Oil approaches three-year high as China dips into reserves

Oil approaches three-year high as China dips into reserves
Supply disruption in the Gulf of Mexico could last for months. (Reuters)
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Updated 24 September 2021

Oil approaches three-year high as China dips into reserves

Oil approaches three-year high as China dips into reserves
  • Brent near its highest since October 2018
  • China makes first public sale of state crude

Oil prices rose on Friday, nearing a three-year high, and were headed for a third weekly gain amid continued US supply disruptions.

Brent crude advanced 0.3 percent to $77.45 at 4:38 p.m. Riyadh time, while WTI, the US benchmark, was 0.1 percent higher at $73.35.

This week’s upward momentum was barely interrupted by China’s first public sale of state crude reserves.

Ongoing disruptions in US Gulf Coast production following Hurricane Ida and other storms could last for months and have led to large inventory drawdowns in the US and globally.

US oil refiners looking to replace crude from the Gulf of Mexico have been turning to Iraqi and Canadian oil, while Asian buyers have been pursuing Middle Eastern and Russian grades, analysts and traders told Reuters.

Some OPEC+ members have struggled to raise output because of under-investment or delays to maintenance work during the pandemic.

Brent oil prices could hit $80 a barrel by the end of September, analysts at UBS said in a research note.

Gains were briefly interrupted by China’s first public sale of state oil reserves. State-owned PetroChina and private refiner and chemical producer Hengli Petrochemical bought four cargoes totalling about 4.43 million barrels, sources with direct knowledge of the auction told Reuters.

An energy crunch continued in Europe as some Shell gas stations ran out of fuel in the UK. A shortage of truck drivers forced BP to close some filling stations this week, sparking concern among some consumers that they would be unable to fill up.

Germany’s E.ON will take on customers from a Lower Saxony firm that has decided to quit gas sales as prices have tripled in Europe this year. Surging gas prices have hit consumers worldwide and have squeezed out a number of companies in Britain.


Inflation in eurozone economies is transitory: IMF

Inflation in eurozone economies is transitory: IMF
Image: Shutterstock
Updated 13 sec ago

Inflation in eurozone economies is transitory: IMF

Inflation in eurozone economies is transitory: IMF
  • The reason the IMF gave this assessment is that the hikes in consumer prices didn’t turn into wage increases

Despite inflation hitting a record high last month in the euro area, the International Monetary Fund said that the rise in prices is transitory and not worrisome.

Annual inflation rate in the zone reached 4.9 percent in November, Reuters reported.

The reason the IMF gave this assessment is that the hikes in consumer prices didn’t turn into wage increases, also known as the second-round effect.

It pointed out that, meanwhile, monetary policy should remain loose.

The international lender also stated that governments in the euro area should continue backing their economies to overcome the adverse effects initiated by the pandemic. The organization added that fiscal consolidation is not urgent, but its plans should be readily available now.

“Policies should remain accommodative but become increasingly targeted, with a focus on mitigating potential rises in inequality and poverty,”the IMF said.

I took a quote from the source since it's reuters.


Bahrain aims to reduce government shares in listed companies

Bahrain aims to reduce government shares in listed companies
Updated 2 min 47 sec ago

Bahrain aims to reduce government shares in listed companies

Bahrain aims to reduce government shares in listed companies

JEDDAH: Bahrain aims to reduce government ownership in listed companies, the CEO of the Bahrain Bourse has said.

The country aims to list more governmental companies to encourage the private sector to follow the lead. 

At least two governmental firms are currently close to listing, including the Bahrain Airport Company,  Khalifa Al Khalifa added in an interview with Al Arabiya.

Bahrain Bourse has also reached an agreement with Abu Dhabi to facilitate direct trading between the two markets.

It is also implementing a four year strategy ending in 2026, to develop the financial market sector by listing more companies, including small and medium-size enterprises, Al Arabiya reported.


Oil prices exceed $70 pushing aside omicron concerns

Oil prices exceed $70 pushing aside omicron concerns
Image: Shutterstock
Updated 9 min 54 sec ago

Oil prices exceed $70 pushing aside omicron concerns

Oil prices exceed $70 pushing aside omicron concerns
  • Meanwhile, companies made offers on Monday to buy crude oil released from US strategic reserves

JEDDAH: Oil prices rose to $70 a barrel earlier on Dec. 7, as concerns eased about market demand and as fears of the omicron variant waned, Bloomberg reported.

Brent crude futures were up $1.66, or 2.3 percent, at $74.74 a barrel by 1005 GMT, after settling 4.6 percent higher on Monday.

US West Texas Intermediate crude was at $71.30 a barrel, up $1.81, or 2.6 percent, building on a 4.9 percent gain in the previous session.

At the weekend, Saudi Arabia increased the cost of its crude for buyers in Asia and the US, signaling that it still sees strong demand despite the wave of restrictions by various national governments in response to the latest variant of the COVID-19.

Meanwhile, companies made offers on Monday to buy crude oil released from US strategic reserves, according to Bloomberg.

The winning bids for the first 32 million barrels will be announced on Dec. 14. 


At least two oil refiners have expressed interests. 

The US release of crude is part of the Biden administration’s efforts to control gasoline prices, Bloomberg said.


UAE bank credit falls for first time since May; deposits rise

UAE bank credit falls for first time since May; deposits rise
Updated 14 min 55 sec ago

UAE bank credit falls for first time since May; deposits rise

UAE bank credit falls for first time since May; deposits rise

Gross credit in the UAE declined by a monthly rate of 0.8 percent in October to hit 1.76 trillion dirhams ($480 billion) on falls in both domestic and foreign credit, according to data published by the country’s central bank.  

The October decline in gross credit is the largest since March and is in contrast to September's performance, when it rose 0.3 percent month-on-month. 

Domestic credit went down due to drops related to the government, public, and private sectors. Credit provided to non-banking financial institutions rose by 2.7 percent, the central bank said in a press release issued Dec. 6.

In September, domestic credit increased by 0.2 percent to 1.6 trillion dirhams, while foreign credit, which includes loans, trade bills and advances to non-resident companies other than banks, grew 0.8 percent to 164.4 billion dirhams. 

Bank deposits in the UAE went up by a monthly rate of 1.3 percent in October to hit 1.97 trillion dirhams. This was the fifth consecutive month of growth and is the highest monthly rate since June.

This was mainly attributed to a 1.7 percent rise in residential deposits, offsetting a 1.7 percent drop in non-residential deposits. 

Outside of residential deposits, government and public sectors experienced the highest increases, jumping by 5.5 percent and 3 percent, respectively. At the same time, private sector deposits edged up slightly, rising by only 0.6 percent.

The monthly rate of growth in deposits accelerated from 0.7 percent recorded in September when resident deposits grew 0.3 percent to 1.7 trillion dirhams while non-resident deposits jumped 3.7 percent to 243.2 billion dirhams.    

The central bank also said that the gross banks’ assets increased by 0.7 percent in October when compared to the previous month. The balance stood at 3.27 trillion dirhams by the end of the month.

The UAE’s monetary base, which includes currency issued and bank reserves among others, grew by 1.3 percent month-on-month in October. This was driven by widenings in both issued currency and banks’ current accounts and overnight deposits with the central bank.

Moreover, M1, a monetary aggregate encompassing currency outside banks and short-term monetary deposits, underwent a 0.5 percent monthly increase in October. This was attributed to jumps in both of its components.

Additionally, a wider measure of money, M2, rose by 0.8 percent on more quasi-monetary deposits and a higher M1. Quasi-monetary deposits consist of residential time and savings deposits in local currency in addition to residential deposits in foreign currencies.

Similarly, M3 increased due to larger government deposits as well as higher M1 and M2.


High gas prices may delay energy transition: TotalEnergies CEO

High gas prices may delay energy transition: TotalEnergies CEO
Updated 32 min 15 sec ago

High gas prices may delay energy transition: TotalEnergies CEO

High gas prices may delay energy transition: TotalEnergies CEO

JEDDAH: High fossil fuel prices may affect the transition towards renewable energy sources, the leader of one of Europe’s largest oil companies has warned.

If fuel prices continue to remain high, this “might jeopardize the development” of alternatives, said TotalEnergies SE CEO Patrick Pouyanne, according to Bloomberg.

“Some Asian countries about to switch from coal to gas might be discouraged by too high energy prices,” he added, while speaking at the World Petroleum Congress on Monday. 

Pouyanne made the comments as Saudi Aramco CEO Amin Nasser warned that renewable energy supplies are not yet strong enough to compete with fossil fuels. 

On Sunday, Aramco increased the cost of its crude for January in an indication that demand outlook will remain high, Bloomberg said.

On Tuesday, US crude oil rose $2 to hit $71.52.