Oil Updates — Brent oil stalls; Dragon Oil extends  $1bn Turkmenistan deal; Ecuador oil output rebounds

Oil Updates — Brent oil stalls; Dragon Oil extends  $1bn Turkmenistan deal; Ecuador oil output rebounds
Brent crude futures for September settlement edged up 0.2 percent, or 22 cents, to $113.73 a barrel by 0432 GMT. (Shutterstock)
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Updated 05 July 2022

Oil Updates — Brent oil stalls; Dragon Oil extends  $1bn Turkmenistan deal; Ecuador oil output rebounds

Oil Updates — Brent oil stalls; Dragon Oil extends  $1bn Turkmenistan deal; Ecuador oil output rebounds

RIYADH: Brent oil prices were little changed on Tuesday, reversing earlier gains of $1, as investors weighed supply concerns, highlighted by a potential production cut in Norway, and worries about a possible global recession curtailing fuel demand.

Brent crude futures for September settlement edged up 0.2 percent, or 22 cents, to $113.73 a barrel by 0432 GMT.

US West Texas Intermediate crude climbed $1.95, or 1.8 percent, to $110.38 a barrel, from Friday’s close. There was no settlement for WTI on Monday because of the Independence Day public holiday in the US.

Dragon Oil extends Turkmenistan partnership in $1 billion deal

Dubai-based Dragon Oil signed a $1 billion deal to renew its production partnership in Turkmenistan with state-owned Turkmen Oil for 10 years after the current contract expires in May 2025, state news agency WAM said on Monday.

Of the total value, $500 million will be paid in cash while the remaining $500 million will be paid over 13 years.

Ecuador oil output recovers by about 90 percent 

Ecuador’s oil output has recovered by about 90 percent since a deal between the government and demonstrators ended nationwide protests late last week, the ministry of mines and energy said on Monday.

Protests erupted in Ecuador in June to demand lower fuel prices and limits on the expansion of the mining and oil industries. The demonstrations led to at least eight deaths and devastated the country’s oil production.

Last Thursday, the government of President Guillermo Lasso and indigenous leaders signed a pact to end the crisis. At the time, oil output was around 262,000 barrels per day. It has since rebounded to 461,637 bpd, the ministry of mines and energy said in a statement.

“Some 952 oil wells have been reactivated, which means that about 10 percent of the suspended wells still need to be recovered,” Ecuador’s Energy Minister Xavier Vera said in the statement.

State-run oil company Petroecuador on Monday also reported a 90 percent recovery in production.

While the company on Friday estimated it would take a week to recover 90 percent of its output, production had risen to 361,535 bpd as of Sunday, it said.

“Thanks to these efforts, just 82 wells remain closed, of the almost 1,000 that were affected by acts of vandalism,” Petroecuador’s manager Italo Cedeno said in a statement.

The company was forced to issue a wide force majeure declaration across the oil industry on June 18 amid the protests.

The notice, enforced at the end of June, is expected to be lifted on July 7, once the company can assure customers that supply contracts will be fulfilled.

Norwegian oil and gas workers start strike, cutting output

Norwegian offshore workers on Tuesday began a strike that will reduce oil and gas output, the union leading the industrial action told Reuters.

The strike, in which workers are demanding wage hikes to compensate for rising inflation, comes amid high oil and gas prices, with supplies of natural gas to Europe especially tight after Russian export cutbacks.

“The strike has begun,” Audun Ingvartsen, the leader of the Lederne trade union said in an interview.

The Norwegian government has said it was following the conflict “closely.” It can intervene to stop a strike if there are exceptional circumstances.

On Tuesday, oil and gas output will be reduced by 89,000 barrels of oil equivalent per day, of which gas output makes up 27,500 boepd, Equinor has said.

On Wednesday, the strike will deepen the cut to the country’s gas output to a total of 292,000 barrels of oil equivalent per day, or 13 percent of output, NOG said on Sunday. 

From Wednesday oil output will be cut by 130,000 barrels per day, the lobby had said, corresponding to around 6.5 percent of Norway’s production, according to a Reuters calculation.

(With inputs from Reuters) 

 


India may scrap wheat import duty to cool domestic prices, say sources

India may scrap wheat import duty to cool domestic prices, say sources
Updated 11 sec ago

India may scrap wheat import duty to cool domestic prices, say sources

India may scrap wheat import duty to cool domestic prices, say sources

MUMBAI: India could scrap a 40 percent duty on wheat imports and cap the amount of stocks traders can hold to try to dampen record high domestic prices in the world’s second-biggest producer, government and trade officials told Reuters on Monday.

Late in the day, the Trade Ministry said it would restrict the export of some wheat-derived products like finely milled “maida” and semolina from Aug. 14, with only an inter-ministerial committee allowed to clear their shipment. Exports of the items are generally small.

India barred wheat exports in May after the crop suffered a heatwave, but domestic prices still rose to a record high. Yet, international prices are still way above the domestic market, making it unviable for traders to buy from abroad.

If the government does remove the duty, and international prices also fall, then traders say they could start importing, especially during the upcoming festival season, when higher demand typically drives domestic prices higher.

“We are exploring all possible options to bring down the prices,” said a senior government official who held a discussion with industry officials last week.

New Delhi could scrap the 40 percent import duty and impose stock limits on wholesalers and traders to signal to the market that the government will do everything in its power to keep prices in check, said the official, who declined to be named due to the sensitivity of the subject.

Domestic wheat prices ended last week at a record 24,000 rupees ($301.57) per ton, having risen 14 percent from lows struck after the government surprised markets on May 14 by banning exports, ending hopes that India could fill the market gap left by missing Ukraine grain.

Domestic prices are still nearly a third lower than global prices, said a Mumbai-based trader with a global trading firm, who described Indian wheat as the cheapest in the world.

India last imported wheat in the April 2017 to March 2018 financial year.

“If global prices fall by another 20 percent and Indian prices continue their rally, then maybe, sometime after a few months, imports might become feasible,” the trader said.

The government has limited options to intervene in the market this year since its procurement has fallen 57 percent to 18.8 million tons, said a New Delhi-based dealer with a global trading firm.


Oil hover near multi-month lows on demand worries

Oil hover near multi-month lows on demand worries
Updated 11 min 22 sec ago

Oil hover near multi-month lows on demand worries

Oil hover near multi-month lows on demand worries
  • Russian crude, oil products exports continue to flow ahead of an impending EU embargo

LONDON: Oil prices hovered near multi-month lows on Monday as lingering worries about demand weakening on the back of a darkened economic outlook outweighed some positive economic data from China and the US.

Erasing earlier gains, Brent crude futures were down 55 cents, or 0.6 percent, at $94.37 a barrel by 1331 GMT. US West Texas Intermediate crude was at $88.25 a barrel, down 76 cents, or 0.9 percent.

Front-month Brent prices last week hit the lowest since February, tumbling 13.7 percent and posting their largest weekly drop since April 2020, while WTI lost 9.7 percent, as concerns about a recession hitting oil demand weighed on prices.

“Last week’s price action left no doubt that recession-driven demand concerns have the upper hand over supply fears. One could even go as far as saying the war premium has evaporated,” PVM analyst Stephen Brennock said.

Both contracts recouped some losses on Friday after jobs growth in the US, the world’s top oil consumer, unexpectedly accelerated in July.

On Sunday, China also surprised markets with faster-than-expected growth in exports.

China, the world’s top crude importer, brought in 8.79 million barrels per day of crude in July, up from a four-year low in June, but still 9.5 percent less than a year earlier, customs data showed.

In Europe, Russian crude and oil products exports continued to flow ahead of an impending embargo from the EU that will take effect on Dec. 5.

Last week, the Bank of England warned of a protracted recession in Britain.

Gasoline demand in the US continues to weaken despite falling prices at the pump, and stockpiles are rising.

In terms of US production, energy firms last week cut the number of oil rigs by the most since September in the first drop in 10 weeks.

The US clean energy sector received a boost after the Senate on Sunday passed a sweeping $430 billion bill.


China’s Huawei set to finalize data center location in Saudi Arabia 

China’s Huawei set to finalize data center location in Saudi Arabia 
Updated 32 min 39 sec ago

China’s Huawei set to finalize data center location in Saudi Arabia 

China’s Huawei set to finalize data center location in Saudi Arabia 

RIYADH: China’s tech giant Huawei is soon to decide the location of its data center in Saudi Arabia, president of Huawei Cloud Middle East told Gulf News. 

The data center in Saudi Arabia will be Huawei’s second in the Middle East, following Abu Dhabi.

“We are in the final stages of the Saudi decision — the investment decision has already been made,” Frank Dai explained. “All that’s left is where in Riyadh should the facility be built.”

He added: “The Middle East remains central to our vision of how digital transformation can reshape economies, even change the world. This is only the beginning of what data-driven economies can achieve.”


Wizz Air to resume flights from UAE to Russia in October

Wizz Air to resume flights from UAE to Russia in October
Updated 57 min 23 sec ago

Wizz Air to resume flights from UAE to Russia in October

Wizz Air to resume flights from UAE to Russia in October

DUBAI: European budget airline Wizz Air will resume flights from Abu Dhabi to Moscow from October, it said on Thursday, more than five months after the carrier suspended all services to Russia following Moscow’s invasion of Ukraine in February.

The airline’s Abu Dhabi-based joint venture, Wizz Air Abu Dhabi, will operate the daily flight from Oct. 3, with fares starting from 359 dirham ($97.74), it said in a statement.

Wizz Air, which in October 2021 announced the Abu Dhabi to Moscow flights would start in December that year, said on Feb. 27 it had suspended all flights to Russia.

Other Emirati carriers, including Emirates, have continued to operate services to Russia following the invasion of Ukraine.

Wizz Air Abu Dhabi is a joint venture between Abu Dhabi sovereign wealth fund ADQ and the European airline. It is based in Abu Dhabi and is a UAE registered carrier.


Public private partnerships to be encouraged in key Saudi region by new company

Public private partnerships to be encouraged in key Saudi region by new company
Updated 08 August 2022

Public private partnerships to be encouraged in key Saudi region by new company

Public private partnerships to be encouraged in key Saudi region by new company

RIYADH: Private businesses will be encouraged to work closely with the public sector on projects in Saudi Arabia’s Qassim region thanks to the creation of a new specialist organization.

The Qassim Region Municipality Company was given the go-ahead to form and create a board of directors by the Ministry of Municipal and Rural Affairs and Housing.

The company aims to enhance investment activity in the municipal sector in the Qassim region and to establish development projects in partnership with the private sector.