WEEKLY ENERGY RECAP: Breaking through $40 oil

WEEKLY ENERGY RECAP: Breaking through $40 oil
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Updated 05 July 2020

WEEKLY ENERGY RECAP: Breaking through $40 oil

WEEKLY ENERGY RECAP: Breaking through $40 oil
  • The second half of the year may witness an even higher average price

Brent crude oil rebounded to a near 20-week high at $42.80 per barrel as WTI also rose to $40.32 per barrel.

Brent averaged $40 per barrel for the month of June, almost the same as for the entire first half of the year.

Oil prices have moved in a narrow band for most of the past two months as OPEC+ output cuts achieved the desired goal of bringing stability to a market threatened by volatility.

Now that another price plunge of the kind seen in April appears unlikely, the second half of the year may witness an even higher average price.

The second half of 2020 got off to a positive start for oil exporters as global demand started to recover and floating storage also began to deplete. Moreover, positive economic and jobs data from the US added to the upward momentum, more than offsetting worries about the surge in coronavirus cases in the world’s largest economy and largest consumer of crude oil.

The US Energy Information Administration reported the first drop in crude oil inventory data in four weeks. However, stocks still stand at 15 percent above the five-year average for this time of the year at 533.5 million barrels. US refineries continue to operate at a low capacity of 75.5 percent despite the supposedly “high” demand summer for gasoline.

China crude oil imports reflected an increase in buying which coincided with an improvement in the manufacturing purchasing managers’ index (PMI), which followed the easing of lockdowns.

Such positive global manufacturing data was made possible by the OPEC+ output cuts which helped to balance the market.

Saudi Arabia has led from the front in making good on its commitments to cut output. It all bodes well for the second half of 2020.


Jubail aims to build the first Saudi-made car by 2022

Engineering designs for the first Saudi-produced car by 2022 are in advanced stages. (Shutterstock/File Photo)
Engineering designs for the first Saudi-produced car by 2022 are in advanced stages. (Shutterstock/File Photo)
Updated 35 min 23 sec ago

Jubail aims to build the first Saudi-made car by 2022

Engineering designs for the first Saudi-produced car by 2022 are in advanced stages. (Shutterstock/File Photo)
  • The move comes in coordination with South Korea’s SsangYong Motor Co. through setting up a car assembly center
  • Engineering designs are in advanced stages

RIYADH: The Royal Commission in Jubail started developing the infrastructure required for attracting three global automakers, Mohammad Al-Zahrani, Director of Industrial Investment Development Department told Al-Arabiya TV, expecting the first Saudi-made car in 2022.

The move comes in coordination with South Korea’s SsangYong Motor Co. through setting up a car assembly center. Engineering designs are in advanced stages, Al-Zahrani said.

The study conducted by the Royal Commission eyes to attract almost SR40 billion ($10.67 billion) direct investments to the automotive industry by 2040, Al-Zahrani added, noting that this sector will contribute SR80 billion to the Saudi Gross Domestic Product (GDP) and provide 27,000 direct jobs.

The Kingdom’s auto complex is part of the strategic industrial plan, as Jubail Industrial City and Ras Al-Khair Industrial City provide no less than 90 percent of the raw materials used in direct automobile manufacturing, he concluded.

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