Oil slumps $10 per barrel as recession fears darken demand outlook

Global benchmark Brent crude was down $10.77, or 9.5 percent, at $102.73 a barrel by 11:43 a.m. EDT (1543 GMT).
Global benchmark Brent crude was down $10.77, or 9.5 percent, at $102.73 a barrel by 11:43 a.m. EDT (1543 GMT).
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Updated 05 July 2022

Oil slumps $10 per barrel as recession fears darken demand outlook

Oil slumps $10 per barrel as recession fears darken demand outlook

NEW YORK: Oil plummeted by about $10 a barrel on Tuesday on concerns of a looming global recession curtailing demand, even with expected supply disruptions as oil and gas workers in Norway began to strike.

Global benchmark Brent crude was down $10.77, or 9.5 percent, at $102.73 a barrel by 11:43 a.m. EDT (1543 GMT). US West Texas Intermediate crude fell $9.30, or 8.6 percent, to $99.13 a barrel from Friday’s close. There was no WTI settlement on Monday because of a US holiday.

“The market is getting tight, but still we're getting creamed and the only way you can explain that away is fear of recession in every risk asset,” said Robert Yawger, director, energy futures at Mizuho, New York. “You’re feeling the pressure.”

Oil futures sank along with equities, which often serve as demand indicator for crude, as investors fretted about the possibility of an economic downturn as central banks across the world take aggressive actions to limit inflation.

Supply concerns still linger, initially lifting WTI and Brent earlier in the session, due to potential output disruption in Norway, where offshore workers began a strike.

The strike is expected to reduce oil and gas output by 89,000 barrels per day, of which gas output makes up 27,500 bpd, Norwegian producer Equinor has said.

Saudi Arabia, the world’s top oil exporter, raised August crude oil prices for Asian buyers to near record levels amid tight supply and robust demand.

Meanwhile, Russia’s former President Dmitry Medvedev said a reported proposal from Japan to cap the price of Russian oil at about half its current level would mean less oil on the market and could push prices above $300-$400 a barrel.

G7 leaders agreed last week to explore the feasibility of introducing temporary import price caps on Russian fossil fuels, including oil, in an attempt to limit resources to finance Moscow’s “special military operation” in Ukraine.


TASI almost flat on higher inflation: Opening bell

TASI almost flat on higher inflation: Opening bell
Updated 12 sec ago

TASI almost flat on higher inflation: Opening bell

TASI almost flat on higher inflation: Opening bell

RIYADH: Saudi stocks started Monday’s session almost flat after the Saudi annual inflation rate increased to 2.7 percent in July, inciting uncertainty among investors.

TASI edged down 0.08 percent at 12,504, while the parallel market, Nomu, fell 0.16 percent at 22,005, as of 10:06 a.m. Saudi time.

Saudi Aramco shed 0.25 percent, despite achieving its highest quarterly profit since going public in 2019 with SR182 billion ($48.4 billion), a 90 percent jump over analysts' expectations.

Saudi Tadawul Group Holding Co. dropped 1.65 percent, following the announcement of a 23 percent decline in profits during the first half of the year to SR278 million.

Red Sea International Co. gained 4.96 percent to lead the gainers, after the real estate firm announced that its accumulated losses have been cut to zero, following a reduction in the company’s capital by SR298 million.

Saudi Printing and Packaging Co. climbed 2.45 percent, after the company narrowed its losses by 91.8 percent to SR2 million during the first half.

Basic Chemical Industries Co. lost 0.97 percent, despite achieving a 63 percent profit increase to SR46 million for the first half.

solutions by stc increased 0.43 percent, after its acquisition of Egypt’s Giza Systems has been approved by the Saudi competition authority.

Wafrah for Industry and Development Co. increased 1.86 percent, after the company swung to a profit of SR11 million during the first half of 2022.

Arabian Shield Cooperative Insurance Co. edged up 0.43 percent, despite a 30 percent profit decline to SR16 million for the first half.

The country's biggest lender Saudi National Bank declined 0.27 percent, while the Kingdom’s largest valued bank Al Rajhi fell 0.34 percent.


Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday
Updated 9 min 47 sec ago

Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday

RIYADH: Saudi stocks closed slightly lower on Sunday, tracking oil’s Friday drop.

TASI slipped 0.13 percent to 12,514, with shares of oil giant Aramco down 0.9 percent after reporting a record second-quarter profit of SR182 billion ($48.4 billion).

Aramco’s profit soared 80 percent in the second quarter of 2022 from SR95.5 billion a year earlier, beating the median of analysts’ forecasts with the highest quarterly profit since going public in 2019.

The Kingdom’s parallel Nomu market finished 0.08 percent higher at 22,041.

Elsewhere, Oman, Qatar, and Bahrain advanced 0.1, 0.4, and 0.8 percent, respectively, while the Kuwaiti index lost 0.7 percent.

Outside the Gulf, the Egyptian index EGX30 ended the session flat.

Oil prices continued to drop on Monday. Brent crude fell to $97 a barrel and US West Texas Intermediate reached $91.03 a barrel by 8:57 a.m. Riyadh time.

Stock news

Red Sea International Co. said its accumulated losses have dropped to zero, following an SR298 million capital reduction

Basic Chemical Industries Co. recorded a 63 percent profit increase to SR46 million for the first half of 2022

solutions by stc’s acquisition of a controlling stake in Egypt’s Giza Systems has been approved by the Saudi competition authority

Al Hassan Ghazi Ibrahim Shaker Co. achieved a net profit of SR26 million in the first half of 2022, a 72 percent increase from the first half of last year

Lazurde Co. for Jewelry reported a 22 percent profit rise in the first half of 2022 to SR22.2 million

Saudi Printing and Packaging Co.’s losses narrowed by 91.8 percent to SR2 million during the first half of 2022

Halwani Bros Co. reported a first-half profit decline of 65 percent to SR18 million

Middle East Paper Co.’s board proposed a 33 percent capital raise to SR666 million to support the company’s financial position and growth plans

Watani Iron Steel Co. saw its profit drop 15 percent to SR25 million during the first half of 2022

Calendar

August 15, 2022

Naqi Water Co. will start trading its shares on TASI


Saudi jeweler L’azurde posts 22% profit jump in H1 on strong retail sales

Saudi jeweler L’azurde posts 22% profit jump in H1 on strong retail sales
Updated 38 min 56 sec ago

Saudi jeweler L’azurde posts 22% profit jump in H1 on strong retail sales

Saudi jeweler L’azurde posts 22% profit jump in H1 on strong retail sales

RIYADH: Saudi jeweler L’azurde has reported a 22 percent profit rise in the first half of 2022 on the back of higher retail sales.

It reported a profit of SR22.2 million ($5.9 million) in the first half compared to SR18 million in the same period last year, according to a bourse filing.

The results were helped by higher revenues, higher gross profits, and reduced financing costs.

Saudi retail revenues surged 12.6 percent over the same period last year following the easing of precautionary measures regarding COVID-19.

In Egypt, retail revenues rose 5 percent due to an increase in revenues at the same stores, the opening of new outlets in the past year, and the increase in selling prices to counter the lower exchange rate, it said.


Red Sea International reduces $80m capital to write off accumulated losses 

Red Sea International reduces $80m capital to write off accumulated losses 
Updated 46 min 37 sec ago

Red Sea International reduces $80m capital to write off accumulated losses 

Red Sea International reduces $80m capital to write off accumulated losses 

RIYADH: Red Sea International Co. said its accumulated losses have dropped to zero, following an SR298 million ($80 million) capital reduction.

The Saudi-listed construction firm brought down its capital to SR302 million from SR600 million, by canceling nearly 30 million shares, according to a bourse filing.

The purpose of the transaction was to extinguish accumulated losses, which amounted to almost 58 percent of the capital, or SR346 million, as of June end.

Most recently, Red Sea International reported that its net loss widened by 7 percent to SR67 million in its financial results for the first half of 2022.


Saudi annual inflation rate rises to 2.7% in July driven by high food prices

Saudi annual inflation rate rises to 2.7% in July driven by high food prices
Updated 21 min 36 sec ago

Saudi annual inflation rate rises to 2.7% in July driven by high food prices

Saudi annual inflation rate rises to 2.7% in July driven by high food prices

RIYADH: Saudi Arabia’s annual inflation rate accelerated to 2.7 percent in July, from 2.3 percent in June, according to the recent data released by the General Authority for Statistics, also known as GASTAT.

The uptick in the Consumer Price Index, as it is called in technical terms, is driven by a rise in food and beverage prices, GASTAT added. 

According to the report, food and beverage prices showed an annual increase of 3.9 percent, while meat prices surged by 5.1 percent. 

“Food and beverages prices were the main drivers of the inflation rate in July 2022 due to their high relative importance in the Saudi consumer basket with a weight of 18.8 percent,” said GASTAT. 

Transport prices increased by 3.6 percent, mainly due to the increase in the purchase of motor cars prices which went up by 4.2 percent. 

The GASTAT report further revealed that personal goods and services prices in the Kingdom also increased by 2.1 percent. 

Restaurants and hotels prices increased by 6.3 percent, due to the increase in catering services prices, which went up by 6.5 percent, the report added.