WEEKLY ENERGY RECAP: IEA sees oil demand rebound in second half of 2021

WEEKLY ENERGY RECAP: IEA sees oil demand rebound in second half of 2021
Motorists fill their cars at one of the few remaining gas stations that still has fuel in Arlington, Virgina, on May 13, 2021. (AFP)
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Updated 16 May 2021

WEEKLY ENERGY RECAP: IEA sees oil demand rebound in second half of 2021

WEEKLY ENERGY RECAP: IEA sees oil demand rebound in second half of 2021

Oil prices continue the weekly upward momentum for the third week in a row with flat fluctuations. At the end of the week, both benchmarks moved up with the same magnitude, trading in the upper $60s. Brent crude price rose by $0.43 to $68.71 per barrel. West Texas Intermediate rose by $0.47 to $65.37 per barrel.

OPEC’s monthly oil market report came with two surprises, one bearish and one bullish. The bearish surprise was that the organization reported a surprising surge in commercial oil inventories, increasing by 10 million barrels month-on-month in March 2021 — 13.5 million barrels higher than the same time a year ago and 37.8 million barrels above the latest five-year average.

The bullish surprise was that OPEC reported a huge drop in non-OPEC oil and gas investments in exploration and production in 2020. At $311 billion, it is the lowest seen for 15 years and is expected to remain unchanged in 2021. This is compared to the high level of $718 billion seen in 2014.

OPEC’s oil demand outlook was unchanged from last month’s estimate, averaging 96.5 million barrels per day (bpd) despite indications of a global economic recovery, central banks’ assertion of an environment of low interest rates and the continuing program of asset purchases. On the supply side, OPEC crude oil production rose by 70,000 bpd in April and hit a three-month high of 24.96 million bpd.

On the other hand, the International Energy Agency (IEA) monthly oil market report predicted a slight downward adjustment to oil demand outlook, down from 96.7 million bpd to 96.4 million bpd. The downward revision was due to lower global refining throughput amid weaker consumption in Europe and North America in the first quarter and the lower oil demand in India in the second quarter as a result of the surge in coronavirus disease (COVID-19) cases.

• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter: @faisalfaeq


STC Solutions signs $53.66m NEOM data centre contracts

STC Solutions signs $53.66m NEOM data centre contracts
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Updated 24 October 2021

STC Solutions signs $53.66m NEOM data centre contracts

STC Solutions signs $53.66m NEOM data centre contracts

RIYADH: The Arabian Internet and Communications Services Co. (Solutions by STC) on Sunday signed several contracts with the Saudi Telecom Company to build a modern data center in NEOM, according to a stock exchange filing.

The contracts, valued at SR201.3 million, will contribute to the establishment of the data center’s infrastructure, cloud platform and other applications.

The project aims to design and build digital solutions for NEOM Telco Park’s digital platform as well as data center support starting from the concept to project delivery. 

It also includes data center campus enablement, system integration, infrastructure services, and physical security solutions, digital platform enabling NEOM to provide private cloud services to its customers, solutions and technology maintenance and support.

The project delivery and implementation will be within one year starting from the contract signing date, involving support services for three years.


Bank shares lead 0.77% TASI fall: Market wrap

Bank shares lead 0.77% TASI fall: Market wrap
Updated 24 October 2021

Bank shares lead 0.77% TASI fall: Market wrap

Bank shares lead 0.77% TASI fall: Market wrap

RIYADH: Declining bank shares led a fall of the Tadawul All-Share Index, which was down 91 points on Sunday, or 0.77 percent, closing at 11,848,05 points.

221.4 million of shares changed hands in 323,000 deals.

Al Rajhi Bank fell 3 percent to SR137.80, amid trading of about four million shares, The bank’s net profit for Q3 2021 increased 43 percent year-on-year to SR3.794 billion.

Riyad Bank, Banque Saudi Fransi, Sulaiman Al Habib, Bank Albilad, Almarai, Maaden, Arab National Bank and Thob Al Aseel declined between 1 percent and 3 percent.

Dallah Health Services Company obtained a long term, Sharia-compliant 10-year bond financing from Al-Rajhi Bank, with a value of SR900 million to support the company's strategic plan for future acquisitions and expansions, according to a filing.

The parallel Nomu index decreased by 225.2 points, or 0.95 percent, to close at 23,505.27 points. The liquidity amounted to about SR18.4 million.

Yanbu Cement slumped 2 percent to SR38, The cement producer reported earlier a net profit of SAR 36.4 million in Q3 2021, a fall of 56 percent Year on year. 


Telecom Egypt to obtain $500 financing from 11 banks

Telecom Egypt to obtain $500 financing from 11 banks
Updated 24 October 2021

Telecom Egypt to obtain $500 financing from 11 banks

Telecom Egypt to obtain $500 financing from 11 banks
  • The banks involved in the transaction include First Abu Dhabi Bank, Mashreq Bank, Bank of Jordan, and the Arab Bank of Bahrain

Telecom Egypt has signed a financing agreement with 11 allied banks to obtain a $500 million medium-term syndicated loan. 

The banks involved in the transaction include First Abu Dhabi Bank, Mashreq Bank, Bank of Jordan, and the Arab Bank of Bahrain. 

“International Financial Institutions trusted us in the past three years, and it enabled Telecom Egypt to obtain a syndicated loan again estimated at EGP7.8 billion ($500 million),” Adel Hamed, director and chief executive officer of Telecom Egypt, said.

 


Italy has ‘high expectations’ for Saudi, Middle East green initiatives: Italian deputy foreign minister

Italy has ‘high expectations’ for Saudi, Middle East green initiatives: Italian deputy foreign minister
Updated 24 October 2021

Italy has ‘high expectations’ for Saudi, Middle East green initiatives: Italian deputy foreign minister

Italy has ‘high expectations’ for Saudi, Middle East green initiatives: Italian deputy foreign minister
  • Manlio Di Stefano calls for more EU funding of Middle Eastern green energy schemes

ROME: Italy had “high expectations” about the Saudi Green Initiative and Middle East Green Initiative events in Riyadh along with the Kingdom’s engagement in green energy production, a leading Italian MP has said.

Manlio Di Stefano will be representing his government at the Middle East Green Initiative Summit being held in the Saudi capital, and he told Arab News that his country attached “a lot of importance to this event.”

The 40-year-old Italian undersecretary (deputy minister) for foreign affairs and international cooperation is from the Five Star Movement, the populist party founded by comedian Beppe Grillo which has been central to the last three years of coalition government in Italy.

After graduating in computer engineering in Sicily, Di Stefano worked as an IT consultant for an American company and was a volunteer for an Italian NGO operating in the Democratic Republic of Congo and Guatemala working on sustainable development projects.

He said: “We believe this is the time where at a global level every country has to put some effort into engaging with climate change.”

The politician pointed out that promoting green energy was a “means to create a market, to create infrastructure, to create the storytelling about climate change, where it is taking place, and the solutions to tackle it.

“This event in Riyadh will be focused on how to tackle the situation with solutions and therefore we’re ready to support it,” he added.

Di Stefano noted that Italy was one of the leading European countries in terms of its energy production links with the Middle East and North Africa region and said the EU should provide more funding to Middle Eastern countries, such as Egypt, to help finance environmental protection schemes.

He added that Italy and Egypt had collaborated on a number of projects and that the strategic interconnection was important to his country.

“We have to work more with countries that can generate renewable energy in the future. We have a lot of projects going on in northern Africa and Middle Eastern countries for energy production.

“And we think that Italy could play a strategic role in that, because we can really bridge the MENA region with the northern part of Europe, where there may not be so many green energy capabilities.

“Saudi Arabia, and this has been stated very clearly by that government, is really pushing a lot on green energy production, and Italy is at the forefront with our own industries,” he said.

Di Stefano expected cooperation between Italy and Saudi Arabia, already strong through the G20 Troika, to develop further.

“I think we can do more because there is a huge complementarity among our countries which sometimes is undervalued. We are obviously really set on European values and market characteristics, and we ask for the same understanding when we deal with other countries. Nonetheless, this is a bilateral relationship that is fundamental for us.

“Saudi Arabia is one of the most important countries in the MENA region, and Italy already has good cases of cooperation, such as in the G20. When we come together at the table, we are talking the same language,” he added.


China aims to cut fossil energy use to below 20% by 2060

China aims to cut fossil energy use to below 20% by 2060
Updated 24 October 2021

China aims to cut fossil energy use to below 20% by 2060

China aims to cut fossil energy use to below 20% by 2060

BEIJING: China is targeting an ambitious clean energy goal of reducing fossil fuel use to under 20 percent by 2060, according to an official plan published by state media on Sunday.

The document follows a pledge by President Xi Jinping to wean the country off coal, with a target of peaking carbon emissions by 2030 and achieving carbon neutrality 30 years later.

But the country has been criticized for pushing ahead with opening dozens of new coal power plants.

Authorities have also been looking to ramp up production with coal prices surging and supplies running low in recent days, both factors behind power outages.

But on Sunday, China’s official Xinhua news agency laid out a host of targets in its path towards carbon neutrality.

Among them was the proportion of non-fossil fuel consumption reaching around 25 percent of total energy use by 2030 — when the nation targets peak emissions.

By then, carbon dioxide emissions per unit of gross domestic product would have dropped by more than 65 percent from 2005 levels, while the total installed capacity of wind and solar power is targeted to reach more than 1.2 billion kilowatts, Xinhua said.

The guidelines also reiterated an earlier aim for carbon emissions per unit of GDP to fall 18 percent in 2025, from 2020 standards.

China faces a struggle to wean itself off coal, which fuels nearly 60 percent of its energy-hungry economy.

Economic planners are nervous about slashing coal too quickly as it could cripple growth.

While China said in an earlier statement that President Xi intended to “strictly control” the growth of coal power plants, it also signaled a continued increase in the next few years, saying coal consumption would start to gradually reduce from 2026.