Oil climbs on tight supply, prospect of EU ban on Russian crude

Oil climbs on tight supply, prospect of EU ban on Russian crude
The EU is in talks with Hungary over plans to ban imports from Russia (Shutterstock)
Short Url
Updated 26 May 2022

Oil climbs on tight supply, prospect of EU ban on Russian crude

Oil climbs on tight supply, prospect of EU ban on Russian crude

LONDON: Oil prices rose on Thursday, extending a cautious rally this week on signs of tight supply while the EU wrangles with Hungary over plans to ban imports from Russia, the world’s second-largest crude exporter, after it invaded Ukraine, according to Reuters.

Brent crude futures were up $1.60 cents, or 1.4 percent, to $115.63 a barrel at 1352 GMT. US West Texas Intermediate (WTI) crude futures climbed $2.33, or 2.1 percent, to $112.66 a barrel.

A bigger-than-expected drawdown in US crude inventories in the week to May 20, following soaring exports, buoyed the market on Wednesday. US refiners picked up the pace of activity, boosting overall capacity use to the highest levels since before the pandemic.

“The fundamental backdrop ... is getting price supportive as the driving season is approaching and will turn even more bullish once the EU sanctions on Russian oil sales are endorsed by all parties involved,” PVM Oil’s Tamas Varga said.

European Council President Charles Michel on Wednesday said he is confident that an agreement can be reached before the council’s next meeting on May 30.

Germany’s economy minister Robert Habeck said the EU can still strike a deal on an oil embargo in the coming days or look to “other instruments” if no agreement is reached.

However, Hungary remains a stumbling block to the unanimous support needed for EU sanctions.

Hungary is pressing for about 750 million euros ($800 million) to upgrade its refineries and expand a pipeline from Croatia to enable it to switch away from Russian oil.

Even without a formal ban, much less Russian oil is available to the market as buyers and trading houses avoid dealing with crude and fuel suppliers from the country.

Russia’s oil production is expected to decline to 480-500 million tons this year from 524 million tons in 2021, Deputy Prime Minister Alexander Novak said, state-run news agency RIA reported on Thursday.

OPEC+ is set to stick to an oil production deal agreed last year at its meeting on June 2 and raise July output targets by 432,000 barrels per day, six OPEC+ sources told Reuters, rebuffing Western calls for a faster increase to lower surging prices.

There are also other factors that are favoring further upside to oil prices.

“Shanghai is preparing to reopen after a two-month lockdown, while the US peak driving season begins with the Memorial Day weekend, which could provide a fillip to oil demand,” said Sugandha Sachdeva, vice president of commodities research at Religare Broking, referring to the US holiday on Monday.

“All of the variables are pointing to further gains in oil prices going ahead.”

Related


Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 

Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 
Updated 13 sec ago

Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 

Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 

RIYADH: Some 93 environment, water and agriculture projects in Riyadh have been inaugurated by Gov. Prince Faisal bin Bandar.

The launch of the projects, worth over SR8.5 billion ($2.2 billion), comes to support water and environmental sustainability in line with the objectives of the Kingdom's Vision 2030, according to the Saudi Press Agency. 

The projects include the Kingdom’s largest water transmission system, the Jubail-Riyadh transmission system, with a capacity of 1.2 million cubic meters per day.

In addition to a dual transmission system, with a total length of 821 kilometers, with a total cost of over SR6.3 billion.

Implemented by the Saline Water Conversion Corp., National Water Co. and  the Undersecretary for Water, and the National Center for Vegetation Cover and Combating Desertification, the projects will contribute to the rising demand for water. 

They will also contribute to raising  operational efficiency in water transportation and distribution, enhancing environmental sustainability and increasing vegetation cover in the region. 

 


MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 

MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 
Updated 20 min 9 sec ago

MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 

MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 

RIYADH: The Royal Commission of AlUla, also known as RCU, has announced the launch of an Arts Valley as Saudi Arabia moves steadily to become a top global tourist destination, a goal outlined in Vision 2030. 

The Arts Valley, which spreads over 65 sq. km, is touted as a cultural asset of the “The Journey Through Time” masterplan launched in April, Trade Arabia reported. 

Noorah Al-Double, the CEO of the General Directorate for Arts and Innovative Industries said that these projects will transform AlUla into a pioneering international destination for arts, heritage, culture and nature by 2030. 

Honeywell and Anchorage to work on Egypt’s $2 billion Suez Canal project

US-based multinational conglomerate Honeywell and Anchorage Investments have signed a memorandum of understanding to construct the $2 billion Anchor Benitoite Petrochemicals Complex in Egypt’s Suez Canal Economic Zone, according to a MEED report.

The agreement entails that Honeywell Process Solutions will be hired as the Integrated Main Automation Contractor. 

HPS also will supply sufficient technologies to ensure operational safety and security to Anchorage Investments. 

Dana Gas halts Iraq oil field project following rocket attack

UAE’s Dana Gas has just pressed pause on its KM 250 oilfield expansion project following 3 rocket attacks near its Khor Mor Block in Iraq’s Kurdistan region, MEED reported. 

Citing a company statement to Abu Dhabi Securities Exchange, Meed reported that two rockets landed very close to the Khor Mor Block on June 24 and 25. 

The report further added that there were no injuries following the attack. 

The Khor Mor 250A project is an asset to Iraqi oil production, as it has shown immense yearly growth of 552 million cubic feet of gas a day in production in comparison to its average of 450 million cubic feet of gas a day. 

Upon talks with the Kurdistan Regional Government and the Iraqi Government, more forces have been deployed to protect the facilities. 

Damac awards $168m contract to Pivot

UAE-based property development company Damac has awarded the $168.2 million construction contract for the Costa Brava cluster within its Damac Lagoons development to Pivot Engineering and General Contracting Co., MEED reported.

According to the report, the scope of work under this contract includes the construction of 976 townhouses for the project.

The project includes villas, townhouses, artificial beaches, and community facilities. 


Sipchem’s shareholders to receive $388m in semi-annual dividends

Sipchem’s shareholders to receive $388m in semi-annual dividends
Updated 29 June 2022

Sipchem’s shareholders to receive $388m in semi-annual dividends

Sipchem’s shareholders to receive $388m in semi-annual dividends

RIYADH: Sahara International Petrochemical Co, or Sipchem, will distribute SR1.27 billion ($388 million) in dividends for the first half of 2022.

The payout per share stands at SR1.75, with nearly 726 million shares eligible for dividends, the petrochemicals maker said in a bourse filing.

The company had earlier reported a 162 percent increase in first-quarter profit to SR1.08 billion due to a higher share of profit from joint ventures.

Last year, Sipchem distributed a full-year dividend of SR1.64 billion, equivalent to SR2.25 per share, which is considered the highest in the company's history. 


Lulu Group ‘on track’ with $2.9bn investment into expansion

Lulu Group ‘on track’ with $2.9bn investment into expansion
Updated 29 June 2022

Lulu Group ‘on track’ with $2.9bn investment into expansion

Lulu Group ‘on track’ with $2.9bn investment into expansion
  • Lulu Group International is one of the few retailers that expanded during the COVID-19

DUBAI: Lulu Group International, the Middle East's largest organized retail chain, has announced that it is on track with its Dhs10.6 billion ($2.9 billion) investment into expansion. 

The group said it had 91 hypermarkets and smaller stores planned for opening between 2020 and 2023, making it one of the few retail groups to expand during the COVID-19 pandemic.

This brings the total number of hypermarkets, shopping malls, and fulfillment centers in the GCC, India, Malaysia, Indonesia, and Egypt to 235.

“Despite continued headwinds including COVID-19 and other challenges, we have continued to expand our operations across the world; we never stopped growing,” Nandakumar Vijayan, Director of Marketing and Corporate Communications at Lulu Group International, said at the RetailME Tech & Marcoms Summit held in Dubai.Lulu Group opened nine hypermarkets and two stores in 2020 and 24 hypermarkets and three stores at the height of the pandemic in 2021, according to Vijayan. So far in 2022, they have opened 14 hypermarkets and one store, with 11 more set to open by the end of the year.

“We are going to open 11 more hypermarkets this year and a further 27 hypermarkets and stores next year,” he continued.

The company typically invests around Dh125 million ($34 billion) in each hypermarket.

Lulu Group also has sourcing and regional offices in the US, UK, China, Turkey, India, Malaysia, Indonesia, Thailand, the Philippines, Vietnam, South Africa and Uganda and employs 57,000 people worldwide.

It has also partnered with the UAE government to support the UAE's food security program by supplying foodstuffs and consumer goods at low prices in order to protect UAE consumers from inflationary pressures.


Advances in desalination to boost hydrogen production: SWCC governor

Advances in desalination to boost hydrogen production: SWCC governor
Updated 29 June 2022

Advances in desalination to boost hydrogen production: SWCC governor

Advances in desalination to boost hydrogen production: SWCC governor

LAS PALMAS: Richer enhancement and innovation in the desalination sector could help produce green hydrogen in the future as Saudi Arabia heads toward a sustainable future, according to Abdullah Al Abdulkarim, governor of Saline Water Conversion Corp.

In an exclusive interview with Arab News on the sidelines of Desalination for the Environment: Clean Water and Energy held in Las Palmas, Gran Canaria, Al Abdulkarim said that zero liquid discharge in the water industry could make a paradigm shift that could catalyze the journey toward a sustainable future. 

ZLD is a water treatment approach where all water is recovered, and the residue is reduced to solid waste.

ZLD to improve sustainability

“We are talking about zero liquid discharge from our industry. Hydrogen is a part of our focus. We have a chance to produce hydrogen with a richer enhancement in our process. We can go for green hydrogen if we utilize renewable energy for water production,” said Al Abdulkarim.

Talking about going sustainable in the water industry, he said, “We have to bring the business to our nation, we have to reduce the cost of water production, we have to save the environment and we have to inspire them for a new arena of water production.”

Al Abdulkarim revealed that SWCC’s operation is aligned with the goals outlined in the Kingdom’s Vision 2030, and several targets were set on that mission, of which he said many had been achieved.

Miriam Balaban honored

During the event, Al Abdulkarim also honored Miriam Balaban, a publisher, editor and scientist recognized for her work in science communication and desalination.

Balaban, 97, who has been in the desalination field for 56 years told Arab News, “I was in Jubail, where there’s a big facility and research base now. There’s a wonderful teaching unit and everything in that very big plant. Saudis were the first to build a very big plant; they made this technology possible.

“I appreciate Saudi for the scientific research they have in the Kingdom, which has developed. They are also building the research which is looking ahead in development,” she added.