Goldman expects oil prices to hit $90 by year-end as supply tightens

Goldman expects oil prices to hit $90 by year-end as supply tightens
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Updated 27 September 2021

Goldman expects oil prices to hit $90 by year-end as supply tightens

Goldman expects oil prices to hit $90 by year-end as supply tightens
  • Hurricane Ida's hit to supply has more than offset OPEC+'s production ramp-up since July with non-OPEC+ and non-shale production continuing to disappoint
  • Brent futures hit a near three-year high last week on global output disruptions

Goldman Sachs raised its forecast for year-end Brent crude oil prices to $90 per barrel from $80, as a faster fuel demand recovery from Delta variant and Hurricane Ida's hit to production led to tight global supplies.

Brent futures hit a near three-year high last week as global output disruptions have forced energy companies to pull large amounts of crude out of inventories.

Oil prices were trading at $79.19 a barrel, earlier on Monday, while U.S. West Texas Intermediate (WTI) crude were at $75.08 a barrel. 

"While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts," Goldman said in a note dated Sept. 26.

Earlier this month, the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, agreed to stick to its decision made in July to phase out record output cuts. 

Hurricane Ida's hit to supply has more than offset OPEC+'s production ramp-up since July with non-OPEC+ and non-shale production continuing to disappoint, Goldman said.

Hurricane Ida and Nicholas, which swept through the U.S. Gulf of Mexico earlier this month, damaged platforms, pipelines and processing hubs, shutting most offshore production for weeks. 

Goldman, however, flagged a potential new virus variant, which could weigh on demand and an aggressively faster ramp-up in OPEC+ production that may soften its projected deficit, as key risks to its bullish outlook.

For 2022, the bank lowered its average forecasts for the second and fourth quarter to $80/bbl from $85/bbl as it factored in the possibility of an Iran-U.S. nuclear deal by next April.


Saudi developer Al Akaria settles $142m loan with Riyad Bank

Saudi developer Al Akaria settles $142m loan with Riyad Bank
Updated 10 sec ago

Saudi developer Al Akaria settles $142m loan with Riyad Bank

Saudi developer Al Akaria settles $142m loan with Riyad Bank

RIYADH: Saudi Real Estate Co., also known as Al Akaria, said that it made an early payment to settle the remaining balance of its SR535 million ($142 million) loan with Riyad Bank.

This came as part of the developer's plan to reduce lending and financing costs, the company reported in a bourse filing. 

This will boost the financial solvency of the company and enhance its financial position, it added.


UAE producing near to its maximum oil production capacity: Energy minister

UAE producing near to its maximum oil production capacity: Energy minister
Updated 27 June 2022

UAE producing near to its maximum oil production capacity: Energy minister

UAE producing near to its maximum oil production capacity: Energy minister

ABU DHABI: The UAE is producing near to its maximum oil production capacity based on its current OPEC+ production baseline, Emirates News Agency (WAM) reported on Monday.

“In light of recent media reports, I would like to clarify that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline (3,168 mbopd) which UAE is committed by until the end of the agreement,” Suhail bin Mohammed Al-Mazrouei, Emirati Minister of Energy and Infrastructure, said.

 


NEOM awards London-based Keller major piling contract for ‘The Line’

NEOM awards London-based Keller major piling contract for ‘The Line’
Updated 27 June 2022

NEOM awards London-based Keller major piling contract for ‘The Line’

NEOM awards London-based Keller major piling contract for ‘The Line’

RIYADH: Saudi Arabia’s $500-billion project NEOM has awarded UK’s Keller a major piling contract for “The Line,” a 170-km megacity being developed within the Kingdom’s flagship project. 

Starting in the west at the Gulf of Aqaba and terminating at the NEOM International Airport within the upper valley region, The Line is subdivided into around 135 modules, according to a statement. 

Each module contains eight buildings founded on large diameter bored piles. 

Keller had signed an umbrella framework agreement with respect to the project, and is mobilizing for an anticipated first works order on a portion of Module 40 which has an expected value to Keller of around £50 million ($61.5 million), with the work anticipated to be completed within the next 12 months.

Listed on the London Stock Exchange, Keller is an independent geotechnical solutions specialist.


NEOM, McLaren Racing partner to drive innovation in electric motorsport

NEOM, McLaren Racing partner to drive innovation in electric motorsport
Updated 27 June 2022

NEOM, McLaren Racing partner to drive innovation in electric motorsport

NEOM, McLaren Racing partner to drive innovation in electric motorsport

RIYADH: NEOM, one of Saudi Arabia’s flagship projects, has partnered with McLaren Racing to drive innovation and talent development in electric motorsport, according to a statement. 

With the partnership, NEOM becomes the title partner of the McLaren Formula E and Extreme E racing teams, which brings the two electric race series together under the banner of NEOM McLaren Electric Racing.

“Our partnership with McLaren Racing complements NEOM’s commitment to driving sustainable solutions and tackling some of society's most pressing challenges,” CEO Nadhmi Al-Nasr said. 

“The partnership will allow us to share our collective resources and experience to yield exciting results, not only for our own organizations, but also for the broader automotive and sports industries,” he added. 

McLaren will be located within OXAGON’s Research and Innovation Campus, which will provide cutting edge facilities and collaboration spaces. 

During 2023, McLaren and NEOM will create a bespoke program to nurture engineers and students, in line with the mega project’s commitment to develop Saudi talent. 


Thailand to seek fertilizer supply from Saudi producers

Thailand to seek fertilizer supply from Saudi producers
Updated 27 June 2022

Thailand to seek fertilizer supply from Saudi producers

Thailand to seek fertilizer supply from Saudi producers

RIYADH: Thailand is planning to negotiate with Saudi Arabia for the supply of fertilizers as the country is currently facing a shortage, especially due to the high cost of imports.

The Thai Chamber of Commerce will coordinate with Saudi suppliers and a business event is to be held between three major Saudi-based fertilizer suppliers and Thai importers on June 29, Thai local media reported citing Commerce Minister Jurin Laksanawisit.

Laksanawisit added that two Saudi suppliers were recently provided permission to sell fertilizers to Thailand.

Thailand heavily relies on imports for its fertilizers, with only 8 percent coming from domestic sources and a usage of about 5 million tons of fertilizer a year, according to the minister.

The country’s overall demand for fertilizer from Saudi Arabia is about 808,000 tons, the media report noted citing industry statistics.