Oil market headed for surplus as omicron impact muted: IEA

Oil market headed for surplus as omicron impact muted: IEA
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Updated 19 January 2022

Oil market headed for surplus as omicron impact muted: IEA

Oil market headed for surplus as omicron impact muted: IEA
  • “Supply disruptions and underperformance by OPEC+ are tempering growth expectations for 2022”

Oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, the International Energy Agency (IEA) said on Wednesday, while demand holds up despite the spread of the omicron coronavirus variant.


“This time around, the surge is having a more muted impact on oil use,” the Paris-based IEA said in its monthly oil report.


“While the steady rise in supply could see a significant surplus materialize in 1Q22 and going forward, available data suggest that 2022 is starting off with global oil inventories well below pre-pandemic levels,” it said.


The United States, Canada and Brazil are set to pump at all-time highs for the year while Saudi Arabia and Russia could also break their output records.


“World oil supply in 2022 has the potential for a massive Saudi-driven gain of 6.2 million bpd (barrels per day), provided the OPEC+ alliance continues to unwind the remainder of its record 2020 supply cut.”


OPEC and other producers including Russia, a group known as OPEC+, is unwinding record output cuts put in place last year to counter a fall in demand caused by the pandemic.


Its plan calls for adding back 400,000 bpd of production per month to fully unwind the cuts by the end of September, although some countries are struggling to raise output, with OPEC+ in December falling 790,000 bpd short of its target.


Eased lockdown measures mean mobility remains robust, the IEA added, leading the energy watchdog to increase its oil demand estimate for last year and 2022 by 200,000 barrels per day.


“Supply disruptions and underperformance by OPEC+ are tempering growth expectations for 2022,” it said.


But the IEA warned that with commercial oil and fuel stocks in OECD countries at their lowest levels in seven years, any dents in supply could render the oil market in 2022 volatile.


The impact could be greater given that the ramp-up in pumping means the effective spare capacity of the group is reduced and now centered in Saudi Arabia and the United Arab Emirates as some smaller OPEC members face output issues.


OPEC+ producers’ effective spare capacity by the second half of the year, excluding Iranian oil which is blocked by sanctions, could shrink to 2.6 million bpd, the IEA said.


Saudi retailer BinDawood expects to maintain good performance in Q2: CEO

Saudi retailer BinDawood expects to maintain good performance in Q2: CEO
Updated 12 sec ago

Saudi retailer BinDawood expects to maintain good performance in Q2: CEO

Saudi retailer BinDawood expects to maintain good performance in Q2: CEO

RIYADH: BinDawood Holding Co. is optimistic about continuing with a good performance in the second quarter following strong first-quarter results, which saw the company reporting a 5 percent growth in profit to SR65.5 million, the retailer’s CEO Ahmad BinDawood told Argaam.

The lifting of pandemic restrictions has led to the return of more pilgrims to Makkah and Madinah, as well as more tourists and business travelers, resulting in higher consumer spending and footfall at stores in Makkah and Madinah, contributing to a significant rise in revenues, said BinDawood.

Talking about the company’s financial outlook for the second quarter, the CEO added that BinDawood Holding had a “very good” performance in all financial metrics and is “quietly optimistic” that it has finally turned the corner.

“We are unable to provide guidance, but we believe with a strong Ramadan and Eid season, as well as our ability to run promotions and marketing campaigns, we are confident in the year ahead,” he was quoted as saying in the interview with Argaam.

The retailer saw sales grow 13.9 percent and 18.5 percent year-on-year and sequentially, respectively, according to data compiled by Argaam.


Billionaires’ wealth declines as shares fall

Billionaires’ wealth declines as shares fall
Updated 9 min 27 sec ago

Billionaires’ wealth declines as shares fall

Billionaires’ wealth declines as shares fall

RIYADH: Several top billionaires including Elon Musk have faced unexpected losses in their wealth as their companies’ shares have declined in an already volatile market. 

According to a Bloomberg report, Musk — the world’s richest person — lost 5.4 percent of his fortune, as Tesla shares slid almost 7 percent. Musk’s current wealth now is approximately $192 billion, his lowest since August 26.

According to the wealth index, his wealth last dipped below $200 billion in March. But markets, however, staged a rally lifting his net worth to $288 billion on April 4. Since then it declined again.

Meanwhile, Snap Inc.’s Evan Spiegel and Bobby Murphy also saw a considerable amount of their fortunes vanish. 

On May 24, Snap’s shares slid 41 percent in New York trading, which marked its biggest intraday decline ever. 

Some 30 percent of Speigel’s fortune, worth $1.4 billion vanished, while Murphy lost $1.8 billion or 36 percent of his wealth. 

According to the wealth index, Spiegel and Murphy have now a net worth of $3.4 billion and $3.1 billion respectively. 

 


UAE’s Peninsula abandons $1bn London listing plan for ADX IPO: Bloomberg

UAE’s Peninsula abandons $1bn London listing plan for ADX IPO: Bloomberg
Updated 12 min 11 sec ago

UAE’s Peninsula abandons $1bn London listing plan for ADX IPO: Bloomberg

UAE’s Peninsula abandons $1bn London listing plan for ADX IPO: Bloomberg

RIYADH: UAE’s Peninsula Real Estate has opted for a stock listing on Abu Dhabi’s exchange, after abandoning plans to list in London, Bloomberg reported citing unnamed sources.

The company was initially exploring listing a real estate investment trust at a value of $1 billion on the London Stock Exchange.

Bloomberg’s sources noted that the developer ended London listing talks in light of the growing attractiveness of the Gulf’s capital markets.

Emirates NBD, First Abu Dhabi Bank, HSBC Holdings Plc, and Morgan Stanley have been selected to manage the initial share sale, the sources added.

Peninsula and Emirates NBD declined to comment to Bloomberg on the news. 


Projects amounting to $220m on track in the MENA region amid energy transition push: NRG matters

Projects amounting to $220m on track in the MENA region amid energy transition push: NRG matters
Updated 31 min 23 sec ago

Projects amounting to $220m on track in the MENA region amid energy transition push: NRG matters

Projects amounting to $220m on track in the MENA region amid energy transition push: NRG matters
  • Energy firms are also being urged to address windfall profits to ease the pain of rallying costs on consumers and further drive the green transition

RIYADH: Projects are being planned in the Middle East and North Africa region to advance the region’s energy transition journey. 

Namibia is considering green bonds for financing projects that are set to produce hydrogen. 

Energy firms are also being urged to address windfall profits to ease the pain of rallying costs on consumers and further drive the green transition. 

Elsewhere, Coal India announced it will launch the biggest mine in the country, while France’s TotalEnergies is on track to supply South Korea’s Hanwha Energy Corporation with liquified natural gas supply.

Looking at the bigger picture: 

·Several projects amounting to $220 billion are being planned across the MENA region in an attempt to further propel the energy transition journey, MEED reported. This comes as almost all countries in the region have pledged to significantly reduce greenhouse gas emissions by 2030. 

·Namibia is contemplating green bonds as a financing tool for projects that will use clean energy to produce hydrogen for export purposes. This comes as the South African country is on track to construct several plants to take advantage of the ideal conditions in the country for solar and wind powered energy, Bloomberg reported, citing the government’s green hydrogen commissioner James Mnyupe. The plants under construction are expected to start generating output in four years’ time.

·Energy firms have been told to carry the weight of the energy crisis by addressing the major windfall profits that they are currently making, Bloomberg reported, citing the EU’s climate chief Frans Timmermans. This comes as consumers are struggling to keep up with the rallying costs of living and surging energy bills. As it is, the situation is also hindering the path to green transition, the chief stressed. 

Through a micro lens:

·Indian government-owned coal mining and refining corporation Coal India is set to launch the biggest coal mine in the country in an attempt to combat the energy crisis, Reuters reported. Also referred to as the Siarmal mine, the mine — which is estimated to start operating between October and December — is projected to have a capacity of 50 million tons in five to seven years’ time, Reuters reported, citing Vinayak Jamwal, a spokesman from the corporation.

·French multinational integrated oil and gas company TotalEnergies has signed a long-term sale contract with South Korean comprehensive energy solutions firm Hanwha Energy Corporation to supply it with up to 600,000 metric tons of liquified natural gas a year, Reuters reported, citing the firm. For the upcoming 15 years, LNG will be sourced from TotalEnergies before being channeled to the South Korean firm. 

 


Oil Updates — Crude gains; TotalEnergies to buy stakes of Clearway; Petrobras shares drop following CEO ouster

Oil Updates — Crude gains; TotalEnergies to buy stakes of Clearway; Petrobras shares drop following CEO ouster
Updated 33 min 2 sec ago

Oil Updates — Crude gains; TotalEnergies to buy stakes of Clearway; Petrobras shares drop following CEO ouster

Oil Updates — Crude gains; TotalEnergies to buy stakes of Clearway; Petrobras shares drop following CEO ouster

RIYADH: Oil prices rose more than $1 on Wednesday, buoyed by tight supplies and the prospect of rising demand from the upcoming start of the summer driving season in the US, the world’s biggest crude consumer.

Brent crude futures for July rose $1.38, or 1.2 percent, to $114.94 a barrel by 0511 GMT. Brent futures gained 0.1 percent on Tuesday and are up for the fifth day.

US West Texas Intermediate crude futures for July delivery rose $1.35, or 1.2 percent, to $111.12 a barrel. The contract settled down 52 cents on Tuesday.

TotalEnergies to buy 50 percent of US renewables firm Clearway

TotalEnergies said on Wednesday it has agreed to buy 50 percent of Clearway Energy Group, the fifth-largest renewables company in the US, marking the French group’s largest US renewables energy acquisition.

TotalEnergies has been branching out into the fast-growing renewable energy sector and diversifying away from hydrocarbon-centered activities in recent years.

The company said the acquisition would see it team up with Global Infrastructure Partners. As part of the deal, GIP will receive $1.6 billion in cash and an interest of 50 percent minus one share in the TotalEnergies subsidiary that holds its 50.6 percent ownership in SunPower Corporation.

The transaction takes into account valuations of $35.1 per share for Clearway Energy and $18 per share for SunPower, TotalEnergies added.

“It allows TotalEnergies to scale up in the US market, one of the most dynamic in the world, benefiting from operating assets and a 25 GW high-quality pipeline, in wind, solar and storage, with a wide geographic coverage with a presence in 34 states,” said TotalEnergies Chairman and CEO Patrick Pouyanne.

Petrobras shares drop

Shares of Brazil’s state-run oil company Petrobras plunged on Tuesday after the government ousted its chief executive for the second time in two months and signaled plans to alter the company’s market-based fuel pricing policy.

President Jair Bolsonaro has railed against a series of fuel price increases by Petrobras, formally known as Petroleo Brasileiro SA, which have tracked a surge in global energy costs and added to double-digit inflation in Brazil.

While the company has limited political interference during much of Bolsonaro’s term, his government has adopted a far more aggressive stance on fuel prices as the war in Ukraine drags on and Brazil’s October presidential election approaches.

Preferred shares in the company fell 4.7 percent in Sao Paulo in afternoon trade, far worse than a 1.2 percent slide for Brazil’s benchmark Bovespa equities index.

Bolsonaro’s chief of staff Ciro Nogueira said on Tuesday that the president is “anguished” by rising fuel prices and the company’s pricing policy must now be aligned with the views of a new energy minister, who took office this month.

(With input from Reuters)