WEEKLY ENERGY RECAP: Oil prices on an upward momentum this year despite new lockdowns in Europe

WEEKLY ENERGY RECAP: Oil prices on an upward momentum this year despite new lockdowns in Europe
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Updated 09 January 2021

WEEKLY ENERGY RECAP: Oil prices on an upward momentum this year despite new lockdowns in Europe

WEEKLY ENERGY RECAP: Oil prices on an upward momentum this year despite new lockdowns in Europe
  • The Brent crude oil price has surpassed $55 per barrel for the first time since February 2020 and closed the week nearly at $56 per barrel

This is the first weekly energy recap for 2021, and oil prices are on an upward momentum.

The Brent crude oil price has surpassed $55 per barrel for the first time since February 2020 and closed the week nearly at $56 per barrel.

West Texas Intermediate (WTI) crude futures have unexpectedly breached the $50 barrier for the first time since early 2020 and have closed the week at $52.24 per barrel despite the relatively unchanged market fundamentals.

The bullishness in the market that drove oil prices higher came amid the prospects for a deeper fiscal stimulus in the US, vaccine optimism and a weaker US dollar.

The US Energy Information Administration’s (EIA) large bullish draw to crude oil inventories by the end of 2020 and the bullish outcome from the OPEC+ first meeting in 2021 also contributed to the price increase.

The global stock rallies and gains in the US index futures likewise must have pushed the prices higher.

It is obvious that oil prices moved up, building on recent strong gains in stock markets with the three major US indexes pushing into record territory.

Clearly, stock market traders were unfazed by the chaos on Capitol Hill.

Oil prices have risen despite the new lockdowns in Europe that further delayed the prospects for demand recovery.

The outlook for colder-than-normal weather for Europe and the northern hemisphere should be supporting higher demand for heating oil as people turn up the heat during the lockdown. However, this factor is yet to clearly materialize on the petroleum refining margins. 

Although the year 2021 started with expectations for low oil prices, these hopes might be dashed as the prices have started to rise unexpectedly.

The most bullish outlook for oil price was for Brent crude prices to hit the $60-per-barrel barrier in the second quarter of 2021.

A sharp recovery in oil demand before the end of the first half of 2021 is driven by expectations of vaccine rollouts.

However, the EIA predicted Brent and WTI to average $48.53 and $45.78, respectively, in 2021. The EIA’s oil price outlook seems to be extremely bearish.

Speculators’ activities in the coming weeks will contribute to the near-term movement in oil prices.The recovery from the pandemic will accelerate once vaccines become widely available.

Until then, speculators might be completely wrong-footed with an unexpected oil price momentum despite bearish fundamentals.

At the same time, the vaccination drive and the economic stimulus will set the tone for oil demand recovery in 2021 with the year 2020 ending on a bullish note after a rollercoaster ride caused by the global coronavirus disease (COVID-19) pandemic.

The latest figures from the Commodity Futures Trading Commission (CFTC) for the first week of 2021 shows that crude futures’ “long positions” on the New York Mercantile Exchange (NYMEX) are at 678,712 contracts, rising by +24,677 contracts from the previous week (1,000 barrels for each contract).


SABB reports profit of $750 million in first 9 months of 2021

 SABB reports profit of $750 million in first 9 months of 2021
Updated 12 sec ago

SABB reports profit of $750 million in first 9 months of 2021

 SABB reports profit of $750 million in first 9 months of 2021
  • The chairman reiterated the bank’s efforts to support Saudi’s Vision 2030 plan

The Saudi British Bank (SABB) recorded a seismic leap of 157 percent in net profit after Zakat and income tax of SR2.8 billion ($750m) for the first 9 months of 2021, compared to the loss of SR4.8 billion in the same period last year. 

“It is worth reiterating that we are in the investment phase of our newly announced five-year strategic plan, where we will be taking the necessary steps to develop the Bank into an institution fit to meet the future needs of our customers,” chairman of SABB, Lubna Olayan, said.

“We are investing considerably across the business front-to-back, to ensure that we remain relevant and can create a sustainable banking organization,” she added.  

The chairman reiterated the bank’s efforts to support Saudi’s Vision 2030 plan and unlock the opportunities brought by the economic transformation plans. 


Qatar Energy to launch green bonds in 2022; state commits to emissions reduction

Qatar Energy to launch green bonds in 2022; state commits to emissions reduction
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Updated 10 min 38 sec ago

Qatar Energy to launch green bonds in 2022; state commits to emissions reduction

Qatar Energy to launch green bonds in 2022; state commits to emissions reduction

RIYADH: Qatar Energy is looking to raise between $5 to $10 billion from issuing green bonds, banking sources told CNBC Arabia.

Qatar Energy is developing an environmental framework in collaboration with global investment banks, including Goldman Sachs, to move into the green bond market in conjunction with the global trend towards reducing carbon emissions, sources said.

The offering is expected to take place in the first quarter of 2022 or by the end of June 2022, sources added.

Separately, Reuters reported that the Ministry of Environment and Climate Change in Qatar launched a national climate change action plan aimed to reduce greenhouse gas emissions by 25 percent by 2030.

The plan also envisioned reducing "carbon intensity" of its liquefied natural gas facilities by 25 percent by the same year.

Qatar's move follows other Gulf Arab states, including Saudi Arabia which announced its net-zero emission target by 2060 ahead of the COP26 climate change summit in Glasgow next week.


Qatar is the world’s largest producer of liquefied natural gas and aims to expand LNG production to 127 million tonnes annually by 2027. It says its gas production helps combat climate change globally because it can help the world shift from high-polluting fuels like oil and coal to renewable energies.


Saudi Arabia will welcome a million cruise ship passengers by 2028, Cruise Saudi MD claims

Saudi Arabia will welcome a million cruise ship passengers by 2028, Cruise Saudi MD claims
Updated 28 October 2021

Saudi Arabia will welcome a million cruise ship passengers by 2028, Cruise Saudi MD claims

Saudi Arabia will welcome a million cruise ship passengers by 2028, Cruise Saudi MD claims

A million cruise ship passengers will visit Saudi Arabia by 2028 according to ambitious plans set out by the managing director of the country’s Cruise Saudi company.

Fawaz Farooqui set out the goal during a session at the Future Investment Initiative Forum in Riyad, as he also claimed 50,000 direct and indirect jobs will be created by the industry by 2035.

He also pledged that five cruise ports will operate in Saudi Arabia by 2025.

Farooqui added that plans for Cruise Saudi had been hampered by the pandemic, and said: “Our plan was to bring the first cruise passenger in 2023, but the pandemic hit and many unfortunate incidents happened to the industry.”

Farooqui’s comments came just days after Cruise Saudi became a member of the World Travel & Tourism Council as the Kingdom continues its drive to diversify its economy away from oil as per the Vision 2030 agenda.


‘Like fire and nuclear, there must be rules for AI,’ says leading tech voice

‘Like fire and nuclear, there must be rules for AI,’ says leading tech voice
Updated 28 October 2021

‘Like fire and nuclear, there must be rules for AI,’ says leading tech voice

‘Like fire and nuclear, there must be rules for AI,’ says leading tech voice

Humanity needs rules for dealing with artificial intelligence (AI) in the same way it learned to manage fire and nuclear technology, one of the sector’s up and coming voices has claimed.

Bruno Maisonnier, founder and CEO of AI firm AnotherBrain, admitted there was a danger with the new technology, but that is no different from every major discovery since the dawn of man.

Speaking at the Future Investment Initiative Forum in Riyad, Maisonnier said: “There’s risk with AI as well as there are risk with every new technology, that’s part of human history 

“We brought fire and people died from fire, we brought nuclear and people died from that . 

“Each time we have the same reaction: First we fear and then we start to put the feedback and learn and put rules to get the positive out of this technology

“The same goes with AI. The question is when do we have to set these rules?

“Rules must be put but first we must allow the evolution to happen.”

Also speaking at the forum, Pascal Weinberger, CEO and co-founder of tech firm Bardeen AI, insisted that machines will never be able to fully replace humans in many environments.

“There are a lot of things that machines are better at than humans, and vice versa — especially at common sense,” he said.


Nokia's quarterly profit beats on 5G demand

Nokia's quarterly profit beats on 5G demand
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Updated 28 October 2021

Nokia's quarterly profit beats on 5G demand

Nokia's quarterly profit beats on 5G demand
  • The company expects comparable operating profit margin to be towards the upper end of the target range of 10 percent to 12 percent

Nokia reported a stronger-than-expected third-quarter operating profit on Thursday on higher demand for 5G gear, but warned the global shortage of semiconductors would hit its supply chain.


Shares of the Finland-based company were up 5 percent as investors lauded its efforts to get back on track following product missteps last year by riding on 5G demand and taking market share away from rivals, particularly in China.


Any problem in supplying to customers on time might dent those ambitions.


"At the moment, we are limited by semiconductor availability, that will affect Q4 and it's quite possible that this challenge will get bigger before it starts getting better," Chief Executive Officer Pekka Lundmark said in an interview.


Global producers of goods from televisions to cars have faced a host of supply chain issues ranging from a shortage of vital components, manpower, logistics snarls, and delays at plants because of power cuts in China.


Rival Ericsson last week also warned of supply chain issues.


"We are working every single day with the suppliers on all levels of the organisation and I have also been personally involved in these discussions," Lundmark said.


Nokia's quarterly net sales rose 2 percent to 5.4 billion euros ($6.27 billion) from 5.3 billion a year ago, in line with analysts' expectations.


The company expects comparable operating profit margin to be towards the upper end of the target range of 10 percent to 12 percent


Comparable operating profit during July-September surged to 633 million euros from 486 million last year, beating the 488 million euros forecast by 11 analysts polled by Refinitiv.


While its mainstay mobile network business suffered from lost business in the United States, network infrastructure grew 6 percent in constant currency and cloud and network services rose 12 percent.


"The 5G market is still growing and we expect that it will still take a couple of years before it reaches its peak," Lundmark said


In July, Nokia won its first 5G radio contract in China, while rival Ericsson lost market share after Sweden last year decided to ban Chinese vendors from their 5G networks.


Lundmark said revenue from China has started to flow in but the available market there for non-Chinese vendors was limited.