Oil eases but stays near $70 on demand optimism

Oil eases but stays near $70 on demand optimism
Oil prices have rebounded since OPEC+ producers decided to extend production cuts last week. (AFP)
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Updated 12 March 2021

Oil eases but stays near $70 on demand optimism

Oil eases but stays near $70 on demand optimism
  • Crude records seven weeks of gains
  • OPEC sees recovery focused on H2

SINGAPORE: Brent crude prices eased on Friday but hovered near $70 a barrel as production cuts by major oil producers constrained supply, with optimism about a recovery in demand for the resource in the second half of the year also lending support.
Brent crude futures for May slipped 33 cents, or 0.5 percent, to $69.30 a barrel in early trade while US West Texas Intermediate crude for April was at $65.65 a barrel, down 37 cents, or 0.6 percent.
After seven straight weeks of gains, front-month Brent could close this week little changed as investors took profit after prices touched a 13-month high on Monday following attacks on Saudi Arabian oil facilities.
Sentiment was also buoyed by the decision of the Organization of Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, earlier this month to largely hold production cuts in April.
Investors have been pumping funds into commodities such as oil on expectations of a demand recovery in the second half of the year as the global economy grows, while a wider rollout of vaccines against the COVID-19 pandemic allows more people to travel this summer.
“Assuming vaccination programs are successful, we expect pent-up demand for gasoline to be released this summer during the US and European driving season,” FGE analysts said in a note.
RBC Capital analysts said the fundamentals for summer gasoline is the most bullish in nearly a decade.
“We think this will support the entire oil complex this summer and beyond.”
OPEC said on Thursday a recovery in oil demand will be focused on the second half of the year.
The United States, world’s largest oil consumer, saw a massive draw on US gasoline stocks last week as the winter storm in Texas disrupted refining output.
Oil prices sustained at higher levels are expected to draw US producers to increase output, JP Morgan analysts said in a weekly note.
“At current prices, most US onshore operators are economic, leaving a vast group of operators, from large public companies to private players, in good position to ramp up activity in 2H21 and build solid momentum for higher volumes in 2022,” JP Morgan said.
The bank now expects US crude oil production to average 11.78 million barrels per day (bpd) in December 2021, up 710,000 bpd annually, with the full year volume to average 11.36 million bpd compared with 11.32 million bpd in 2020.


Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
Updated 10 min 45 sec ago

Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
  • Lira slips 0.7% on announcement
  • Inflation could reach 19% before mid-year

ISTANBUL: Turkey’s central bank held rates steady at 19 percent as expected on Thursday and dropped a pledge to tighten policy further if needed, in its first decision since President Tayyip Erdogan fired the hawkish former governor and sparked a market selloff.
In a statement, the bank also ditched last month’s pledge to “decisively” maintain a tight monetary policy “for an extended period” to address inflation, which has risen above 16 percent and been in double-digits for most of the last four years.
The lira slipped as much as 0.7 percent to 8.125 versus the dollar after the bank under new governor Sahap Kavcioglu replaced the hawkish guidance with a softer assessment of risks to inflation that analysts said signaled interest rate cuts were on the way.
Erdogan’s shock removal last month of Kavcioglu’s predecessor Naci Agbal, a respected policy hawk, sent foreign investors fleeing from Turkish assets on concerns that rates would be quickly slashed.
But Kavcioglu — who had previously criticized Agbal’s rate hikes — has since promised no abrupt changes. Those assurances as well as the more-than 10 percent lira selloff had convinced analysts that policy would remain steady for now.
The central bank said it maintained a tight stance in the face of lofty inflation expectations, adding rates would remain above inflation until it is clear that price pressure is easing.
John Hardy, FX strategy head at Saxo Bank, said the currency had weakened on Thursday because Agbal’s pledges were scrapped.
“Any daylight they see, they are going to want to cut rates. Holding them here (today) is just an acknowledgment they can’t get away with it for now,” he said.
In a Reuters poll, most economists had predicted no change to the one-week policy rate this week, but saw easing from around mid-year, to settle at 15 percent by year-end.
Last month, the central bank under Agbal had raised rates by a more-than-expected 200 basis points to levels last touched in mid-2019 to dampen inflation and support the currency.
Before taking the job, Kavcioglu had said such a policy was wrong for Turkey and also espoused Erdogan’s unorthodox view that high rates cause inflation.
Erdogan has repeatedly called for monetary stimulus to help the economic rebound. He has fired three bank chiefs in two years, eroding monetary credibility.
The lira plunged 15 percent immediately after Agbal’s dismissal before a rebound, and foreign investors dumped the most bonds and stocks in 15 years over the following week.
Depreciation boosts inflation via imports, delaying any rate cut plans, analysts say.
Inflation is expected to reach as much as 19 percent before mid-year. Yet few analysts see another rate hike given Erdogan’s repeated calls for stimulus — including one this month for single-digit rates.
The change in tone under Kavcioglu reflects “preparation being made to cut the policy rate,” said Haluk Burumcekci of Istanbul-based Burumcekci Consulting.
Ratings agencies say premature easing could again hammer the lira and raise risks of a balance-of-payments crisis given Turkey’s depleted FX reserves and its $160 billion in short-term foreign debt.
Citing sources, Reuters reported Erdogan ousted Agbal in part because he was uncomfortable with the bank’s investigation into some $128 billion in FX sales undertaken during his son-in-law Berat Albayrak’s stint as finance minister.


Emirates begins trials of IATA’s digital travel pass

Emirates begins trials of IATA’s digital travel pass
Updated 15 April 2021

Emirates begins trials of IATA’s digital travel pass

Emirates begins trials of IATA’s digital travel pass
  • Passengers from Dubai to Barcelona on flight EK 185 on Thursday trialed the travel pass

DUBAI: Dubai carrier Emirates airline has started testing the COVID-19 digital travel pass, a mobile application that will help passengers manage their necessary travel requirements amid heightened security due to the pandemic.

Passengers from Dubai to Barcelona on flight EK 185 on Thursday trialed the travel pass, according to a company statement.

“The ability to process passengers’ COVID-19 relevant data for travel digitally will be the way forward,” Adel Al-Redha, chief operating officer of Emirates, said, as the global aviation industry slowly gets back up from the pandemic slump.

The airlines partnered with the maker of the travel pass, the International Air Transport Association (IATA), to integrate the standardized process of verifying documents such as COVID-19 rest results and vaccination certificates into the airline’s operations.

The trial is ongoing on selected Emirates flights from the Dubai to Barcelona and London Heathrow to Dubai, and will be expanded soon to include other routes, the company said.

Other airlines in the region have teamed up with IATA to conduct trial runs of the application, including Saudi Arabia’s Saudia and Abu Dhabi’s Etihad Airways.


Moody’s warns on ESG risks for some structured finance assets

Moody’s warns on ESG risks for some structured finance assets
Updated 15 April 2021

Moody’s warns on ESG risks for some structured finance assets

Moody’s warns on ESG risks for some structured finance assets
  • Sustainable investing has become a hot topic in Gulf markets over the last year with increased awareness in part springing from the coronavirus pandemic

DUBAI: Changing regulations and consumer demand driven by environmental, social and governance (ESG) issues means that some structured finance asset classes are riskier than others, according to Moody’s Investors Service.

Aircraft and tobacco asset-backed securities (ABS) as well as project finance and infrastructure collateralized debt obligations (CDOs) have “moderate vulnerability” to environmental risk, while most other asset classes have “low” environmental risk, Moody’s wrote in a report.
Student loan asset-backed securities are the only structured finance sector with “high” social risk, it said.
“Environmental and social risks vary across structured finance asset classes, reflecting the sector’s diverse array of transaction types and assets,” according to Moody’s Vice President Inga Smolyar. “Governance considerations, in contrast, are generally issuer specific.”
Sustainable investing has become a hot topic in Gulf markets over the last year with increased awareness in part springing from the coronavirus pandemic. Demand for ethical and sustainable investments is now on the rise and increasingly being adopted by a wide range of investors from socially aware individuals to family offices and sovereign wealth funds.
The Future Investment Initiative Institute’s “The Neo-Renaissance: Mobilizing ESG for a Sustainable Future” conference takes place online today between 3.30 p.m. and 5.30 p.m. Riyadh time.
Several high profile regional business leaders are due to speak at the event including Saudi Arabia’s Public Investment Fund Governor Yasir Al-Rumayyan who also chairs the institute.


Top 20 Saudi Ramadan electronics deals

Top 20 Saudi Ramadan electronics deals
Updated 15 April 2021

Top 20 Saudi Ramadan electronics deals

Top 20 Saudi Ramadan electronics deals
  • From smartphones to smart TVs

If you are looking to buy a new smartphone, TV or laptop, electronics items have some of the biggest discounts available this Ramdan. Here is a selection of some of the best deals available online and instore this week across the Kingdom, hand picked by Arab News editors.

Lenovo K12 Note

Lenovo K12 Note

NOW: SR569

WAS: SR899

SAVING: 36%

Available from Carrefour

Huawei Y8P

NOW: SR699

WAS: SR849

SAVING: 17%

Available from Carrefour

Samsung Galaxy A51

Samsung Galaxy A51

NOW: SR949

WAS: SR1199

SAVING: 21%

Available from Carrefour

iPhone 11 Pro 256GB

NOW: SR3999

WAS: SR4799

SAVING: 16%

Available from Carrefour

iPad 8th generation (2020)

iPad 8th generation (2020)

NOW: SR1499

WAS: SR1699

SAVING: 11%

Available from Carrefour

Ikon Tab-e learning tablet

NOW: SR399

WAS: SR549

SAVING: 27%

Available from Lulu

Ikon Portable bluetooth speaker

NOW: SR349

WAS: SR450

SAVING: 22%

Available from Lulu

Samsung 65-Inch Curved Smart QLED TV QA65Q8C Black

Samsung 65-Inch Curved Smart QLED TV QA65Q8C Black

NOW: SR6499

WAS: SR16999

SAVING: 61%

Available from noon.com

65 Inch UHD Smart Netflix Ready TV NETV65SM1 Black

NOW: SR2099

WAS: SR4669

SAVING: 55%

Available from noon.com

58 Inch UHD Smart Netflix Ready TV NETV58SM1 Black

NOW: SR1699

WAS: SR3779

SAVING: 55%

Available from noon.com

LG 65-Inch 4K UHD Smart AI ThinQ LED TV 65UN7340 Black

LG 65-Inch 4K UHD Smart AI ThinQ LED TV 65UN7340 Black

NOW: SR3199

WAS: SR5999

SAVING: 46%

Available from noon.com

Class pro 40-Inch Full HD LED TV BK40FHD Black

NOW: SR599

WAS: SR999

SAVING: 40%

Available from noon.com

Xiaomi Mi Wi-Fi IP Day/Night Vision Dome 2MP 1080P FHD Stand Alone Camera

Xiaomi Mi Wi-Fi IP Day/Night Vision Dome 2MP 1080P FHD Stand Alone Camera

NOW: SR134

WAS: SR199

SAVING: 32%

Available from noon.com

10000 mAh Boost+ Power Bank Qualcomm Quick Charge 3.0 Fast Charging & PD (Small Size For Mobiles, Laptop, Tablets, Nintendo) Black

NOW: SR 37

WAS: SR 99

SAVING: 62%

Available from noon.com

Goui 30000 mAh Econ.30 Power Bank 5x9.9x3cm Black/Green

Goui 30000 mAh Econ.30 Power Bank 5x9.9x3cm Black/Green

NOW: SR149

WAS: SR299

SAVING: 50%

Available from noon.com

Energizer 10000 mAh Fast Charge Power Bank Dual USB- Pack of 2 Titanium Grey

NOW: SR 89

WAS: SR 150

SAVING: 40%

Available from noon.com

MacBook Pro With Touch Bar And Touch ID, 13.3-Inch Display

MacBook Pro With Touch Bar And Touch ID, 13.3-Inch Display, Core i5, 8th Generation, 4 Ghz Quad Core Processor/8GB RAM/512GB SSD/Intel Iris Plus Graphics 645/Retina Display, English Keyboard-2020 Space Grey

NOW: SR6499

WAS: SR 10078.60

SAVING: 35%

Available from noon.com

Rockstar Games Red Dead Redemption 2 (English) - Intl Version - Adventure - PlayStation 4 (PS4)

NOW: SR109.55

WAS: SR247

SAVING: 55%

Available from noon.com

EA FIFA 20: Standard (SPL) Edition (KSA- English/Arabic) - PlayStation 4 (PS4)

NOW: SR66.6

WAS: SR101

SAVING: 34%

Available from noon.com

Sony DualShock 4 Wireless Controller For PlayStation 4

Sony DualShock 4 Wireless Controller For PlayStation 4

NOW: SR147

WAS: SR315.56

SAVING: 53%

Available from noon.com


Qatar steps up help for businesses battling pandemic

Qatar steps up help for businesses battling pandemic
Updated 15 April 2021

Qatar steps up help for businesses battling pandemic

Qatar steps up help for businesses battling pandemic
  • Central bank liquidity support to local banks has been extended
  • Loan repayment holidays have been extended to 2 years

DUBAI: Qatar’s cabinet on Wednesday agreed to maintain central bank liquidity support for local banks as it stepped up its economic response to the coronavirus pandemic amid a second wave of infections.

Exemptions have been granted from electricity and water fees until the end of September for sectors closed due to the pandemic, Gulf Times reported.

The National Guarantees Programme at Qatar Development Bank has been extended until the end of September, while an exemption from interest under the National Guarantees Programme has been extended by one year to two years, followed by two years of interest at no more than the Qatar Central Bank rate plus 2 percent.

Qatar Central Bank first implemented a series of measures including a freeze on loan repayments and the National Guarantees Programme to provide financing to private-sector companies in March 2020.