Saudi Aramco to supply fuel at lower prices to Kenyan oil firm NOCK

Saudi Aramco to supply fuel at lower prices to Kenyan oil firm NOCK
Saudi Aramco will finance the shipments or provide the product with an extended credit period. (supplied)
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Updated 28 June 2022

Saudi Aramco to supply fuel at lower prices to Kenyan oil firm NOCK

Saudi Aramco to supply fuel at lower prices to Kenyan oil firm NOCK

RIYADH: State-owned National Oil Corp. of Kenya has signed a deal with Saudi oil giant Aramco to import fuel at lower prices than the global costs of crude, local media reported.

This comes as part of the government’s efforts to lower pump prices in the African state, Business Daily reported. 

As per the government-to-government deal, NOCK will import 30 percent of Kenya’s monthly petroleum requirements from August.

“We already signed the memorandum of understanding and the next phase is negotiating the contract terms, we are waiting on them as from last Sunday,” NOCK CEO Leparan ole Morintat told Business Daily. 

“The plan is to start trials in August, for two months and see the impact of the exclusive prices that Saudi Aramco will be giving us. Then we will fully start in October,” he added. 

The duration of the contract is not disclosed. 

Saudi Aramco will finance the shipments or provide the product with an extended credit period and the Kenyan company will pay within 60 and 90 days.


Oil up 3% on US crude stocks data, tight supply outlook

Oil up 3% on US crude stocks data, tight supply outlook
Updated 13 sec ago

Oil up 3% on US crude stocks data, tight supply outlook

Oil up 3% on US crude stocks data, tight supply outlook

NEW YORK: Oil prices gained about 3 percent on Thursday as robust US fuel consumption data and an expected drop in Russian supply later in the year offset concerns that slowing economic growth could undercut demand.

Brent futures rose $2.47, or 2.6 percent, to $96.12 a barrel by 11:41 a.m. EDT (1541 GMT), while US West Texas Intermediate crude rose $2.16, or 2.5 percent, to $90.27.

Prices rose more than 1 percent during the previous session, although Brent at one point fell to its lowest since February, as signs of a slowdown mounted in some places.

The oil complex is “advancing off the big (US) crude stock draw, increased product demand and (the) apparent stall in Iranian nuclear negotiations,” analysts at energy consulting firm Ritterbusch and Associates said in a note.

US. crude stocks fell by 7.1 million barrels in the week to Aug. 12, Energy Information Administration data showed, against expectations for a 275,000-barrel drop, as exports hit a record 5 million barrels per day.

Bans by the EU on Russian exports could dramatically tighten supply when curbs to seaborne crude and products imports into the bloc ramp up in coming months and drive up prices, analysts warn.

“The EU embargoes will force Russia to shut in around 1.6 million (bpd) of output by year-end, rising to 2 million bpd in 2023,” consultancy BCA research said in a note. “EU embargoes on Russian oil imports will significantly tighten markets and lift Brent to $119 a barrel by year-end.”

Russia, however, forecasts rising output and exports until the end of 2025, an economy ministry document seen by Reuters showed, saying revenue from energy exports will rise 38 percent this year, partly due to higher oil export volumes.

More cautious

Preventing oil prices from rising too high was the possibility of increased supplies from Iran and worries that demand could drop if China imposes more lockdowns to stop the spread of COVID-19, along with slowing economic growth as central banks raise interest rates to control runaway inflation.

The market is awaiting developments from talks to revive Iran’s 2015 nuclear deal with world powers, which could lead to a roughly 1 million bpd boost in Iranian oil exports.

“We may be seeing traders taking a more cautious approach considering how close a decision on the Iran nuclear deal appears to be,” said Craig Erlam, senior market analyst at OANDA. “There remains plenty of doubt that it will get over the line but if it does, that could be the catalyst for another move lower.”


OPEC chief says blame policymakers, lawmakers for oil price rises

OPEC chief says blame policymakers, lawmakers for oil price rises
Updated 6 min 37 sec ago

OPEC chief says blame policymakers, lawmakers for oil price rises

OPEC chief says blame policymakers, lawmakers for oil price rises
  • Says keen to extend deal with Russia beyond 2022
  • Oil’s recent slide reflects fears, physical demand robust
  • Al-Ghais relatively optimistic on outlook for 2023

LONDON: Policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not the Organization for the Petroleum Exporting Countries, the producer group’s new secretary-general, Haitham Al-Ghais, told Reuters on Thursday.

A lack of investment in the oil and gas sector following a price slump sparked by COVID-19 has significantly reduced OPEC’s spare production capacity and limited the group’s ability to respond quickly to further potential supply disruption.

The price of Brent crude came close to an all-time high of $147 a barrel in March, after Russia’s ordering of troops into Ukraine exacerbated supply concerns. While prices have since declined, they are still painfully high for consumers and businesses globally.

“Don’t blame OPEC, blame your own policymakers and lawmakers, because OPEC and the producing countries have been pushing time and time against for investing in oil (and gas),” Al-Ghais, who took office on Aug. 1, said in an online interview.

Oil and gas investment is up 10 percent from last year but remains well below 2019 levels, the International Energy Agency said last month, adding that some of the immediate shortfalls in Russian exports needed to be met by production elsewhere.

The OPEC official also pointed the finger at a lack of investment in the downstream sector, adding that OPEC members had increased refining capacity to balance the decline in Europe and the US.

“We are not saying that the world will live on fossil fuels forever ... but by saying we’re not going to invest in fossil fuels ... you have to move from point A to point B overnight,” Al-Ghais said.

OPEC exists to ensure the world gets enough oil, but “it’s going to be very challenging and very difficult if there is no buy-in into the importance of investing,” he said, adding that he hopes “investors, financial institutions, policymakers as well globally seriously take this matter (to) heart and take it into their plans for the future.”

Relatively optimistic 

Oil has tumbled since March and Brent hit a six-month low below $92 a barrel this week.

The slide reflects fears of economic slowdown and masks physical market fundamentals, Al-Ghais said as he took a relatively optimistic view on the outlook for 2023 as the world tackles rising inflation.

FASTFACTS

Oil and gas investment is up 10 percent from last year but remains well below 2019 levels, the International Energy Agency said last month, adding that some of the immediate shortfalls in Russian exports needed to be met by production elsewhere.

Oil has tumbled since March and Brent hit a six-month low below $92 a barrel this week.

OPEC, plus Russia and other allies, known as OPEC+, has unwound record oil-output cuts made in 2020 at the height of the pandemic and in September is raising output by 100,000 barrels per day.

Ahead of the next meeting which OPEC+ holds on Sept. 5, Al-Ghais said it was premature to say what it will decide.

“There is a lot of fear,” he said. “There is a lot of speculation and anxiety, and that’s what’s predominantly driving the drop in prices.”

“Whereas in the physical market we see things much differently. Demand is still robust. We still feel very bullish on demand and very optimistic on demand for the rest of this year.”

“The fears about China are really taken out of proportion in my view,” said Al-Ghais, who worked in China for four years earlier in his career. “China is a phenomenal place of economic growth still.”

OPEC, plus Russia and other allies, known as OPEC+, has unwound record oil-output cuts made in 2020 at the height of the pandemic and in September is raising output by 100,000 barrels per day.

Ahead of the next meeting which OPEC+ holds on Sept. 5, Al-Ghais said it was premature to say what it will decide, although he was positive about the outlook for next year.

“I want to be very clear about it — we could cut production if necessary, we could add production if necessary.”

“It all depends on how things unfold. But we are still optimistic, as I said. We do see a slowdown in 2023 in demand growth, but it should not be worse than what we've had historically.”

“Yes, I am relatively optimistic,” he added of the 2023 outlook. “I think the world is dealing with the economic pressures of inflation in a very good way.”

OPEC+ began to restrain supply in 2017 to tackle a supply glut that built up in 2014-2016, and OPEC is keen to ensure Russia remains part of the OPEC+ oil production deal after 2022, Al-Ghais said.

“We would love to extend the deal with Russia and the other non-OPEC producers,” he said.

“This is a long-term relationship that encompasses broader and more comprehensive forms of communication and cooperation between 23 countries. It’s not just in terms of production adjustment.”


Saudi Jamjoom Pharma to invest $52m in Uzbekistan as it eyes Central Asia expansion

Saudi Jamjoom Pharma to invest $52m in Uzbekistan as it eyes Central Asia expansion
Updated 18 August 2022

Saudi Jamjoom Pharma to invest $52m in Uzbekistan as it eyes Central Asia expansion

Saudi Jamjoom Pharma to invest $52m in Uzbekistan as it eyes Central Asia expansion

JEDDAH: Saudi Arabian pharmaceutical firm Jamjoom Pharma has signed an agreement to invest over $52 million in Uzbekistan, as the firm continues its expansion into the Central Asian region, the company's vice chairman said.

In an exclusive interaction with Arab News on the sidelines of the fourth meeting of the Saudi-Uzbeki Business Council in Jeddah, Mahmoud Jamjoom, vice chairman of Jamjoom Pharma, said that launching its operations in Uzbekistan is a gateway to the region.

“Already, we are in 30-plus countries. Now, we are trying to focus on this area (Central Asia). We are covering Uzbekistan, Afghanistan, and Turkmenistan. So, this will be the gate to cover the area,” said Jamjoom.

He said that the operations in Uzbekistan will begin soon once they receive approvals from regulators.

“We will be submitting the files. We will then start presenting the product in Uzbekistan. And step by step, we will have local manufacturing,” added the vice chairman.


PIF-owned SRC, Riyad Bank sign $133m deal to acquire real estate financing portfolio

PIF-owned SRC, Riyad Bank sign $133m deal to acquire real estate financing portfolio
Updated 18 August 2022

PIF-owned SRC, Riyad Bank sign $133m deal to acquire real estate financing portfolio

PIF-owned SRC, Riyad Bank sign $133m deal to acquire real estate financing portfolio

RIYADH: The Saudi Real Estate Refinance Co., wholly owned by the Public Investment Fund, signed a SR500 million ($133 million) agreement with Riyad Bank to acquire a real estate financing portfolio affiliated with the lender.

As the second largest real estate refinancing transaction in the Saudi banking sector, the agreement aims to achieve sustainability, provide long-term liquidity in the residential real estate finance market, the Saudi Press Agency reported. 

The deal comes as part of SRC’s ongoing efforts to expand its partnerships with real estate financiers in the Kingdom, CEO Fabrice Susini said. 

Such agreements will support real estate finance service providers by providing them with liquidity management solutions to provide affordable real estate financing to Saudi families wishing to own homes.

This contributes to achieving the goals of the Iskan Program, which is part of Saudi Vision 2030, that aims to  to raise the percentage of home ownership of Saudi families to 70 percent by 2030.


Macro Snapshot — Turkey’s central bank slashes interest rate; Spain’s trade deficit widens almost to $32bn 

Macro Snapshot — Turkey’s central bank slashes interest rate; Spain’s  trade deficit widens almost to $32bn 
Updated 18 August 2022

Macro Snapshot — Turkey’s central bank slashes interest rate; Spain’s trade deficit widens almost to $32bn 

Macro Snapshot — Turkey’s central bank slashes interest rate; Spain’s  trade deficit widens almost to $32bn 

CAIRO: Turkey’s central bank shocked markets on Thursday by cutting its main interest rate by 100 basis points to 13 percent, saying it needed to keep driving economic growth despite inflation hitting nearly 80 percent and a monetary tightening trend among its peers worldwide.

The lira dropped more than 1 percent as the bank took its latest step down the unorthodox policy path advocated by President Recep Tayyip Erdogan that aims to provide targeted cheap credit to help boost Turkish exports.

There had been virtually no signal that another rate cut was in the works and no economist polled by Reuters had predicted one, given that inflation has soared to 24-year highs, eating deeply into Turks’ earnings and savings.

US weekly jobless claims dip 

The number of Americans filing new claims for unemployment benefits fell last week and data for the prior period was revised sharply down, suggesting labor market conditions remain tight, though higher interest rates are slowing momentum.

The weekly unemployment claims report from the Labor Department on Thursday added to strong industrial production in July and underlying retail sales growth in allaying fears that the economy was in recession. The claims report, the most timely data on the economy’s health, could give the Federal Reserve ammunition to deliver another hefty rate hike next month.

“Fears of broad-based layoffs have yet to materialize,” said Mahir Rasheed, a US economist at Oxford Economics in New York. “Still, we doubt claims will accelerate sharply as labor demand remains well ahead of labor supply, while the outlook for the economy remains relatively positive despite elevated uncertainty regarding inflation and growth.”

Chile’s economy grows 

Chile’s economy expanded 5.4 percent in the second quarter of 2022 from a year earlier, central bank data showed on Thursday, below expectations of a 5.7 percent increase from economists polled by Reuters.

The gross domestic product showed no growth from the previous three months in seasonally adjusted terms. Economists were expecting a 0.3 percent rise.

Spain’s trade deficit widens 

Spain’s trade deficit in the first six months of the year widened almost six-fold from the same period a year earlier to €32 billion ($32.6 billion), the Industry Ministry said on Thursday.

The outcome was wider than the deficit for the whole of 2021 and compared with a €5.4 billion deficit in the first six months a year ago, the ministry said in its monthly report.

Excluding energy imports and exports, the trade deficit in the period was €6.1 billion, the ministry said.

 

(With input from Reuters)