Oil falls $2 on reserve release, world stocks dip on war, recession worries: Reuters

Oil falls $2 on reserve release, world stocks dip on war, recession worries: Reuters
Recession risks are impacting global stock markets (Shutterstock)
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Updated 01 April 2022

Oil falls $2 on reserve release, world stocks dip on war, recession worries: Reuters

Oil falls $2 on reserve release, world stocks dip on war, recession worries: Reuters
  • MSCI world index down 0.17 percent
  • US S&P futures down 0.29 percent
  • Oil heading for 14 percent fall this week

LONDON/SINGAPORE: World stocks dipped further from recent six-week highs on Friday on worries about the Russia-Ukraine war and recession risks, and oil fell $2 a barrel on reserve releases, Reuters is reporting.

European buyers of Russian gas faced a deadline to start paying in rubles on Friday, while negotiations aimed at ending the five-week war were set to resume even as Ukraine braced for further attacks in the south and east.

The move on gas by Russian President Vladimir Putin in response to Western sanctions prompted Germany, the most reliant on Russian gas, to accuse him of “blackmail” as it activated an emergency plan that could lead to rationing.

“The recession risk of selected countries such as Germany from the stopping of gas delivery would be non-negligible,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.

Galy added: “Russia is essentially a petrol station. If a petrol station doesn’t sell its products, it goes bankrupt — they are not in a position of power.”

The war threatens also to disrupt global food supplies, with a US government official sharing images of what they said was damage to Ukrainian grain storage facilities.

MSCI’s global share index fell 0.17 percent to 710.22, against a high of 724.49 hit on Wednesday, heading for little change on the week.

US S&P futures rose 0.29 percent while European stocks and Britain’s FTSE 100 index were steady.

BoFA strategists said recession risks will “jump” in the coming months as a “bull era of central bank excess, Wall Street inflation (and) globalization (is) ending.”

In its place “a bear era of government intervention, social and political polarization, Main Street inflation & geopolitical isolationism (is) starting,” they added.

US and European shares notched their biggest quarterly drops since the outbreak of the COVID-19 pandemic in 2020 in the quarter that ended on March 31.

But the quarterly drop in US shares masked a late comeback in the S&P 500 index, which rallied from a near-13 percent decline to finish the quarter off about 5 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.34 percent on Friday.

In Tokyo, the Nikkei was down 0.56 percent, notching up a 1.7 percent weekly fall.

Supply disruption and surging raw material costs drove Japanese business confidence to a nine-month low last quarter, data on Friday showed.

Chinese blue-chips rose 1.27 percent, helped by hopes for policy easing.

Oil Prices

Oil prices continued to slide following an announcement on Thursday of huge releases from US strategic reserves and ahead of a Friday meeting of oil-consuming nations to discuss their own reserve releases.

US crude futures fell more than $2 a barrel to $98.17 and Brent futures were also down $2 at $102.66 a barrel.

Oil is on course for a 14 percent weekly fall — the sharpest in almost two years, after an earlier surge due largely to the Ukraine conflict had seen prices rise by more than 30 percent.

Investors are fretting over whether inflationary pressures will force central banks into aggressive rate hikes, potentially triggering recessions.

US March jobs data at 1230 GMT will be watched for indications of wage inflation, in addition to the headline jobs figure.

“Average hourly earnings are surging but less quickly than inflation,” said Galy.

The closely-watched spread between US two-year and 10-year notes is nearly zero.

An inversion in this part of the US yield curve is viewed as a reliable signal that a recession may follow in one to two years. Benchmark 10-year notes last yielded 2.4170 percent, while the two-year yield was at 2.4057 percent.

Global currencies

The dollar, which has benefited from safe-haven flows and expectations of rising US rates, remained firm. Against a basket of peers, the greenback was up 0.16 percent at 98.471, and it was up 0.67 percent against the yen at 122.48.

The euro was steady at $1.1060.

Euro zone March flash inflation data at 0900 GMT is forecast to give a reading of 6.6 percent, according to a Reuters poll, although inflation readings for countries within the bloc suggest it might surge even higher.

The German 10-year government bond yield, a benchmark for the euro zone, rose 5 basis points to 0.6 percent, after jumping 39 bps in March, its biggest monthly rise since 2009, on expectations of monetary tightening.

Safe-haven gold dipped 0.25 percent after its biggest quarterly gain in two years. Spot gold was last quoted at $1,932.34 per ounce.

- Reuters


Saudi Arabia issues first license at OXAGON to NEOM Green Hydrogen

Saudi Arabia issues first license at OXAGON to NEOM Green Hydrogen
Updated 01 February 2023

Saudi Arabia issues first license at OXAGON to NEOM Green Hydrogen

Saudi Arabia issues first license at OXAGON to NEOM Green Hydrogen

RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources on Tuesday issued the first industrial license to NEOM Green Hydrogen Co. at OXAGON, the Saudi Press Agency reported.

It is an equal joint venture between NEOM, ACWA Power, and Air Products.

It is part of the Kingdom’s efforts to catalyze the global hydrogen economy by becoming the world’s leading hydrogen producer while maintaining its position as a key player in the energy sector.

The NEOM Green Hydrogen plant is expected to begin green hydrogen production using 100 percent renewables in 2026. It will produce up to 1.2 million tons of green ammonia annually, or 600 tons of green hydrogen daily. Green ammonia will be exported to global markets to support the decarbonization of the heavy transport sector.

It is estimated that the plant will provide up to 5 million tons of CO2 annually. When the plant commences operations at OXAGON in 2026, 100 percent of the green hydrogen will be exportable to global markets in the form of green ammonia, under an exclusive long-term agreement with US-based Air Products Co.

The plant will run on around 4 GW of wind and solar energy and produce green hydrogen using the electrolysis 2.2GW technology.


Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen

Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen
Updated 01 February 2023

Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen

Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen

RIYADH: The Saudi-Oman Investment Forum and exhibition beginning in Riyadh on Wednesday discussed various ways and means to enhance long-term economic partnership between the two Gulf states in the investment and industry sectors.

Held under the theme “Partnership and Integration,” the four-day forum aims to build sustainable partnerships in key sectors and contribute to enhancing mutual interests between the two sides.

Saudi Arabia’s Ministry of Investment hosted a senior delegation from Oman, which culminated in the signing of 13 Memoranda of Understanding in various sectors, including biochemicals, energy, mining, financial investment, logistics, maritime transport, and information technology among others.

The agreements signed at the forum underscore the long-standing partnership between Saudi Arabia and Oman, which has accelerated in recent years with several high-level engagements.

In December 2021, Saudi Arabia and Oman announced the opening of the first land crossing between the Gulf states to promote trade exchange, while in April last year Saudi Arabia’s Minister of Investment Khalid Al-Falih met with the Chairman of the Oman Investment Authority Abdulsalam bin Mohammad Al Murshidi to explore the enhancement of investment cooperation between the two countries.

This week’s four-day forum was opened by Al-Falih with Qais bin Muhammad Al-Yousef, Omani minister of commerce industry and investment promotion, who led the Omani delegation of diplomats and business leaders.

Al-Falih stressed the importance of the private sector’s role in Oman and Saudi Arabia in pushing the wheel of development forward as an active partner and contributor to the growth of economic, investment and trade sectors in the two countries.

He affirmed that the Saudi government is keen to strengthen investment relations with Oman, noting that the volume of trade exchange between the two countries during the first half of 2022 reached SR11.39 billion ($3.03 billion).

“This forum is the embodiment of a deep relationship between Oman and Saudi Arabia, coming together under the theme of ‘Partnership.’ We have the opportunity to create a roadmap that supports businesses and investments for a prosperous future,” said Al-Falih.

Al-Yousef lauded the distinguished relations between Oman and Saudi Arabia, which resulted in an increase of 219 percent in the volume of trade exchange between the two countries until September 2022 as compared to 2021.

Alongside the forum, Al-Falih and Al-Yousef  jointly opened the maiden Saudi-Omani Industries Exhibition.

The exhibition is open to the public from Feb. 1  to 4, highlighting the strong economic relationship between both nations across several sectors, and showcasing products and services from small and medium enterprise, businesses from both sides to stimulate opportunities for investment.

Participating in the exhibition Sumaiya Abdullah AlRamdhani, CEO of the ELIF Entrepreneurship of Oman told Arab News: “This exhibition has opened for us so many lines, sharing experiences, exchanging business ideas with our counterparts from Saudi Arabia, and sharing our experiences with them, if they are interested in what we produce, our perfume. This gives us a new trade opportunity.”  

The session on Wednesday saw several presentations by both Oman and Saudi representatives.

From the Oman side, Invest in 2040 and Special Economic Zones in the Sultanate of Oman were highlighted as opportunities available to Saudi investors, while Saudi officials presented Invest in Saudi Arabia and Special Economic Cities and Zones which showcased the areas available in the Kingdom.

On the sidelines of the forum, business-to-business meetings were held between representatives of the private sector in the two countries, discussing opportunities for cooperation and partnership and reviewing available investment opportunities.


OPEC+ sticks to oil output policy

OPEC+ sticks to oil output policy
Updated 01 February 2023

OPEC+ sticks to oil output policy

OPEC+ sticks to oil output policy

LONDON/DUBAI: An OPEC+ panel endorsed the oil producer group’s current output policy at a meeting on Wednesday, leaving production cuts agreed last year in place amid hopes of higher Chinese demand and uncertain prospects for Russian supply.

Ministers from OPEC+ countries — members of the Organization of the Petroleum Exporting Countries and others including Russia — met in a virtual gathering that OPEC+ sources said lasted less than 30 minutes.

The ministers on the panel, called the Joint Ministerial Monitoring Committee, reviewed production figures and “reaffirmed their commitment” to the OPEC+ accord that runs to the end of 2023, OPEC said in a statement after the meeting.

The message was OPEC+ is staying the course until the end of the agreement and the group was on “mute mode,” a source said.

The ministers did not discuss the prospects for Chinese demand and supply from Russia, other OPEC+ sources said. Oil product exports from Russia will as of Feb. 5 be subject to a EU ban and G7 price cap.

OPEC+ agreed to cut its production target by 2 million barrels per day, about 2 percent of world demand, from November last year until the end of 2023 to support the market.

Oil fell at the start of the year but has rallied, supported by hopes that Chinese demand will rebound, although fears of global recession remain a drag on prices.

Brent crude was little changed around $85 a barrel after the JMMC meeting.


Magrabi announces new leadership structure, unveils latest mission statement

Magrabi announces new leadership structure, unveils latest mission statement
Updated 01 February 2023

Magrabi announces new leadership structure, unveils latest mission statement

Magrabi announces new leadership structure, unveils latest mission statement
  • Business group eyes international expansion and listing

RIYADH: Marking the beginning of a new chapter in its growth story, Magrabi Retail Group, the Middle East’s leading eyewear retailer, announced its newly formed leadership structure and unveiled its latest mission statement in an exclusive interview with Arab News.

While Amin Magrabi, formerly CEO, is stepping up as the chairman to lead the business forward and oversee strategic expansion goals in the region and beyond, Yasser Taher, formerly COO, is moving up to become the CEO as part of a gender-balanced C-suite.

“I am very excited by what the future holds as we see us expanding internationally and also listing the organization in the public markets,” Amin Magrabi told Arab News. 

He added: “We will also announce a new progressive board of directors in a couple of months.”

As the newly appointed CEO, Taher told Arab News that he is proud to become the first non-family member to hold this position in the history of the group. 

“We are transforming this family business to become a world-class business group. And I’m very excited about this transformation mission,” he said.

Last year, Magrabi achieved several milestones including the founding of the Lens Innovation Center based in Dubai, the first fully automated production installation in the region which aims to produce 2 million lenses a year by 2025.

Amin Magrabi, formerly CEO, is stepping up as the chairman to lead the business forward.

The company’s growing portfolio includes Magrabi, the biggest luxury eyewear chain in the region, as well as the lifestyle chain Doctor M, multiple owned brands, and a robust wholesale and distribution arm. Its retail network consists of 142-plus outlets and a growing omnichannel presence.

Magrabi seems all set to move forward now, with a strategic shift that is aligned with the group’s accelerated gender equity commitments.

With the new leadership structure firmly in place, Magrabi went on to unveil its new mission exclusively to Arab News. “We are delighted to announce the latest update, our new mission: Re-envisioning the world of eyewear to empower the lifestyles of millions.” 

“Re-envisioning entails transformation,” he explained. “It means going beyond the traditional approach, trying to unleash this industry from a very traditional setup to the way we think about it. It entails a new vision of how we look into this. This is the ‘how’ in the mission statement, the ‘what’ is the world of eyewear.” 

Magrabi added: “We look at how we can introduce new brands, new banners, new products, and services and create differentiated store concepts, online and offline proposition. This is how we look at the world of eyewear.”

Yasser Taher, formerly COO, is moving up to become the CEO. He is the first non-family member to hold this position in the history of the group. 

“The ‘why’ is to empower lifestyles,” Taher explained. “So what does this mean? We don’t want to only sell products. In reality, we want to empower our customers. We look at customer engagement with a very different approach.”

 This is an industry where consumers are not very well informed about their options and how to make the right selection, he said. 

“Hence, we wanted to empower consumers; we want to educate them. We want to simplify this industry for them to make sure that they are capable to make their own decisions and understand their options,” Taher went on to say.

The last piece of the mission, according to him, is the millions. “The millions is the ‘who,’” Taher said. “It not only implies the international expansion across different markets in different segments but it also implies corporate social responsibility and social impact programs.”

Summing it up Magrabi said that the company would like to drive home the message that Magrabi Retail Group is not a typical regional Middle Eastern company nor is it a typical family business. 

“It’s a very progressive business that wants a place for itself on a global platform and is not just about finances and numbers,” he concluded. 

“It’s about creating something truly differentiated; that is there to change an industry. And this executive transition is just part of this progressiveness as this company matures and moves from family hands to professional leadership hands.”

 


Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 

Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 
Updated 01 February 2023

Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 

Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 

RIYADH: Saudi Arabian Mining Co., also known as Ma’aden, awarded an engineering, procurement and construction management contract to Australian consultant Worley and Morocco’s JESA International for the first phase of its Phosphate 3 project. 

All sides plan on reaching a conclusive agreement regarding the EPCM contracts in the coming months, Worley noted in a statement.  

“We are pleased that Worley has been selected for providing services to Ma’aden’s Phosphate 3 development program that is expected to make Saudi Arabia one of the leading phosphate fertilizer exporters worldwide,” said Chris Ashton, CEO of Worley in the statement.  

As per the agreement, in-Kingdom services will be provided by Worley, while out-of-Kingdom services will be provided by JESA International.   

The project consists of the design and construction of new process plants in the Saudi industrial cities of Wa’ad Al Shamal and Ras Al-Khair.   

The statement also noted that the plants are part of an integrated greenfield complex that aims to generate 1.5 million metric tons of phosphate fertilizers a year.  

Implementation will take place through Worley’s offices in Saudi Arabia and India and JESA’s facility in Morocco, according to the statement.   

Ma'aden aims to complete the first phase of its Phosphate 3 complex in 2025 and the second phase in 2027, it said in its second-quarter 2022 investor presentation.