Oil drops below $70 as US urges OPEC and its allies to pump more

US President Joe Biden’s top aides are pressuring the Organization of the Petroleum Exporting Countries (OPEC) and its allies to boost oil output. (Reuters/File Photos)
US President Joe Biden’s top aides are pressuring the Organization of the Petroleum Exporting Countries (OPEC) and its allies to boost oil output. (Reuters/File Photos)
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Updated 11 August 2021

Oil drops below $70 as US urges OPEC and its allies to pump more

US President Joe Biden’s top aides are pressuring the Organization of the Petroleum Exporting Countries (OPEC) and its allies to boost oil output. (Reuters/File Photos)
  • White House: OPEC+ output not enough, may harm global recovery
  • API says U.S. crude, gasoline stocks fell last week

WASHINGTON D.C.: US President Joe Biden’s top aides are pressuring the Organization of the Petroleum Exporting Countries (OPEC) and its allies to boost oil output to tackle rising gasoline prices that they see as a threat to global economic recovery.

Biden’s national security adviser Jake Sullivan criticized the world’s major oil producers for what he said were insufficient crude production levels in the aftermath of the global COVID-19 pandemic.

“At a critical moment in the global recovery, this is simply not enough,” he said in a statement.

US gasoline prices are running at about $3.18 a gallon at the pumps, up more than a dollar from last year at this time, according to the American Automobile Association.

The unusual statement ratcheted up international pressure and comes as the administration tries to contain a range of rising prices and supply bottlenecks across the economy that have fueled inflation concerns.

Biden has made recovering from the economic recession triggered by the pandemic a key priority for his administration.

The message also underscored the new dynamic between Washington and OPEC since Biden’s predecessor, Donald Trump, broke with prior practice in demanding specific policy changes to adjust prices.

Biden’s administration is pressing countries within OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other big producers, “on the importance of competitive markets in setting prices,” Sullivan said. “Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery,” he added. “OPEC+ must do more to support the recovery.”

International benchmark Brent crude was trading at around $70 a barrel on Wednesday, down half a percent, after the US issued its statement. That is lower than the prices above $77 in early July, but still represents an increase of nearly a third from the beginning of the year.


Egypt’s non-oil exports rise by 26% in year-to-October 

Egypt’s non-oil exports rise by 26% in year-to-October 
Image: Shutterstock
Updated 22 sec ago

Egypt’s non-oil exports rise by 26% in year-to-October 

Egypt’s non-oil exports rise by 26% in year-to-October 
  • Exports of chemicals and fertilizers rose by around 42 percent in the same period

Non-oil exports from Egypt reached $21.35 billion in the 10-month period to October, going up by 26 percent compared to the same period in 2020, according to a report by the country’s General Organization for Export and Import Control.

All industrial sectors recorded strong growth rates in the period despite the adverse effects of restrictions following the COVID-19 pandemic, news site Mubasher reported.

Exports of chemicals and fertilizers rose by around 42 percent in the same period, hitting $5.36 billion while sales in the food industry grew by 19 percent to reach $3.43 billion.

In addition, outgoing shipments from the engineering industry grew by 43 percent to stand at $2.65 billion for the same January-October period.

Textile exports increased by 25 percent while those of agricultural crops rose by a more modest 8 percent.

In a related development, a member in Egypt's House of Representatives said that the national economy is capable of hitting around $100 billion of exports a year, according to Al Ahram Gate.


Oil dips below $75 as investors assess omicron’s impact

Oil dips below $75 as investors assess omicron’s impact
Updated 15 min 36 sec ago

Oil dips below $75 as investors assess omicron’s impact

Oil dips below $75 as investors assess omicron’s impact

LONDON: Oil prices fell below $75 a barrel on Wednesday, taking a breather after strong gains this week, as investors assessed the impact of the omicron coronavirus variant on the global economy and fuel demand.

Brent crude futures were down 83 cents, or 1.1 percent, to $74.61 a barrel at 1113 GMT, after settling 3.2 percent higher on Tuesday.

US West Texas Intermediate crude was at $71.07 a barrel, down 98 cents or 1.4 percent, having gained 3.7 percent in the previous session.

After falling by more than 16 percent since Nov. 25 to around $69 a barrel, Brent crude prices have rebounded by over 8 percent since Dec. 1 on signs omicron has had only a limited impact on oil demand.

“Around two-thirds of the previous price slide (has) been corrected, a downswing that had been brought about by demand concerns sparked by the new omicron variant. These now appear to be exaggerated,” Commerzbank said in a note.

“There has been no noticeable slowing effect on oil demand as yet. Even aviation, the sector that should have been hit first, has seen only a marginal decrease in seating capacity.”

But reports that British Prime Minister Boris Johnson was set to tighten COVID restrictions, including advice to work from home, revived fears of a slow down in activity.

The market was also focused on rising geopolitical tensions as talks between Washington and Tehran over Iran’s nuclear program were set to resume this week as Western officials voiced dismay at sweeping Iranian demands.

An easing of US sanctions is expected to lead to higher exports of Iranian oil, which could add downward pressure on oil prices.

Meanwhile, tensions between Western powers and Russia over Ukraine also remained high after President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose “strong economic and other measures”on Russia if it invades Ukraine, while Putin demanded guarantees that NATO would not expand farther eastward.

Oil markets reacted little to US weekly inventory data.

US crude stocks fell last week while gasoline and distillate inventories rose, according to market sources citing American Petroleum Institute figures on Tuesday.

Analysts polled by Reuters forecast US crude inventory data would show a second straight weekly decline.


Saudi stock exchange has 50 IPO applications for 2022, considers SPAC listings

Saudi stock exchange has 50 IPO applications for 2022, considers SPAC listings
Updated 14 min 56 sec ago

Saudi stock exchange has 50 IPO applications for 2022, considers SPAC listings

Saudi stock exchange has 50 IPO applications for 2022, considers SPAC listings

Saudi Arabia’s stock exchange has 50 applications from companies for initial public offerings next year and is considering whether to allow blank-check companies, known as SPACs, to list, the Saudi Tadawul Group chief executive said on Wednesday.

A SPAC, or special purpose acquisition company, raises money to acquire a private firm with the purpose of taking it public and allowing the target to list more quickly on an exchange rather than via a traditional IPO.

Khalid Al-Hussan, the CEO of bourse owner and operator Tadawul, said the exchange was discussing business models and assessing appetite for SPACs in the Kingdom, but added that no legal framework had been proposed as yet.

“We are looking very closely to this recent development (about SPACs) and we absolutely look forward to add this element to our market,” Al-Hussan said after Tadawul made the debut of its shares earlier in the day.

“We have to make sure that this vehicle is in demand by the investors as well as by the issuers,” he said.

The bourse, which raised about $1 billion through an IPO, priced its shares last week at the top of the range at SR105 each. 

“As far as the market momentum, I think the markets are still very solid, in regards to IPOs. It is just a fantastic time for us,” Al-Hussan said.


LG Energy Solution eyes $10.8bn in IPO

LG Energy Solution eyes $10.8bn in IPO
Updated 42 min 34 sec ago

LG Energy Solution eyes $10.8bn in IPO

LG Energy Solution eyes $10.8bn in IPO

RIYADH: Electric vehicle manufacturer LG Energy Solution aims to raise up to 12.75 trillion won ($10.8 billion) in what could be South Korea’s biggest initial public offering, Bloomberg reported. 

The company plans to issue 34 million shares at a price between 257,000 won and 300,000 won each. 

Stock trading will begin on Jan. 27, 2022 in which retail and institutional investors can subscribe on Jan. 18 and 19, with 20 percent shares allocated to the company’s employees, the IPO prospectus showed. 

The offering is expected to bring the battery maker’s market value to 70 trillion won, to top Samsung Life Insurance’s $4.4 billion in the 2010’s IPO — the country’s largest record to date. 

LG Energy could be South Korea’s third most valuable company after Samsung SDI Co. and SK Innovation Co., which are valued at 48 trillion won and 19 trillion won, respectively. 


UAE stock exchanges shift to Monday-Friday workweek

UAE stock exchanges shift to Monday-Friday workweek
Updated 44 min 56 sec ago

UAE stock exchanges shift to Monday-Friday workweek

UAE stock exchanges shift to Monday-Friday workweek

RIYADH: The UAE stock market will start operating from Monday to Friday in January, following the government’s decision to shift its working week.

From Jan. 3, the bourse will run trading sessions from 10 a.m. to 3 p.m. Gulf Standard Time, Monday to Friday.

“The decision is made to invest in the competitiveness of the UAE economy and to enhance productivity,” Abdulrahman Al-Awar, director general of the Federal Authority for Government Human Resources, told Bloomberg.  

The new workweek will align the country with Western markets.