Euro zone downturn deepened in January as lockdowns hit services

Euro zone downturn deepened in January as lockdowns hit services
Coronavirus cases have been soaring again and governments across the continent have renewed tough lockdown measures. (File/AFP)
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Updated 03 February 2021

Euro zone downturn deepened in January as lockdowns hit services

Euro zone downturn deepened in January as lockdowns hit services
  • In Britain, outside the European Union, a third national coronavirus lockdown has put the economy on course for a sharp contraction in early 2021

LONDON: The euro zone’s economic downturn deepened in January as renewed restrictions to quell the spread of the coronavirus hit the bloc’s dominant service industry hard, offsetting a robust performance by manufacturers, a survey showed on Wednesday.
Coronavirus cases have been soaring again and governments across the continent have renewed tough lockdown measures, clamping down on public life and forcing hospitality and entertainment venues to close their doors.
IHS Markit’s final January Composite Purchasing Managers’ Index (PMI), seen as a good guide to economic health, fell to 47.8 from December’s 49.1 but was a touch above a flash reading of 47.5. Anything below 50 indicates a contraction.
“Today’s data support our view that the euro zone economy has started the new year on the back foot,” said Melanie Debono at Capital Economics.
“With the vaccine rollout stalling already and new virus strains circulating, the risks to our forecasts for a recovery to start near the end of Q2 are firmly to the downside.”
A PMI covering the service industry fell to 45.4 from December’s 46.4 but came in higher than the 45.0 flash reading. A manufacturing PMI on Monday showed factory growth remained robust at the start of the year but the pace waned.
Business activity across the German service sector contracted for a fourth month running in January as a stricter lockdown hit businesses and put Europe’s largest economy on track for a first-quarter contraction.
Meanwhile, French service sector activity slowed, albeit not as much as initially thought, weighing on broader private sector business. Italy and Spain also saw services activity shrink.
In Britain, outside the European Union, a third national coronavirus lockdown has put the economy on course for a sharp contraction in early 2021, but services companies — buoyed by progress on vaccinations — were confident about recovery.
“Their optimism is warranted, given that the UK’s vaccination program is proceeding speedily,” said Samuel Tombs at Pantheon Macroeconomics.
The euro zone economy contracted 0.7% last quarter, official data showed on Tuesday, and a January Reuters poll predicted it would take up to two years for the economy to return to pre-COVID-19 levels.
With venues closed, demand for services unsurprisingly fell. The new business index dropped to 45.4 from 46.6, albeit ahead of the 44.7 flash estimate.
But amid hopes the vaccines being rolled out would allow for some return to normality, overall optimism about the year ahead remained resilient. The composite future output index only nudged down to 64.2 from December’s 64.5, which was the highest since April 2018.


OPEC+ likely to be cautious on oil demand at upcoming meeting

OPEC+ likely to be cautious on oil demand at upcoming meeting
Image: Shutterstock
Updated 10 sec ago

OPEC+ likely to be cautious on oil demand at upcoming meeting

OPEC+ likely to be cautious on oil demand at upcoming meeting
  • Opec+ is a group consisting of both Opec and some of the world's largest non-Opec oil exporting nations

RIYADH: The OPEC+ group is likely to take a cautious stance when deciding next week whether to go ahead with planned production increases following the discovery of a new COVID-19 variant has emerged, Geneva-based oil trader Vitol Group said. 

The new variant, named Omicron, has rattled the oil market globally, pushing prices down to their biggest decline since April 2020. 

There are signs that demand may be weakening in some markets going into the winter months in Asia and Europe, said Mike Muller, the head of the Asia unit at Vitol, as reported by Bloomberg.

The new coronavirus variant will probably lead to more flight cancellations this week, he said.

Several countries have tightened travel restrictions against a number of African countries, following the discovery.

Opec+ is a group consisting of both Opec and some of the world's largest non-Opec oil exporting nations.

“OPEC+ have erred on the side of caution,” Muller said on a weekly webinar by Dubai consultancy Gulf Intelligence.

“Post facto they’ve proven to be right. It is likely they will take into account these fundamentals and the possibility of a demand hit over the winter months.”

OPEC and its partners, including Russia, will meet next week to discuss whether it will implement a planned production increase of 400,000 barrels per day.

 


Qatar’s wealth fund might acquire $7bn gas assets from UK’s National Grid: CNBC

Qatar’s wealth fund might acquire $7bn gas assets from UK’s National Grid: CNBC
Image: Shutterstock
Updated 41 min 53 sec ago

Qatar’s wealth fund might acquire $7bn gas assets from UK’s National Grid: CNBC

Qatar’s wealth fund might acquire $7bn gas assets from UK’s National Grid: CNBC
  • Goldman Sachs and Barclays are advising National Grid on the sale

RIYADH: Qatar Investment Authority (QIA),  the country’s sovereign wealth fund, may acquire assets of the UK’s National Grid, which operates electricity and natural gas transmission networks, CNBC Arabia reported, citing two unnamed sources.

QIA was part of a consortium of investors that acquired about 61 percent of the British company's gas pipeline assets five years ago.

Now the Qatari fund is competing with other global investment funds, including Macquarie and Equitix, to acquire the gas assets in an estimated $7 billion deal, the sources said. 

Goldman Sachs and Barclays are advising National Grid on the sale, the report added.

This comes amid a protracted energy crisis that has affected the UK and Europe significantly in recent months amid the disruption of global supply chains. 

The country earlier announced it reached an agreement with Qatar to secure its gas needs or 40 percent of the UK’s total energy mix. 

National Grid has a primary listing on the London Stock Exchange and a secondary listing in the form of its American depositary receipts on the New York Stock Exchange.


Amazon to open Abu Dhabi fulfilment centre by 2024, says govt media office

Amazon to open Abu Dhabi fulfilment centre by 2024, says govt media office
Updated 28 November 2021

Amazon to open Abu Dhabi fulfilment centre by 2024, says govt media office

Amazon to open Abu Dhabi fulfilment centre by 2024, says govt media office

 Amazon has partnered with Abu Dhabi Investment Office (ADIO) to establish a fulfilment centre by 2024 to be built in accordance with the company's carbon-reduction strategies, the Abu Dhabi government's media office said on Sunday


The project will create thousands of jobs, boosting Abu Dhabi's logistics sector and retail ecosystem and will be in line with the UAE's ambition to achieve net-zero emissions by 2050, the media office added.


Gulf countries to establish integrated industrial strategy: Bahraini minister

Gulf countries to establish integrated industrial strategy: Bahraini minister
Updated 28 November 2021

Gulf countries to establish integrated industrial strategy: Bahraini minister

Gulf countries to establish integrated industrial strategy: Bahraini minister

Countries in the Gulf Cooperation Council (GCC) are planning to set up an integrated industrial strategy, Bahraini Minister of Industry, Commerce and Tourism Zayed Alzayani said.

This will be done by creating a unified “Gulf strategy for industry,” Asharq Al-Awsat reported, citing him.

The Gulf countries are also trying to increase dependence on each other instead of importing raw materials from abroad, which Alzayani said could create jobs, diversify economies, and expand their exporting values. 

He added the region is heading towards the formation of a customs and economic union by 2025, and the integrated industrial system will help the Gulf to stand among global conglomerates as a single bloc.

When combined, Gulf countries are the 12th largest economy globally, the minister said, adding their aim to be among the top 10 biggest economies in the world.

 


Lebanon launches second licensing round for 8 offshore oil, gas blocks 

Lebanon launches second licensing round for 8 offshore oil, gas blocks 
Image: Shutterstock
Updated 28 November 2021

Lebanon launches second licensing round for 8 offshore oil, gas blocks 

Lebanon launches second licensing round for 8 offshore oil, gas blocks 
  • The US is mediating between Lebanon and Israel, who are technically at war, to resolve the dispute

RIYADH: Lebanon has launched the second licensing round for eight offshore oil and gas blocks after two years of delay.

The government had agreed to launch the second round in April 2019 but it was postponed due to the pandemic, Bloomberg reported.

The US is mediating between Lebanon and Israel, who are technically at war, to resolve the dispute over about 860 square kilometers of water.

The deadline for applications is June 15, according to the Lebanese Petroleum Administration.