New oil price surge caps year of recovery since ‘Black Monday’

The resurgence in the oil price is partly down to improved prospects as the global economy moves outs of pandemic lockdowns. (Reuters)
The resurgence in the oil price is partly down to improved prospects as the global economy moves outs of pandemic lockdowns. (Reuters)
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Updated 21 April 2021

New oil price surge caps year of recovery since ‘Black Monday’

New oil price surge caps year of recovery since ‘Black Monday’
  • Anniversary of US crude plunging to minus-$40 at start of pandemic recession

DUBAI: Oil prices resumed their surge on global markets on Tuesday as traders shrugged off the memory of “Black Monday” 2020, when some crude prices went into negative territory at the start of the pandemic recession.
Brent crude, the global benchmark, went above $68 a barrel for the first time in over a year, while West Texas Intermediate, which approached minus-$40 at the depth of the oil crisis exactly a year ago, leapt above $64.
The resurgence in the oil price — which has seen some experts suggesting the possibility of a “supercycle” in which crude goes back above $100 a barrel — is partly down to improved prospects as the global economy moves outs of pandemic lockdowns.
The global rollout of coronavirus vaccines has led economic experts to predict a sharp recovery in growth in 2021, with the International Monetary Fund recently forecasting a sharp rise in economic activity for the rest of the year. China last week said its economy had grown by 18.3 percent in the first quarter of the year.
But oil analysts believe the actions of OPEC+ — the producers’ alliance led by Saudi Arabia and Russia —had been the biggest factor in helping reduce the huge glut of oil that threatened to swamp the world market last spring.
Since last April, OPEC+ has taken more than 3 billion barrels of oil off the global market, through a combination of strong internal discipline and voluntary cuts by Saudi Arabia, the world’s biggest exporter.
Prince Abdul Aziz bin Salman, the Saudi Energy Minister and co-chairman of OPEC+, has repeatedly urged caution on the 23-member organization as COVID-19 cases re-emerge in some parts of the world. Europe and India are the latest causes of concern.
“The reality remains that the global picture is far from even, and the recovery is far from complete,” he told the last OPEC+ meeting.
The oil price bulls are encouraged by increasing demand from China, the biggest oil consumer in the world.
Figures from the country’s customs regulator, released on Tuesday, showed that crude oil imports from Saudi Arabia — its biggest supplier — had risen by nearly 9 percent in March, with strong domestic demand bolstered by a freeing up of supplies after port congestions.
Some analysts still believe Brent crude could hit $75 this year, and reckon $100 a barrel next year is a possibility.
But nobody appears to believe the volatile market conditions of last spring, and negative oil prices, will happen again.
Robin Mills, chief executive officer of consultancy Qamar Energy, told Arab News: “That was a pretty unusual set of circumstances.”
He added: “Never say never, and traders have short memories, but I think the fixes in place would make it unlikely to go negative again.”


Jeddah Economic City: 90% of road, landscaping work done

Jeddah Economic City: 90% of road, landscaping work done
Updated 24 June 2021

Jeddah Economic City: 90% of road, landscaping work done

Jeddah Economic City: 90% of road, landscaping work done
  • The project will consist of three sectors: A financial district, a residential district and Al-Balad

JEDDAH: Jeddah Economic City — one of Saudi Arabia’s flagship megaprojects, which will include the world’s tallest tower — is nearing completion on all road construction and landscaping work, according to a senior executive on the project.

Speaking at the Urban Landscape Saudi 2021 event this week, Fady Nassim, executive head of urban planning for Jeddah Economic City, said the main goal of the 5.3-million-square-meter project is to create a habitable, economically beneficial and environmentally friendly space. “Ninety percent of the work on road construction and landscaping in the city is done,” he told delegates.

The city will consist of 210 towers that will be over 30 floors high, the centerpiece being Jeddah Tower, which will be around 1 km tall and will take over from Dubai’s Burj Khalifa as the world’s tallest building.

The project will consist of three sectors: A financial district, a residential district and Al-Balad, which will be a contemporary recreation of the old quarter of Jeddah.

Nassim said the landscaping will be done in a way that ensures plenty of green space and room for pedestrians, with less emphasis on cars and traffic.

Also speaking at the event, which was organized by the Saudi Contractors Authority, was Abdurahman Medallah, general manager for urban studies and policies at the Sharqia Development Authority.

He highlighted the fact that the rapid expansion of urban areas in the Kingdom is impacting agricultural land.

Medallah also highlighted the recently announced Saudi Green initiative, which aims to enhance rural areas and expand green areas in the Kingdom.

“Some of these targets are to increase the share of renewables, to reduce carbon emissions, to plant around 50 million trees, and to raise the percentage of protected areas to around 30 percent,” he said.


Egypt-UK trade up 8% to $722m in Q1 2021

Egypt-UK trade up 8% to $722m in Q1 2021
Updated 24 June 2021

Egypt-UK trade up 8% to $722m in Q1 2021

Egypt-UK trade up 8% to $722m in Q1 2021

CAIRO: Trade between Egypt and Britain increased 8 percent year-on-year to £519 million ($722 million) in the first quarter of 2021, said Nasser Hamed, director of the EU Administration at the Egyptian Commercial Office.

Egypt’s exports to the UK during the first quarter of 2021 amounted to about £219 million, down 1.8 percent year-on-year, while its imports from Britain amounted to about £300 million, down about 14 percent, according to the Middle East News Agency.

Hamed said British investment in Egypt amounted to about $5.3 billion, accounting for 33 percent of total European investments.

He added that Britain is the third-largest investing country in Egypt after the UAE and Saudi Arabia.

Hamed said despite the impact of the coronavirus pandemic on exports over the last year, Egyptian food exports to Britain surged by about 76 percent to £24 million, consisting mainly of molasses, vegetable oils and fats, chocolate, vegetables, fruits, nuts and spices.

He added that with gross domestic product of about £1.9 trillion and total imports in 2020 of £493 billion, the British economy offers great potential for Egyptian exporters.

Hamed said following Brexit, the terms of the Egyptian-British partnership agreement is the same as those of the European partnership agreement, except for minor differences on issues related to quotas or export seasons for some products such as grapes and strawberries.


Catalyst Partners ready to raise more funds: CEO

Catalyst Partners ready to raise more funds: CEO
Updated 24 June 2021

Catalyst Partners ready to raise more funds: CEO

Catalyst Partners ready to raise more funds: CEO

DUBAI: Mubadala-backed fund Abu Dhabi Catalyst Partners is ready to raise more capital after investing close to $1 billion over the last 18 months, its chief executive said.

The fund was set up by Abu Dhabi state fund Mubadala and US alternative asset manager Falcon Edge Capital in 2019 with $1 billion in capital.

CEO James Munce told Reuters Catalyst Partners had so far made 21 investments with an average ticket size of $50 million, with some deals investing up to $100 million.

“The plan is to go again. I think we have gone faster than expected,” Munce said in reference to adding more capital.

No decision had been made on when or how much more capital would be committed, he said.

“My view on it is this can grow to be another $1 billion and we have $2 billion deployed over the next 18 months from here. That will be a four year-track record of a $2 billion fund and we would start to get some relevance in the region,” he said.

Catalyst Partners was set up to support the development of Abu Dhabi’s ADGM financial center, which opened in 2015, while also achieving financial returns, according to its website.

Its investments have included an American financial technology startup developing blockchain tools for banks and an Abu Dhabi-based aircraft leasing firm. 


Yemeni riyal drops as Houthis renew ban on new banknotes

Yemeni riyal drops as Houthis renew ban on new banknotes
Updated 24 June 2021

Yemeni riyal drops as Houthis renew ban on new banknotes

Yemeni riyal drops as Houthis renew ban on new banknotes
  • Economists are now warning that the Houthis will use the latest measures to snoop into exchange firms and people’s lives

ALEXANDRIA: Yemen’s currency on Thursday reached a new low after the Iran-backed Houthi militia renewed its ban on banknotes printed by the Yemeni government and banned people from moving cash from government-controlled areas to their territories, Yemeni officials and economists said.

Local currency dealers said the Yemeni riyal traded at 940 against the US dollar in the black market on Thursday compared to 930 last week, shortly after the Houthi-controlled Central Bank in Sanaa circulated an order that warned people against using new money that looks like the old banknotes available in their territories.

To evade the Houthi ban and address the shortage of cash in the market, the Aden-based Central Bank of Yemen has recently pumped into the market billions of large 1,000-riyal banknotes similar to the banknotes used by the Houthis.

Local media reported that the Houthis stepped up security at their checkpoints, searching for the new banknotes.

On Thursday, Hamed Rezq, a journalist loyal to the Houthis, accused the US of launching an economic war on the Yemeni economy by allowing printing and circulating new banknotes.

“This is part of the US economic war on Yemen after Washington ran out of military options and (its) deception and political pressures have failed,” he tweeted. 
In December 2019, the Houthis banned the use of banknotes printed by the legitimate and internationally recognized government, giving residents a month to hand over their cash or face punishment.

The Houthi decision sparked outrage across Yemen, pushed up transfer charges from government-controlled areas to Houthi-ruled areas, and led to a halt in the payment of salaries to thousands of public servants.

Travelers from government-controlled areas to Sanaa told Arab News that they were forced into buying Saudi riyals or exchanging the new banknotes with old ones at inflated prices.

Economists are now warning that the Houthis will use the latest measures to snoop into exchange firms and people’s lives.

“This step will allow the Houthi group to interfere more in the work of banks, exchange companies and even ordinary citizens. Using its security grip, the group will find a justification for confiscating money and interfering in people's privacy in search of ‘fake currency’ as it describes it,” Mustafa Nasr, director of the Economic Media Center, said.

He added that the current economic war between the legitimate government and the Houthis would have implications on the country’s troubled economy and people’s lives.

Nasr also criticized the Yemeni government for printing money without coverage and its loose grip on the exchange market in the liberated provinces.

“The injection of the new cash by the Central Bank aggravates the problem in terms of inflation and it weakens the currency,” he said, advising the government to increase revenues and curb speculative activities by local money dealers in areas under its control.

“The fall of the riyal in areas under the control of the legitimate government is caused by currency speculation and corruption, not due to a real demand for currency,” Nasr said.


Saudi bourse’s 2020 net profit surged ahead of listing

Saudi bourse’s 2020 net profit surged ahead of listing
Updated 24 June 2021

Saudi bourse’s 2020 net profit surged ahead of listing

Saudi bourse’s 2020 net profit surged ahead of listing
  • Net profit rose 227 percent in 2020 from a year earlier

DUBAI: Saudi Tadawul Group, the owner and operator of the country’s stock market, said its net profit rose 227 percent in 2020 from a year earlier, while revenue more than doubled with a boost from trading commissions.
It posted a profit after zakat or Islamic tax of 500.5 million riyals ($133.5 million), it said in a statement.
Unlisted Tadawul gave a peak of its earnings ahead of a planned initial public offering later this year that will allow it to expand and strengthen its position globally.
Saudi Arabia’s stock exchange has converted itself into a holding company ahead of the listing.
Tadawul is the ninth largest exchange in the world in terms of market capitalization which stood at around $2.6 trillion, partly boosted by the listing oil giant Saudi Aramco in 2019.