OPEC+ members agree to raise output by 400,000 barrels a day from August

OPEC+ members agree to raise output by 400,000 barrels a day from August
The OPEC+ group agreed new production allocations from May 2022. (Aramco/File)
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Updated 19 July 2021

OPEC+ members agree to raise output by 400,000 barrels a day from August

OPEC+ members agree to raise output by 400,000 barrels a day from August
  • Special meeting also saw agreement on new baseline levels, extension of current strategy until the end of 2022

DUBAI: OPEC+, the oil producers alliance led by Saudi Arabia and Russia, has agreed a schedule of output increases to meet growing demand as the global economy recovers from the pandemic recession.

A special meeting arranged in Vienna endorsed the plans, which will see an extra 400,000 barrels a month come on to world markets from the beginning of next month, and will allow some producers — including Saudi Arabia and the UAE — to increase the baseline from which they calculate production.

The deal will also extend the current OPEC+ alliance beyond its original term next April until at least the end of 2022. “OPEC+ is here to stay,” Prince Abdul Aziz bin Salman, the Saudi energy minister, told journalists after the deal was announced.

We are working with the UAE, and we see eye to eye with them.

Prince Abdul Aziz bin Salman, Saudi energy minister

On the negotiations that ended the deadlock of last week when an OPEC+ meeting was canceled, the prince said: “Consensus-building is an art.”

The successful conclusion will allay suggestions in some quarters of a split in OPEC+ ranks. Suhail Al-Mazrouei, the energy minister of the UAE, said: “I can confirm the UAE is committed to OPEC+ and will always work with it and within it. We’ll always remain very good friends.”

Prince Abdulaziz underlined the unity in the group when he read a message from Alexander Novak, deputy prime minister of Russia and OPEC+ co-chairman, which stated that Russia was “ready to support anything” the Saudi minister said to the meeting.

“There is no way to demonstrate trust any more than this,” the prince said.

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Under the new terms, output will increase by 400,000 barrels per month until the full production cut of 5.8 million barrels is returned to global markets.

The regime of monthly meetings of OPEC+ ministers to monitor global markets will continue until the end of next year, but the producers hope to be able to phase out all cuts by September 2022, OPEC+ said.

In addition, the baseline calculations for production adjustment will be reassessed, and new ones will take effect from next May.

The UAE will see its baseline rise from 3.17 million barrels per day (bpd) to 3.5 million bpd — satisfying its main concern about the new proposals. Saudi Arabia and Russia will both see their baselines rise from 11 million bpd to 11.5 million bpd. Iraq and Kuwait will also be allowed to produce more.

OPEC+ said that there was an “ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling as the economic recovery continued in most parts of the world as vaccination programs accelerated.”

I can confirm the UAE is committed to OPEC+.

Suhail Al-Mazrouei, UAE energy minister

The meeting also stressed the “critical importance” of adhering to full conformity with the new levels, and compensating by the end of September for any past overproduction. Compliance in June was once again historically high, at 113 percent.

The Saudi and UAE ministers stressed that they were working together on the strategy to advance energy transition via the adoption of renewables and other cleaner fuels and technologies. “We are working with the UAE, and we see eye to eye with them. We’re going about it in exactly the same way,” Prince Abdulaziz said.

The deal — which ends a period of uncertainty in global oil markets — was welcomed by energy experts.

Robin Mills, chief executive of Qamar Energy consultancy, told Arab News: “This is a good deal for OPEC+. It holds the deal together and addresses the baseline issue for the future from all the countries that had issues. The countries that didn’t get baseline increases probably couldn’t have used them anyway.”

International oil markets last traded on Friday, with Brent ending at $73.30 per barrel. The next OPEC+ meeting, the 20th time the alliance ministers have met, will take place on Sept. 1.


John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia

John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia
Updated 6 sec ago

John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia

John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia
  • Kerry will “engage with government counterparts and private sector leaders on climate crisis

LONDON: US climate envoy John Kerry will travel to Saudi Arabia on Sunday to take part in the Middle East Green Initiative Summit.

During his two-day visit to the Kingdom, Kerry will “engage with government counterparts and private sector leaders on efforts to address the climate crisis,” the State Department said.

Kerry’s meetings will “bolster the United States’ bilateral and multilateral climate diplomacy” ahead of the COP26 climate summit in Glasgow that starts on Oct. 31.

Saudi Arabia will host the inaugural Saudi Green Initiative Forum and Middle East Green Initiative Summit in Riyadh on Oct. 23-25.

The environmental initiatives were launched in March by Crown Prince Mohammed bin Salman. Together they aim to plant 50 billion trees in the region and reduce Middle East carbon emissions by 60 percent.


NEOM’s green hydrogen plant to operate in 2026: Air Product’s CEO

NEOM’s green hydrogen plant to operate in 2026: Air Product’s CEO
Updated 21 October 2021

NEOM’s green hydrogen plant to operate in 2026: Air Product’s CEO

NEOM’s green hydrogen plant to operate in 2026: Air Product’s CEO
  • Seifi Ghasemi noted that the project is the biggest in the world and that it is the first time for the company to handle a project with this scale, echoing a similar comment from ACWA Power CEO to Arab News. 

NEOM’s green hydrogen plant will start operations in 2026, the chief executive officer of Air Products & Chemicals revealed in an interview with Alarabiya.

The project will export hydrogen in the form of liquid ammonia to the world market for use as a biofuel that feeds transportation systems.

Seifi Ghasemi noted that the project is the biggest in the world and that it is the first time for the company to handle a project with this scale, echoing a similar comment from ACWA Power CEO to Arab News. 

This comes amid the Kingdom’s directions towards green energy. 

 


US jobless claims fall; Turkey’s central bank slashes interest rate again: Economic wrap

US jobless claims fall; Turkey’s central bank slashes interest rate again: Economic wrap
Updated 21 October 2021

US jobless claims fall; Turkey’s central bank slashes interest rate again: Economic wrap

US jobless claims fall; Turkey’s central bank slashes interest rate again: Economic wrap

Americans applying for jobless benefits declined to 290,000 in the week ending 16 October, compared to the previous seven day's 296,00 claims, official data showed. 

This is the lowest level since March 2020 as job hirers hold on to their employees as a result of worker shortages.

Turkish interest rate falls once more

The Turkish Central Bank decided to cut its interest rate again from 18 percent to 16 percent, despite rising inflation and a depreciating currency. 

This decision came after the president renewed calls to alleviate borrowing costs to promote economic growth. Economists considered this confirmation of the bank's loss of independence as the president sacked the last three central bank governors.

South Korea's exports

Based on data released by its customs agency, South Korea's exports jumped in the first 20 days of October by 36.1 percent compared to a year earlier, while imports soared by 48 percent, causing a provisional trade deficit of $2.49 billion.

Exports rose the most for petroleum products and vessels as they leapt by 128.7 percent and 93.5 percent respectively.

The data showed that exports to China, the United States and the European Union increased during this period by 30.9, 37.1 and 42.1 percent respectively.

Sub-Saharan Africa’s recovery at risk 

The IMF said that the weak vaccination rollouts in sub-Saharan Africa could setback the region’s economic recovery in the coming period.

While higher commodity prices and favorable harvests were beneficial for some countries, the overall outlook is pessimistic as the region is likely to considerably lag behind developed countries.

The international organization expects sub-Saharan economic growth to be 3.7 percent in 2021 and 3.8 percent in 2022. 

Russia’s producer prices

Russian producer prices went up by a 26.3 percent annual rate in September, official data revealed. This is the lowest level since March and was mainly driven by a 41.4 percent surge in costs of raw materials extraction and a 25.4 percent jump in manufacturing costs.

China’s investments abroad

China's non-financial outbound direct investment (ODI) grew by 2.4 percent in the first nine months of 2021 compared to the same period last year to reach $80.78 billion, the commerce ministry said.

Ukraine’s interest rate 

The Central Bank of Ukraine kept the interest rate on hold at 8.5 percent. However, the bank said there was a possible chance to increase the rate in December if needed to manage rising inflationary pressures.


TASI closes 0.3 percent higher at 11,940 points: Market Wrap

TASI closes 0.3 percent higher at 11,940 points: Market Wrap
Updated 21 October 2021

TASI closes 0.3 percent higher at 11,940 points: Market Wrap

TASI closes 0.3 percent higher at 11,940 points: Market Wrap

RIYADH: The Tadawul All-Share Index was up 35 points on Thursday, or 0.3 percent, closing at 11,939,58 points.

Some 202.4 million of shares changed hands in 305,000 deals.

Al Rajhi Bank, SABIC and Saudi Aramco rose by 1 percent.

Baazeem was the top gainer, rising 5.6 percent, to SR124.80, with about 2.2 million shares traded.

Sulaiman Al Habib jumped 5.2 percent, to SR178.20.

Alinma Bank, Arab Sea, Sipchem and Saudi National Bank recorded their highest closings since the listing.

The parallel market index “Nomu” decreased by 719.49 points, or 2.94 percent, and closed at 23730.47 points. The liquidity amounted to about SR15.6 million.

Makkah Construction declined 1.9 percent to SR77.10. In Q3 2021, the company recorded a net profit of SR12 million.

NADEC and National Gypsum closed at SR34.95 and SR46.80, respectively.


Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap

Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap
Updated 21 October 2021

Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap

Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap

RIYADH: Leading cryptocurrencies have mirrored Bitcoin’s gains with strong performances in the past 24 hours.

Ethereum and Solana are up more than 10 percent, after Bitcoin surged above $66,000 on Wednesday.

Edan Yago, the lead contributor to the Bitcoin DeFi protocol Sovryn, said: “As big as Bitcoin is now, it’s a mere fraction of what it will be.

“An entire borderless economy will be powered by sound money. An economy far larger than our current global economy. Why? Bitcoin finally brings property rights and economic access to billions of people.”

 Ruud Feltkamp, CEO of cloud-based automated crypto trading bot Cryptohopper predicted that Bitcoin’s value will continue to grow.

“As expected, Bitcoin reached its all time high. It’s expected that the long volatile route to the top starts now, where I expect Bitcoin’s peak around Christmas. We often see that when Bitcoin makes a move, the altcoins follow in the two weeks after, which could explain the latest surge in Ethereum and Solana,” he said.

Trading
 

Bitcoin, the leading cryptocurrency in trading internationally, traded lower on Thursday, falling by 0.55 percent to $65,286 at 4:49 pm Riyadh time.

Ether, the second most traded cryptocurrency, traded at $4,251 up 6.74 percent, according to data from Coindesk.