Oil Updates — Crude falls again; Russia eyeing new markets in Middle East and Africa

Oil Updates — Crude falls again; Russia eyeing new markets in Middle East and Africa
Russia is increasing gasoline and naphtha supplies to Africa and the Middle East (Shutterstock)
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Updated 23 June 2022

Oil Updates — Crude falls again; Russia eyeing new markets in Middle East and Africa

Oil Updates — Crude falls again; Russia eyeing new markets in Middle East and Africa

RIYADH: Oil prices continued to pull back on Thursday, dropping more than 2 percent as investors recalibrated assessments of recession risks and fuel demand amid interest rate hikes in major economies.

US West Texas Intermediate crude futures had skidded $2.6, or 2.7 percent, to $103.46 a barrel by 0330 GMT. 

Brent crude futures slid $2.5, or 2.3 percent, to $109.22 a barrel.

Both benchmarks tumbled by as much as $3 a barrel in the early morning of Asian trading, after plunging around 3 percent in the previous session. They are at their lowest levels since mid-May.

Russia seeks fuel markets in Africa, Middle East as Europe turns away

Russia is increasing gasoline and naphtha supplies to Africa and the Middle East as it struggles to sell fuel in Europe, while Asia is already taking bigger volumes of Russian crude, Refinitiv Eikon data showed and sources said.

The development is likely to increase competition for Asian customers between Russia and other big fuel exporters – Saudi Arabia and the US – which are the top three suppliers to Asia.

The EU has slowly reduced imports of Russian crude and fuel since March and agreed to a full embargo that will take effect by the end of 2022.

Asian buyers have stepped in to rapidly increase purchases of Russian crude, even though Asia is not a natural market for Russian fuel because it refines more oil than it needs and is a net fuel exporter.

That makes finding new outlets such as Africa and the Middle East paramount for Russia to protect its global market share and avert a deeper decline in oil exports and output.

Norway oil service workers agree to wage deal

Two Norwegian labor unions have signed new wage deals with oil service companies, the organizations said on Thursday, preventing a strike among workers.

Some 646 members of the Safe and Industri Energi unions had threatened to go on strike at companies such as Schlumberger, Baker Hughes, and Subsea 7 unless a deal was reached.


Saudi Exchange to allow single-stock futures in July on selected shares to bolster liquidity

Saudi Exchange to allow single-stock futures in July on selected shares to bolster liquidity
Updated 12 sec ago

Saudi Exchange to allow single-stock futures in July on selected shares to bolster liquidity

Saudi Exchange to allow single-stock futures in July on selected shares to bolster liquidity

RIYADH: Saudi Arabia’s stock exchange will launch futures trading on single stocks on July 4, amid efforts to bolster liquidity and lure investors into the region’s biggest bourse.

It added that the first tranche of the futures contracts will include Al Rajhi Bank, Saudi Aramco, Saudi National Bank, Alinma Bank, SABIC, Saudi Kayan, Saudi Telecom Co., Saudi Electricity Co., Almarai, and Ma’aden. 

A single-stock future is a type of futures contract between two parties to exchange a specified number of stocks in a company for a price agreed today with delivery occurring at a specified future date.

The move will “enable local and international investors to hedge and manage portfolio risks more effectively as well as diversify products available for trading and hedging in the market,” Tadawul said in a statement.

Single-stock futures will be the second derivatives product on the Kingdom’s bourse, after the launch of index futures in late 2020.


Oil Updates — Oil settled up; G7 considering ways of capping Russian oil price; US drillers add oil and gas rigs for a record 23 months

Oil Updates — Oil settled up; G7 considering ways of capping Russian oil price; US drillers add oil and gas rigs for a record 23 months
Updated 15 min 16 sec ago

Oil Updates — Oil settled up; G7 considering ways of capping Russian oil price; US drillers add oil and gas rigs for a record 23 months

Oil Updates — Oil settled up; G7 considering ways of capping Russian oil price; US drillers add oil and gas rigs for a record 23 months

RIYADH: Oil prices settled up by more than $3 a barrel on Friday, supported by tight supply, but they notched their second weekly decline on concern that rising interest rates could push the world economy into recession.

Brent crude settled up $3.07, or 2.8 percent, at $113.12 a barrel by 12:10 p.m. EDT. US West Texas Intermediate crude settled up $3.35, or 3.2 percent, at $107.62.

No government guidance on pricing policy: Incoming Petrobras CEO 

The incoming CEO of Brazil’s state-run oil company Petrobras told a corporate committee he has not received any guidance from the government on changing the firm’s fuel pricing policy, a document showed on Saturday.

Caio Mario Paes de Andrade, a former economy ministry official appointed by President Jair Bolsonaro to run Petrobras, was approved by the eligibility committee on Friday, a key step for him to take the reins of the company.

The minutes of the meeting, published by Petrobras on Saturday, showed the committee had asked Andrade about the company’s pricing policy, a topic that helped bring down three CEOs during Bolsonaro’s tenure as price hikes created tensions with the far-right leader.

“I have no specific or general guidance from the controlling shareholder or any other shareholder in the sense of changing the company’s pricing policy,” Andrade said.

He is on the verge of taking over as CEO a month after he was named by Bolsonaro, awaiting a board vote on June 27.

G7 considering ways of capping Russian oil price

Leaders of the Group of Seven rich democracies are having “very constructive” discussions on a possible cap on Russian oil imports, a German government official said on Saturday shortly before the start of the annual three-day G7 summit.

The proposal is part of broader G7 discussions on how to further crank up the pressure on the Kremlin over its invasion of Ukraine without stoking global inflationary pressures.

The Ukraine war, energy and food shortages and the darkening global economic outlook are expected to dominate the agenda of the summit that is taking place this year in Schloss Elmau, an alpine castle resort in southern Germany.

The US, Canada and Britain have already banned imports of Russian oil while EU leaders have agreed on an embargo that will take full effect by the end-2022 as part of sanctions on the Kremlin over its invasion of Ukraine.

With energy prices soaring though, the West fears such embargoes will not actually put a dent in Russia’s war chest as the country earns more from exports even as volumes fall.

A price cap could solve that dilemma, while also avoiding further restricting oil supply and fueling inflation, officials say, but for it to work, it requires buy-in from heavy importers like India and China.

“We are on a good path to reach an agreement,” the official said.

The official said the G7 was also discussing the need to combine ambitious climate goals with the need for some countries to explore new gas fields as Europe rushed to wean itself off Russian gas imports.

US drillers add oil and gas rigs for a record 23 months

US energy firms this week added oil and natural gas rigs for a second week in a row, in a record 23-month streak of increases, as high crude prices and prodding by the government prompted drillers to return to the well pad.

The oil and gas rig count, an early indicator of future output, rose 13 to 753 in the week to June 24, its highest since March 2020, energy services firm Baker Hughes Co. said in its closely followed report on Friday.

Baker Hughes said that puts the total rig count up 283, or 60 percent, over this time last year.

US oil rigs rose 10 to 594 this week, their highest since March 2020, while gas rigs gained three to 157, their highest since September 2019.

That put the overall oil and gas rig count up for a record 23 months in a row, gaining 26 in June. It also put the count up for seven quarters in a row, the longest streak of gains since 2011.

The oil rig count was up for a record 22 months in a row, rising 20 in June. It also increased for the seventh quarter, the most quarters since 2012.

The gas rig count rose by six in June, rising for a 10th month in a row, tying the record set in May 2010. It also put the gas count up for seven quarters in a row, matching the record set in 2004.

(With inputs from Reuters) 

 


G7 considering ways of capping Russian oil price — German official

G7 considering ways of capping Russian oil price — German official
Updated 26 June 2022

G7 considering ways of capping Russian oil price — German official

G7 considering ways of capping Russian oil price — German official
  • The proposal is part of broader G7 discussions on how to further crank up the pressure on the Kremlin over its invasion of Ukraine without stoking global inflationary pressures

SCHLOSS ELMAU, Germany: Leaders of the Group of Seven rich democracies are having “very constructive” discussions on a possible cap on Russian oil imports, a German government official said on Saturday shortly before the start of the annual three-day G7 summit.
The proposal is part of broader G7 discussions on how to further crank up the pressure on the Kremlin over its invasion of Ukraine without stoking global inflationary pressures.
The Ukraine war, energy and food shortages and the darkening global economic outlook are expected to dominate the agenda of the summit that is taking place this year in Schloss Elmau, an alpine castle resort in southern Germany.
The United States, Canada and Britain have already banned imports of Russian oil while European Union leaders have agreed an embargo that will take full effect by end-2022 as part of sanctions on the Kremlin over its invasion of Ukraine.
With energy prices soaring though, the West fears such embargoes will not actually put a dent in Russia’s war chest as the country earns more from exports even as volumes fall.
A price cap could solve that dilemma, while also avoiding further restricting oil supply and fueling inflation, officials say, but for it to work, it requires buy-in from heavy importers like India and China.
“We are on a good path to reach an agreement,” the official said.
The official said the G7 was also discussing the need to combine ambitious climate goals with the need for some countries to explore new gas fields as Europe rushed to wean itself off Russian gas imports.


Inflation sparks global wave of protests for higher pay

Inflation sparks global wave of protests for higher pay
Updated 25 June 2022

Inflation sparks global wave of protests for higher pay

Inflation sparks global wave of protests for higher pay
  • Economists say Russia’s war in Ukraine amplified inflation by further pushing up the cost of energy

NEW YORK: Rising food costs. Soaring fuel bills. Wages that are not keeping pace. Inflation is plundering people’s wallets, sparking a wave of protests and workers’ strikes around the world.

This week alone saw protests by the political opposition in Pakistan, nurses in Zimbabwe, unionized workers in Belgium, railway workers in Britain, Indigenous people in Ecuador, hundreds of US pilots and some European airline workers. Sri Lanka’s prime minister declared an economic collapse Wednesday after weeks of political turmoil.

Economists say Russia’s war in Ukraine amplified inflation by further pushing up the cost of energy and prices of fertilizer, grains and cooking oils as farmers struggle to grow and export crops in one of the world’s key agricultural regions.

As prices rise, inflation threatens to exacerbate inequalities and widen the gap between billions of people struggling to cover their costs and those who are able to keep spending.

“We are not all in this together,” said Matt Grainger, head of inequality policy at antipoverty organization Oxfam. “How many of the richest even know what a loaf of bread costs? They don’t really, they just absorb the prices.”

Oxfam is calling on the Group of 7 leading industrialized nations, which are holding their annual summit this weekend in Germany, to provide debt relief to developing economies and to tax corporations on excess profits.

“This isn’t just a standalone crisis. It’s coming off the back of an appalling pandemic that fueled increased inequality worldwide,” Grainger said. “I think we will see more and more protests.”

The demonstrations have caught the attention of governments, which have responded to soaring consumer prices with support measures like expanded subsidies for utility bills and cuts to fuel taxes. Often, that offers little relief because energy markets are volatile. Central banks are trying to ease inflation by raising interest rates.

Meanwhile, striking workers have pressured employers to engage in talks on raising wages to keep up with rising prices.

Eddie Dempsey, a senior official with Britain’s Rail, Maritime and Transport Union, which brought UK train services to a near standstill with strikes this week, said there are going to be more demands for pay increases across other sectors.

“It’s about time Britain had a pay rise. Wages have been falling for 30 years and corporate profits have been going through the roof,” Dempsey said.

Last week, thousands of truckers in South Korea ended an eight-day strike that caused shipment delays as they called for minimum wage guarantees amid soaring fuel prices.

Months earlier, some 10,000 kilometers (6,200 miles) away, truckers in Spain went on strike to protest fuel prices.

Peru’s government imposed a brief curfew after protests against fuel and food prices turned violent in April. Truckers and other transport workers also had gone on strike and blocked key highways.

Protests over the cost of living ousted Sri Lanka’s prime minister last month. Middle-class families say they’re forced to skip meals because of the island nation’s economic crisis, prompting them to contemplate leaving the country altogether.

The situation is particularly dire for refugees and the poor in conflict areas such as Afghanistan, Yemen, Myanmar and Haiti, where fighting has forced people to flee their homes and rely on aid organizations, themselves struggling to raise money.


Boeing expects demand to be back to pre-pandemic levels by 2024, says top official

Boeing expects demand to be back to pre-pandemic levels by 2024, says top official
Updated 25 June 2022

Boeing expects demand to be back to pre-pandemic levels by 2024, says top official

Boeing expects demand to be back to pre-pandemic levels by 2024, says top official

DOHA: Boeing anticipates global demand to see about 4 percent annual growth year over year for the next two decades, expecting to be back to pre-pandemic levels by 2024, said Omar Arekat, the company’s Middle East and Africa VP of commercial sales and marketing. He added that the growth for the Middle East would be slightly above that at 4.2 percent year over year.

During the Annual General Meeting of the International Air Transport Association, Arekat told Arab News that the market is growing, and there is a demand for roughly 3,000 cargo and freighters in the Gulf Cooperation Council region.

“We see that there is a recovery coming and our market is a very resilient market,” he added.

Despite a recovery, Boeing is still not quite at pre-pandemic levels, Arekat said. “We are seeing the recovery move much quicker than anticipated, especially on the regional and domestic fronts,” he informed.

Airlines returned to almost 100 percent of their operational capacity for regional and domestic travel, Arekat said. Internationally, it is growing, but it isn’t completely there yet, he added.

Based on peak season base, Boeing is 70 to 75 percent behind 2019, Arekat said.

He believed that the GCC is doing better than the rest of the world in terms of recovery. There has been strong growth in intra-regional travel, and international travel is increasing quickly, he said. “So we anticipate that we would see a recovery to 2019 levels by the year 2024,” Arekat added.

According to Arekat, the GCC region and the Middle East are important markets for Boeing.

Boeing and Qatar Airways signed a Memorandum of Understanding earlier this year for the purchase of up to 50 Boeing 737 Max aircraft, he said, adding that by 2024, the aircraft will begin being delivered.

“Qatar Airways announced a MoU for the purchase of 25 Boeing 737 Max with an option for another 25,” he said.

Arekat informed that Qatar Airways was the launch customer for 777-8 Freighter with a firm order for 34 jets earlier this year.

Boeing is currently working with Saudi Arabia on different opportunities. “The Saudi market has a lot of potential for growth,” he added.

Being a pioneer in sustainability, Boeing also plans to add the Boeing 777-200 to the sustainability program in 2023, he said. The company also has the Boeing 737 Max, which runs on sustainable fuel, and Etihad’s Boeing 787, the Greenliner. Boeing has been investing continuously in expanding its fuel-testing platform and leads the way in that area, he concluded.

“It’s in early stages right now and the demand will grow but the focus right now is on making sure that it’s affordable, and it’s available and produced widely,” he said.