OPEC flags risk to oil demand outlook from Ukraine war, inflation

OPEC flags risk to oil demand outlook from Ukraine war, inflation
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Updated 15 March 2022

OPEC flags risk to oil demand outlook from Ukraine war, inflation

OPEC flags risk to oil demand outlook from Ukraine war, inflation

LONDON: The Organization of the Petroleum Exporting Countries said on Tuesday that oil demand in 2022 faced challenges from Russia’s invasion of Ukraine and rising inflation as crude prices soar, increasing the likelihood of reductions to its forecast for robust demand this year.

Oil prices shot above $139 a barrel this month, hitting peaks not seen since 2008, as Western sanctions tightened on Moscow over its invasion of Ukraine and disrupted oil sales from Russia, helping to fuel inflation that was already rising.

In a monthly report, OPEC stuck to its view that world oil demand would rise by 4.15 million barrels per day in 2022 and increased its forecast of global demand for its crude.

But OPEC, which just a month ago had raised the possibility of a more rapid demand increase in 2022, said the war in Ukraine and continued concerns about COVID-19 would have a negative short-term impact on global growth.

“Looking ahead, challenges to the global economy — especially regarding the slowdown of economic growth, rising inflation and the ongoing geopolitical turmoil will impact oil demand in various regions,” OPEC said in the report.

“While the year started on relatively solid underlying footing, the latest events in Eastern Europe may derail the recovery,” OPEC said in its commentary on the world economy.

World oil consumption is expected to surpass the 100 million bpd mark in the third quarter, in line with OPEC’s forecast last month. OPEC nudged up its forecast of the year’s total oil use by about 100,000 bpd to 100.90 million bpd.

On an annual basis, OPEC said the world last used more than 100 million bpd of oil in 2019.

Oil prices extended their earlier decline after the report was issued, trading further below $99 a barrel on the perception of easing supply risks.

Output rises

The report also showed higher output from OPEC as the group and allied non-members, known as OPEC+, gradually unwind record output cuts put in place in 2020.

OPEC+ has aimed to raise output by 400,000 bpd a month, with about 254,000 bpd of that due from 10 participating OPEC members, but production has been increasing by less than this as some producers struggle to pump more.

Still, the report showed OPEC output in February bucked that trend and rose by 440,000 bpd to 28.47 million bpd, driven by higher supply from top exporter Saudi Arabia and a recovery from outages in Libya.

The growth forecast for overall non-OPEC supply in 2022 was left unchanged, as was that for production of U.S. tight oil, another term for shale.

OPEC said it expects the world to need 29 million bpd from its members in 2022, up 100,000 bpd from last month and theoretically allowing further increases in output.


Egypt In-Focus: Foreign debt repayments reach $20bn; five more commodities added to ration cards 

Egypt In-Focus: Foreign debt repayments reach $20bn; five more commodities added to ration cards 
Updated 18 sec ago

Egypt In-Focus: Foreign debt repayments reach $20bn; five more commodities added to ration cards 

Egypt In-Focus: Foreign debt repayments reach $20bn; five more commodities added to ration cards 

CAIRO: Egypt paid around $16.5 billion in external debt installments, as well as $3.5 billion interest on these debts, during the first nine months of the last fiscal year, according to the central bank’s data.

The country’s total foreign debt repayments during the last fiscal year, $20 billion, is up from $10.9 billion during the same period the previous year. 

Wheat procurement

Ukrainian officials are working to release a detained vessel carrying Ukrainian wheat purchased by the Egyptian government, Ukraine’s Mideast envoy told Reuters.

The vessel, Emmakris III, was detained last month at the request of Ukraine’s prosecutor general to investigate its alleged Russian owner, court documents seen by Reuters showed.

“We are working in coordination with all the responsible authorities in Ukraine and in Egypt, to see that this ship is allowed to set sail as soon as possible,” Ukraine’s Special Envoy to the Middle East Maksym Subkh said.

Commodity support

The Supply Ministry has issued a directive to add five more commodities to the list of supplies eligible for purchase through ration cards, according to a Cabinet statement. 

Ration card holders will be able to purchase these commodities at lower-than-market prices starting 1 September. 

The commodities are ghee, flour, tahini, tuna and jam. 

e-Finance is working with the PIF

Cairo’s digital payments developer e-Finance will provide financial and digital services to Saudi Arabia’s Public Investment Fund’s new Egypt investment arm, its chairman Ibrahim Sarhan said in an interview with Asharq. 

The Saudi Egyptian Investment Co., a subsidiary of the PIF, has acquired a 25 percent stake in e-Finance for financial and digital investments, as part of a deal to acquire stakes in four Egyptian-listed companies worth $1.3 billion.


Macro Snapshot —  US housing starts to tumble in July; Greece’s budget deficit below expectations

Macro Snapshot —  US housing starts to tumble in July; Greece’s budget deficit below expectations
Updated 7 min 21 sec ago

Macro Snapshot —  US housing starts to tumble in July; Greece’s budget deficit below expectations

Macro Snapshot —  US housing starts to tumble in July; Greece’s budget deficit below expectations

CAIRO: Strong Israel economic growth and inflation data is expected to prompt a 0.75 percent rate hike, US housing started to tumble in July, Greece’s budget deficit was much lower than expected in January-July, and UK's unemployment rate held at 3.8 percent in three months to June.

Israel's GDP, inflation data 

A sharp rebound in Israel’s economic activity and a jump in annual inflation have made a 0.75 percent interest rate increase more likely next week, analysts said on Tuesday.

The central bank had looked headed for a second straight half-point move at its upcoming Aug. 22 policy meeting, but data showed stronger than expected economic growth in the second quarter a day after a further uptick in prices.

“Economic activity remains strong and alongside the red-hot inflation figures for July, the risks are skewed to a 75 basis point rate hike,” said Liam Peach, emerging markets economist at Capital Economics.

US housing starts tumble in July

US homebuilding fell sharply in July, weighed down by higher mortgage rates and prices for materials, suggesting that the housing market could contract further in the third quarter.

Housing starts plunged 9.6 percent to a seasonally adjusted annual rate of 1.446 million units last month, the Commerce Department said on Tuesday. Data for June was revised slightly higher to a rate of 1.599 million units from the previously reported 1.559 million units.

Economists polled by Reuters had forecast starts declining to a rate of 1.540 million units.

Greece’s budget deficit 

Greece’s primary budget deficit was much lower than expected for the first seven months of this year, official data showed on Tuesday, potentially giving the government more scope to support businesses and households with higher energy costs.

The fiscal gap totalled €1.167 billion ($1.18 billion) in January-July, the Finance Ministry said. That was well below the government’s target of €5.808 billion thanks to higher than expected tourism and one-off revenues, and much lower than a €9.06 billion deficit in the same period of 2021.

The primary budget gap excludes debt servicing costs.

UK unemployment rate 

Britain’s unemployment rate held at 3.8 percent in the three months to June, official monthly figures showed on Tuesday.

Economists polled by Reuters had expected the jobless rate to stay at 3.8 percent.

(With input from Reuters)


MENA Project Tracker— KOC delays two contracts; Iraq begins reconstruction of Mosul airport

MENA Project Tracker— KOC delays two contracts; Iraq begins reconstruction of Mosul airport
Updated 13 min 44 sec ago

MENA Project Tracker— KOC delays two contracts; Iraq begins reconstruction of Mosul airport

MENA Project Tracker— KOC delays two contracts; Iraq begins reconstruction of Mosul airport

CAIRO: The Kuwait Oil Co. has delayed bidding on two of its projects.

Bidding for one of the projects, which include the construction of two 132 kilovolts substations and 33 power lines, has been postponed from Sept. 4 to Oct. 16.

While the other project — supplying sulphuric acid to refineries — has put off its bids for 14 days and rescheduled it for the 8th of September, reported MEED.

Iraq $150 million airport

Iraqi Prime Minister Mustafa Al-Kadhmi has announced the reconstruction of the $150 million Mosul airport in the Nineveh governorate, reported Zawya.

This is part of the 161 post-war reconstruction projects that were promised by the Iraqi government.

The facility is set to increase Iraq’s aviation performance, in addition to increasing productivity of cargo transport and logistics in the region.

QatarEnergy JV

QatarEnergy has received bids on its joint venture project with US-based Chevron Phillips Chemical for the construction of two main packages of a large-scale petrochemicals project in Qatar’s Ras Laffan Industrial City.

The project bids are estimated at $5 billion and expected on Aug. 7, reported MEED.

 This will increase Qatar’s overall ethylene production by 70 percent, producing a capacity of 2.08 million tons a year.

 

 


Saudi holdings of US Treasuries rise to $119bn in June

Saudi holdings of US Treasuries rise to $119bn in June
Updated 24 min 47 sec ago

Saudi holdings of US Treasuries rise to $119bn in June

Saudi holdings of US Treasuries rise to $119bn in June

RIYADH: Saudi holdings of US Treasuries increased to $119.2 billion in the month of June from $114.7 billion in May, according to data released by the US Treasury. 

Out of the $4.5 billion increase in the total value of US Treasuries in June, long-term papers accounted for $2.7 billion, while the short-term bonds accounted for $1.8 billion.

Overall, Saudi Arabia’s long-term bond investments in the US Treasuries accounted for 86 percent or $102.02 billion, while short-term paper accounted for $17.1 billion or 14 percent. 

The $4.5 billion growth in value of US Treasury holdings held by Saudi residents marks the biggest monthly increase since August 2020. 

The total value of US Treasury holdings held by Saudi Arabia in June is also the second highest for this year. In January 2022, Saudi holdings of the treasuries stood at $119.4 billion. 

In the new list, the Kingdom maintained its 16th spot among the largest holders of US debt in June. 

Japan was the top holder of US Treasury bonds in June with a value of $1.24 trillion, followed by China and the UK with $967.8 billion and $615.4 billion respectively.  

Luxembourg grabbed the fourth spot with $306.8 billion, while the Cayman Islands garnered fifth place with $300.4 billion. 

Looking at some other oil exporting countries, the residents of Norway increased their holding in US treasuries by $4 billion to $112.4 billion.

The UAE’s US Treasury holdings surged by $1.6 billion to reach $39.9 billion. 

Kuwaiti residents’ holding value, however, slipped from $46.3 billion to $46 billion in June. 


Dubai experiences 22% growth in commercial licencing business H1 2022

Dubai experiences 22% growth in commercial licencing business H1 2022
Updated 41 min 7 sec ago

Dubai experiences 22% growth in commercial licencing business H1 2022

Dubai experiences 22% growth in commercial licencing business H1 2022
  • Department seeks to elevate Dubai’s position as a preferred global investment destination

DUBAI: The Department of Planning and Development in Dubai, Trakhees, completed approximately 16,000 transactions through its Licencing Department during the first half of 2022, Emirates News Agency reported.

This figure represents a 22 percent growth increase over the same period last year.

Trakhees is the regulatory arm of the Ports, Customs and Free Zone Corporation of Dubai.

Its Licencing Department provides corporate licensing services to local and free zones, as well as government agencies, such as the issuance of work permits, establishment cards, and no-objection certificates.

Trakhees CEO Abdulla Belhoul explained that the department experienced significant growth in all services supplied by the Licencing Department in the commercial licensing sectors in its private development areas.

Belhoul stated that Trakhees is eager to promote economic growth and strengthen Dubai’s position as a leading sustainable hub to support the global economic sector.

He also pointed out the eagerness of Trakhees to realize Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum’s vision of supporting the economy and elevating Dubai’s position as a preferred global investment destination.

Furthermore, Trakhees seeks to enhance its services in order to keep up with the aspirations of the UAE’s business leaders and investors.

“To reassure the support of the Department of Planning and Development — Trakhees towards providing the required services for projects and small and medium enterprises according to the highest standards, the department received 1,029 transactions to reserve a new trade name, at the level of local and free zone licences, during the first half of 2022 in private development areas that fall under the supervision of the Ports, Customs and Free Zone Corporation,” Belhoul added.

According to official statistics released by the Licencing Department, demand for local licensing services by customers increased to 7,067 transactions in the first half of this year.

The local license renewal service ranked first with 3,426 transactions, followed by local license amendments with 1,063 transactions.

Booking a new trade name resulted in 951 transactions, followed by 627 transactions for new local licenses.

Respectively, International City ranked first with 203 local licensing transactions, followed by Jumeirah Village Circle in second place, Palm Jumeirah, Dragon Market, and finally Palm Deira.

The statistics showed an increase in the number of government services transactions during the first half of 2022. This was accompanied by an increase in the number of work permits issued by the department, reaching 3,440 approved in Dubai, followed by 1,270 transactions related to permit renewal.

Regarding free zone license, the license renewal service was the most requested service, with 527 transactions from January to June 2022 . This was followed by 185 commercial permits and 78 transactions for reserving a trade name under the category of free zone licenses.

According to Belhoul, Trakhees seeks to facilitate requesting and obtaining various commercial licenses by implementing a package of procedures and improvements in its unified electronic system for issuing commercial licenses.

Additionally, the department aims to adopt a culture of excellence in performance to ensure customer satisfaction by shortening the time it takes to obtain these services.