Oil prices drop after OPEC+ decision despite omicron fears: Daily Virus Update

Oil prices drop after OPEC+ decision despite omicron fears: Daily Virus Update
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Updated 03 December 2021

Oil prices drop after OPEC+ decision despite omicron fears: Daily Virus Update

Oil prices drop after OPEC+ decision despite omicron fears: Daily Virus Update
  • Since August, the group has been adding an additional 400,000 barrels per day

DUBAI: Oil prices dropped on Thursday as OPEC+ decided to stick to plans to increase production by 400,000 barrels per day in January.

The drop came after Brent crude futures rose $1.24, or 1.8 percent, to $70.11 by 0748 GMT, having eased 0.5 percent in the previous session.

US West Texas Intermediate (WTI) crude futures gained $1.13, or 1.7 percent, to $66.70 a barrel, after a 0.9 percent drop on Wednesday.

December 02

Global oil prices have lost more than $10 a barrel since last Thursday, when news of omicron first shook investors.

The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, will likely decide on Thursday whether to release more oil into the market as previously planned or restrain supply.

Since August, the group has been adding an additional 400,000 barrels per day (bpd) of output to global supply each month, as it gradually winds down record cuts agreed in 2020.

The new variant, though, has complicated the decision-making process, with some observers speculating OPEC+ could pause those additions in January in an attempt to slow supply growth.

December 01

The OECD warned Wednesday that the omicron coronavirus variant threatens the global economic recovery as it lowered the growth outlook for 2021 and appealed for a swifter rollout of COVID-19 vaccines.

The global economy is now expected to expand by 5.6 percent this year, down from an earlier forecast of 5.7 percent, the OECD said in its updated economic outlook

 Nigeria’s public health authorities said Wednesday that the new COVID-19 variant, omicron, was identified in samples from three passengers travelling to the continent’s most populous country from South Africa.

“Genomic surveillance has now identified and confirmed Nigeria’s first cases of the B.1.1.529 SARS-CoV-2 lineage, now known as the omicron variant,” the head of Nigeria’s Centre for Disease Control, Ifedayo Adetifa, said in a statement.

Earlier, the UK’s health secretary, Sajid Javid, said it was likely the vaccines would remain effective against serious disease from the new variant. He added it could be two more weeks before more was known about the variant.

Japan has asked airlines to stop taking new incoming flight bookings over concerns about the virus variant.

“We have asked airlines to halt accepting all new incoming flight reservations for one month starting December 1,” a transport ministry official told AFP, adding that existing bookings would not be affected.

Oil prices rose more than 3 percent on Wednesday, recouping a big chunk of the previous session’s steep losses, as major producers prepared to discuss how to respond to the threat of a hit to fuel demand from the omicron variant of the coronavirus.

Brent crude futures rose $2.46, or 3.6 percent, to $71.69 a barrel at 0742 GMT, after rising to as high as $71.95 earlier in the day.

The benchmark had slumped 3.9 percent on Tuesday.

US West Texas Intermediate (WTI) crude futures rose $2.13, or 3.2 percent, to $68.31 a barrel, after a 5.4 percent drop on Tuesday.

The Organization of the Petroleum Exporting Countries (OPEC) will meet on Wednesday after 1300 GMT and ahead of a meeting on Thursday of OPEC+, which groups OPEC with allies including Russia.

November 30

Amid speculations on the impact of omicron on oil demand, the Saudi energy minister said it was too early to tell, adding OPEC+ was keen to monitor the situation.

The group of oil-producing countries has rescheduled its meetings to later this week to have more time in assessing the impact, Prince Abdulaziz bin Salman, told Arab News in an Aramco ceremony in Dhahran on Monday.

Earlier, Russian Deputy Prime Minister Alexander Novak said, there is “no need for emergency measures in the oil market.”

He added OPEC+ partners did not call to review the current deal.

Oil prices rebounded on Monday after a huge slump last week, which was led by fears brought by the new coronavirus variant.

Brent crude futures climbed $3.11, or 4.3 percent, to $75.83 a barrel by 0355 GMT, after falling $9.50 on Friday.

U.S. West Texas Intermediate (WTI) crude was up $3.47, or 5.1 percent, at $71.62 a barrel, having tumbled $10.24 in the previous session.

Oil prices plunged more than 10 percent on Friday, their biggest one-day drop since April 2020,  as the new variant spooked investors across financial markets.

There are worries the new variant could derail the global economic recovery, potentially hurting oil demand, while it has also added to concerns that a supply surplus could swell in the first quarter.

Economists at Goldman Sachs outlined four scenarios that could happen as the world cautiously navigates the situation. 

If omicron turns out to transmit faster than its predecessor, Delta, it will result in first-quarter global growth slowing to a 2 percent quarter-on-quarter annual rate.

The economists said if both the disease severity and immunity against hospitalizations are worse than for Delta, global economic growth will take a more substantial hit, but inflation impact will be “ambitious.”

On a slightly positive note, if omicron spreads slower than delta, it will have no significant effect on global growth and inflation, Goldman Sachs said.

If the new variant is more transmissible, but causes less severe disease, global growth could be higher than Goldman’s baseline.

November 29

Most Gulf stock markets ended lower on Sunday, with the Saudi and Dubai indexes suffering their biggest single-day fall in nearly two years as fears of a potentially vaccine-resistant coronavirus variant spooked investors.

Opinion

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The World Health Organization on Friday designated the omicron coronavirus variant detected in South Africa as being “of concern” — the fifth variant to be given that designation

Saudi Arabia’s benchmark index slid 4.5 percent, dragged down by a 5.4 percent fall for Al Rajhi Bank and a 6.2 percent decline for Saudi Basic Industries.

The Kingdom halted flights from and to Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands on Sunday owing to concerns related to the spread of the new COVID-19 strain, state news agency SPA reported on Twitter.

The latest pandemic developments also sent oil prices, a key catalyst for the Gulf’s financial markets, plunging by $10 a barrel on Friday for their largest one-day drop since April 2020. The new variant added to concerns that an oil supply surplus could swell in the first quarter.

“It’s obvious that traders are concerned about the implications of the newly mutated virus which brings back the lock-down memories from last year. If Saudi decides to impose more restrictive measures the economy will be impacted significantly and the growth prospects next year will vanish”, Mohammed Al-Suwayed, chief executive officer of Razeen Capital, said. He said the time is now suitable for investors to reinvest in the market since the share prices are relatively low.

Dubai’s main share index declined 5.2 percent, its biggest intraday fall since March 2020, with most stocks in negative territory.

Blue-chip developer Emaar Properties plunged 9.4 percent and budget carrier Air Arabia retreated by 7.1 percent.

In Abu Dhabi, the index fell 1.8 percent, weighed down by a 3.3 percent drop for telecoms company Etisalat and a 1.4 percent decline for First Abu Dhabi Bank, the country’s largest lender.

The UAE has suspended entry for travelers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana and Mozambique from Nov. 29 over concerns about the new coronavirus variant, the state news agency reported on Friday.

In Qatar, the index slipped by 2.8 percent as investors shunned stocks across board, with petrochemicals group Industries Qatar leading the losses.

Egypt’s blue-chip index lost 1.3 percent, with top lender Commercial International Bank retreating by 0.8 percent.

(With Reuters)


Saudi TRSDC gets a boost with environmental ISO accreditation 

Saudi TRSDC gets a boost with environmental ISO accreditation 
Updated 25 January 2022

Saudi TRSDC gets a boost with environmental ISO accreditation 

Saudi TRSDC gets a boost with environmental ISO accreditation 

RIYADH: The Red Sea Development Co., achieved another milestone in its journey to develop the world's largest sustainable tourism project. 

The Saudi developer, known as TRSDC, was awarded the Environmental Management Standard, ISO 14001:2015 accreditation.

TRSDC’s Environmental Management System was developed as the company launched the EMS manual in January 2021, it said in a statement. 

With respect to the environment, the EMS aimed at guiding and managing TRSDC’s activities throughout design, construction, and operational stages of the project.

“We made a commitment to ourselves, our project and to the Kingdom to go beyond the current expectations of environmental best practice, to deliver a regenerative approach to tourism development,” CEO, John Pagano, said. 

“Achieving this certification is rewarding for our team, who work tirelessly to deliver against our commitments to the environment in which we are working,” said Raed Albasseet, the chief environment and sustainability officer.

TRSDC is developing an area over 28,000 square kilometres on the West Coast of Saudi Arabia. 

Recently, it closed a SR14 billion ($3.7 billion) term loan facility and revolving credit facility with four Saudi banks.

Last year, it was one of the first companies in the Middle East to achieve the ISO 9001:2015 certification for quality management for design and construction of assets, as well as a Green Financing accreditation.


Global mining group Rio Tinto restarts Mongolian copper project

Global mining group Rio Tinto restarts Mongolian copper project
Updated 25 January 2022

Global mining group Rio Tinto restarts Mongolian copper project

Global mining group Rio Tinto restarts Mongolian copper project

Rio Tinto, a Toronto listed mining group, is once again going ahead with its most important growth project, the Oyu Tolgoi copper mine in Mongolia.

The project began after the company reached an agreement with the government of Mongolia, and solved key issues hindering the $7 billion expansion of the project.

On Jan. 25, an underground caving process was launched, which means that the mine will start production in the first half of next year.

Rio Tinto had previously refused to start the undercut until it ended its dispute with the Mongolian government. Rio Tinto-controlled subsidiary company Turquoise Hill Resources, which owns the majority of the Oyu Tolgoi project, has been fighting with Ulan Batur for years over how to split the cost of an underground expansion that is more than $1 billion over budget and several years late.  

Rio Tinto and its subsidiary have agreed to write off $2.4 billion of loans and interest used by the Mongolian Government to fund its share of the development costs, according to the Financial Times. The government will let the company extend an existing deal to import power from China to at least 2026, followed by another extension until 2030 if a domestic energy source is not made available, according to the newspaper.

“The size and the complexity [of the project] requires an aligned way forward, and we haven’t had that for years, I have to admit,” Rio Tinto Chief Executive Jakob Stausholm said in an interview quoted by the Wall Street Journal. “So it is a big, big step forward.”

Rio has mined copper from an open pit mine at Oyu Tolgoi for a decade. Given that much of the deposit lies deeper below the Earth’s surface, it has been difficult for the company to reach the ore.

Once at full speed, the Oyu Tolgoi project will be one of the biggest copper mines in the world, producing at peak capacity 500,000 tons a year of the metal. It will also double Rio’s copper division output, according to the Financial Times


Tourism Development Fund to develop destination in Saudi city Taif

Tourism Development Fund to develop destination in Saudi city Taif
Updated 25 January 2022

Tourism Development Fund to develop destination in Saudi city Taif

Tourism Development Fund to develop destination in Saudi city Taif

RIYADH: The Tourism Development Fund will invest more than SR300 million ($80 million) in the Saudi city of Taif, which is located in the western part of the Kingdom, in a bid to attract visitors.

The TDF, a goverment-run organisation fund that aims to strengthen the tourism sector has formed a strategic partnership with the distinguished Al-Ameen Compan.

It will see the development of a hotel with approximately 150 hotel units, retail and entertainment facilities, with additional space for a large outdoor corridor and designated spaces for local and international shops in the area.

The 100,000 square kilometre project reflects a modern concept in shopping by integrating the retail sector and leisure activities.

The project reflects the Fund's commitment to developing emerging tourist areas within the framework of the National Tourism Strategy, Qusay Al-Fakhri, CEO of the Tourism Development Fund said.

He added that it will highlight Taif's distinct and promising potentials, including its mild climate and agricultural sector and enhance the region's attractiveness through world-class tourism facilities.


Saudi PIF selects PwC to implement 6 renewable energy projects, CNBC says

Saudi PIF selects PwC to implement 6 renewable energy projects, CNBC says
Updated 25 January 2022

Saudi PIF selects PwC to implement 6 renewable energy projects, CNBC says

Saudi PIF selects PwC to implement 6 renewable energy projects, CNBC says

RIYADH: Saudi Arabia’s Public Investment Fund, PIF, has selected the global consulting firm PwC as an advisor on six renewable energy projects, including wind and solar plants. 

The projects will be implemented in cooperation with the Ministry of Environment, Water and Agriculture, CNBC Arabia reported, citing banking resources. 

This comes in line with the sovereign fund’s plan to transform the Kingdom into a green economy and diversify its energy mix. 

With a total capacity of around 2.3 gigawatts, the PIF will start financing the second phase of renewable energy projects that it is working on in collaboration with local companies, CNBC Arabia reported. 

The new phase of projects includes the Shoaiba power plant, with two gigawatts of energy from renewable resources and a production capacity of 900 megawatts, CNBC reported citing an informed source. 

Established in 1988, London-based PwC is a one of the Big Four accounting firms that offers business advisory services. 

 


Leading Norwegian oil and gas producer Vaar Energi plans IPO   

Leading Norwegian oil and gas producer Vaar Energi plans IPO   
Updated 25 January 2022

Leading Norwegian oil and gas producer Vaar Energi plans IPO   

Leading Norwegian oil and gas producer Vaar Energi plans IPO   

Vaar Energi, the third biggest oil producer in Norway, is planning an Oslo stock market listing and to raise capital through two private placements.

The initial public offereing could, depending on its size and market value, be the largest oil and gas listing since Aramco raised $25.6 billion at a $1.7 trillion valuation during its IPO in 2019, according to the Financial Times, quoting data provider Dealogic.

The company, which is valued at between $10 billion-$15 billion, had an average production of 247,000 barrels per day during the third quarter.

The group, which is about 70 percent owned by Eni with the rest owned by HitecVision is looking at institutional investors but Eni intends to remain the majority shareholder after the listing. DNB, JPMorgan, Morgan Stanley and SpareBank 1 are acting as joint global coordinators for the IPO.

“We believe oil and gas will continue to be part of the energy mix for decades to come. The current gas market developments in Europe confirm our view that a reliable and safe supply of natural gas from Norway will be crucial,” said CEO Torger Roed.

Norway is western Europe’s biggest hydrocarbon producer. The company sees the Norwegian continental shelf as one of the most appealing regions for exploration and production globally, thanks to cost competitive and stable regulatory environments as well as low emissions.

Yet recent IPO have faced hurdles as investors insist on sustainability. Vaar Energi wants to achieve zero carbon emissions in its own production by 2030. It is also looking to boost its production to 350,000 bpd by 2025.