customers, especially in China and India. (AP)
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Updated 13 March 2020

Global scramble for Saudi crude as energy prices fall

  • Global crude prices suffer their biggest falls in 30 years after Russia declined to extend the cuts

DUBAI: Saudi Arabia is experiencing unprecedented demand for its crude oil, especially in Asia, as global energy prices fall and supplies are ramped up.

A source at Saudi Aramco, the world’s biggest oil company, told Arab News that the new pricing and supply arrangements — unveiled in the wake of the end of the OPEC+ agreement in Vienna last week — had been a big success with customers, especially in China and India.

Some customers missed out on bargains in the crude trade simply because of the high levels of demand. 

Some European and Asian customers were waiting to hear whether Aramco could meet their orders.

“Basically the demand has been huge and we’re unable to meet it all. It was well over 13 million barrels per day for April supply,” the source said on condition of anonymity.

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This week, Aramco announced plans to increase its maximum supply capacity to 13 million barrels per day by expanding and enhancing existing reserves, but currently the limit is 12.3 million, making the Kingdom the biggest producer in the world.

Global crude prices suffered their biggest falls in 30 years after Russia declined to extend the cuts in output that have kept oil at a relatively high level for the past three years. 

Brent crude — the Middle East benchmark — was trading at $33.71 in New York, down nearly 6 percent, after big falls for most of last week.

Financial markets continued to suffer on fears of the economic repercussions from the coronavirus outbreak, categorized as a “pandemic” by the World Health Organization. 

The S&P 500 Index was suspended on opening on Wall Street because of volatility. By mid-morning, it was down more than 3 percent.

 


Thailand finance minister: economy to recover next year with 4% growth

Updated 23 November 2020

Thailand finance minister: economy to recover next year with 4% growth

  • Economy had bottomed but recovery was not fast as the battered tourism sector hurt supply chains
  • Budget for the next fiscal year will still focus on boosting domestic activity

BANGKOK: Thailand’s economy is expected to grow 4 percent in 2021 after a slump this year and fiscal policy will support a tourism-reliant economy struggling from the impacts of the coronavirus pandemic, the finance minister said on Monday.
Southeast Asia’s second-largest economy shrank a less than expected 6.4 percent in the third quarter from a year earlier after falling 12.1 percent in the previous three months.
The economy had bottomed but recovery was not fast as the battered tourism sector, which accounts for about 12 percent of gross domestic product (GDP), has also hurt supply chains, Finance minister Arkhom Termpittayapaisith said.
“Without the COVID, our economy could have expanded 3 percent this year, he said. “As we expect a 6 percent contraction this year, there is the output gap of 9 percent,” he told a business forum.
“Next year, we expect 4 percent growth, which is still not 100 percent yet,” Arkhom said, adding it could take until 2022 to return to pre-pandemic levels.
There is still fiscal policy room to help growth from this year’s fiscal budget and some from rehabilitation spending, he said.
The budget for the next fiscal year will still focus on boosting domestic activity, Arkhom said, and the current public debt of 49 percent of GDP was manageable.
Of the government’s 1 trillion baht ($33 billion) borrowing plan, 400 billion would be for economic revival, of which about 120 billion-130 billion has been approved, Arkhom said.
He wants the Bank of Thailand to take more action short term on the baht, which continued to rise on Monday, despite central bank measures announced on Friday to rein in the currency strength.
“They have done that and they have their measures... which should be introduced gradually and more intensely,” Arkhom said.