Oil drops to 12-week low on recession worries

Oil prices were also knocked down by a soaring US dollar , which rose to a near 20-year high against a basket of other currencies.
Oil prices were also knocked down by a soaring US dollar , which rose to a near 20-year high against a basket of other currencies.
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Updated 06 July 2022

Oil drops to 12-week low on recession worries

Oil drops to 12-week low on recession worries

NEW YORK: Oil prices dropped to a 12-week low in volatile trade on Wednesday, extending Tuesday’s heavy losses as growing fears of demand destruction from a global recession outweighed supply concerns.

Brent futures for September delivery fell $2.99, or 2.9 percent, to $99.78 a barrel by 10:57 a.m. EDT (1457 GMT), while US West Texas Intermediate crude fell $3.19, or 3.2 percent, to $96.31.

That puts WTI and Brent on track for their lowest closes since April 11, after Brent fell 9 percent and WTI fell 8 percent on Tuesday.

It also put both benchmarks in technically oversold territory with a relative strength index below 30 for a second day in a row. If Brent closes at that level, it would be the first time it remains in oversold territory for two days since December 2021.

Oil prices were also knocked down by a soaring US dollar , which rose to a near 20-year high against a basket of other currencies.

A stronger US dollar makes oil more expensive for holders of other currencies, which can curb demand.

In China, the world’s biggest oil importer, the market worried that new COVID-19 lockdowns could cut demand.

China’s crude oil imports from Russia, meanwhile, soared 55 percent from a year earlier to a record level in May. Russia displaced Saudi Arabia as the top supplier as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine.

Adding to downward pressure on oil prices, Equinor ASA said all oil and gas fields affected by a strike in Norway’s petroleum sector are expected to be back in full operation within a couple of days.


Dubai office market records strong rental growth in 7 years: Report

Dubai office market records strong rental growth in 7 years: Report
Updated 13 sec ago

Dubai office market records strong rental growth in 7 years: Report

Dubai office market records strong rental growth in 7 years: Report

DUBAI: Dubai’s office market has seen rental growth for the first time since 2016’s first quarter, according to CBRE’s UAE Real Estate Market Review Q2 2022 report.

Looking at the office sector figures in the second quarter, Dubai-based commercial Ejari contracts increased by 28.1 percent year-on-year, according to the report. 

Average Prime and Grade A rents in Abu Dhabi fell by 6.9 percent and 1.1 percent, whereas the Grade B segment of the market saw average rents increase by 4.5 percent.

The UAE’s real estate sector continued to record strong activity and performance in the first half of the year, it said. 

Prime, Grade A, Grade B, and Grade C rents increased by 7.0 percent, 7.2 percent, 3.9 percent, and 3 percent, respectively, in the second quarter. 

According to CBRE, the market will continue to outperform Prime and Grade A assets due to the limited availability of quality stock.

Residential sector 

There was an increase of 2.2 percent in property prices in Abu Dhabi in the 12 months to June 2022, with an increase of 2.1 percent for apartments and 2.2 percent for villas. 

In the year to June 2022, apartment rents in the capital increased by 0.6 percent, while villa rents declined by 2.3 percent. A total of 33.2 percent of sales transactions took place in this period, primarily on Reem Island, Yas Island, and Saadiyat Island. 

Dubai’s average property price increased by 10.1 percent in the year to June 2022.

There was an 8.7 percent increase in average apartment prices and a 19.3 percent increase in average villa prices during this period. In the year to June 2022, average apartment and villa rents increased by 21.2 percent and 24.7 percent, respectively, the highest growth rate since July 2014. 

Over this period, 39,269 transactions have been recorded, the highest total since 2009. Over the year to June 2022, total transaction volumes were up 54.5 percent, with off-plan and ready transactions up 72.3 percent and 43.3 percent, respectively.

Hospitality sector 

CBRE reported that the UAE’s key performance indicators continued to show significant improvement in 2022.

 As of June 2022, the average occupancy rate had increased by 10.3 percentage points year-over-year.

Revenue per available room across the UAE now stands 16.9 percent above 2019 levels on a year-to-date basis through June 2022.

The growth has primarily been driven by Fujairah, Dubai, and Sharjah, where RevPAR has grown by 26.7 percent, 20.6 percent, and 10.5 percent, respectively. 

The report said it predicted a steeper decline in performance than usual during the summer. Despite this, the project has not materialized as expected. 

According to the report, local and regional events are likely to boost performance for the remainder of the year.

Retail sector 

The number of retail visits in Abu Dhabi and Dubai exceeded their respective pre-pandemic baselines by 13 and 12.3 percent, respectively. 

A total of 6,540 new retail Ejari contracts were registered in Dubai in the second quarter of 2022, up 1.8 percent from the same period last year, and 10,193 contracts were renewed, up 16.1 percent.

Retail operators in Abu Dhabi are still hesitant to acquire new space due to COVID-19 regulations, and existing occupiers are content to maintain their existing footprints and lock in rents. 

The average retail rent in Abu Dhabi remained flat in the year to Q2 2022, while it increased by 22.0 percent in Dubai.


Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya

Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya
Updated 25 min 28 sec ago

Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya

Saudi Arabia to maintain gasoline price ceiling in medium-term, official tells Al-Arabiya

RIYADH: The Saudi government will continue to implement a ceiling on gasoline prices in the medium-term, the Kingdom’s deputy minister for macro-fiscal policy at the Ministry of Finance told Al-Arabiya. 

Thamer Al-Jared said the Kingdom’s objection to the International Monetary Fund’s proposal to raise the ceiling of gasoline prices comes in line with the government’s policy. 

He said with the current policy the government seeks to keep inflation under control. 

Global inflation exceeded 8 percent in many countries, while it is still at 2.3 percent in Saudi Arabia, which reflects the success of the Kingdom’s policies in this regard.


Arab economies expected to grow at a rate of 5.4% in 2022: AMF report

Arab economies expected to grow at a rate of 5.4% in 2022: AMF report
Updated 28 min 52 sec ago

Arab economies expected to grow at a rate of 5.4% in 2022: AMF report

Arab economies expected to grow at a rate of 5.4% in 2022: AMF report

RIYADH: Arab countries’ economies are likely to grow at an average annual rate of 5.4 percent in 2022 mainly driven by rising oil prices, a hike in crude production by oil exporters and the ongoing reforms to diversify economies, according to a report issued by the Arab Monetary Fund. 

The report titled “Arab Economic Outlook” noted that Arab countries could face relatively high inflation rates in 2022 due to local and global inflationary pressures. According to the report, Arab countries’ inflation rate is expected to reach 7.6 percent in 2022 and 7.1 percent in 2023.

It, however, predicted that the economic growth of Arab countries will slow to about 4 percent in 2023 due to a decline in the global economic growth, high commodity prices, and gradual exit from expansionary fiscal and monetary policies.

According to the report, Gulf Cooperation Council economies will grow 6.3 percent in 2022 compared to 3.1 percent in 2021, driven by recovery from pandemic, economic reforms and continued adoption of stimulus packages, while 2023 will see a decline to 3.7 percent in economic growth.

The economy of other oil-rich Arab countries will achieve 4.1 percent growth rate in 2022, compared to a 2.7 percent growth rate in 2021. The growth in these countries will slow down to 4.6 percent in 2023.


Saudi banks' import financing to private sector exceeds pre-pandemic levels to $10.6bn in Q2

Saudi banks' import financing to private sector exceeds pre-pandemic levels to $10.6bn in Q2
Updated 32 min 49 sec ago

Saudi banks' import financing to private sector exceeds pre-pandemic levels to $10.6bn in Q2

Saudi banks' import financing to private sector exceeds pre-pandemic levels to $10.6bn in Q2

CAIRO: Saudi Arabia’s private sector import financing surpassed pre-pandemic levels totaling SR39.6 billion ($10.6 billion) in the second quarter of 2022 year-on-year, according to data released by the Saudi Central Bank, also known as SAMA.

Private sector imports financed through settled letters of credit and bills received increased by SR5 billion in the second quarter of 2022 year-on-year, surpassing the pre-pandemic aggregate of SR34.8 billion.

During the COVID-19 pandemic, import financing dropped to SR30 billion in the second quarter of 2020, the data showed.

It then recovered to SR34.6 billion in the second quarter of 2021 as the global economy started to rebound. In 2022, import financing hit its highest level since the third quarter of 2016.

Financing to import building materials, machinery, and textiles and clothing saw an increase of SR815 million, SR551 million, and SR38 million respectively in the second quarter of this year compared to the same period a year ago.

HIGHLIGHTS

Private sector imports financed through settled letters of credit and bills received increased by SR5 billion in the second quarter of 2022 year-on-year.

Financing to import building materials, machinery, and textiles and clothing saw an increase of SR815 million, SR551 million, and SR38 million respectively.

The main driver of positive change in the value of the private sector’s imports financed through settled LCs and bills received was the 'other goods.'

Food grains, and fruits and vegetables both increased by SR451 million and SR65 million year on year in the second quarter respectively.

The three sectors accounted for 10 percent, 3.7 percent and 0.5 percent respectively of the total import financing.

The main driver of positive change in the value of the private sector’s imports financed through settled LCs and bills received was the “other goods.” This category totaled half of the total financing and increased by SR4.3 billion year on year this quarter.

Nevertheless, LC and bill financings for the Saudi importers of foodstuffs declined by SR214 million in the second quarter compared to the same period of 2021, showed the data.

Foodstuff, which made up 12.7 percent of the total financing for the private sector’s imports, had categories that both grew and shrunk in the past year.

Food grains, and fruits and vegetables both increased by SR451 million and SR65 million year on year in the second quarter respectively.

Sugar, tea and coffee, livestock and meat and other foods all saw a yearly decline in imports financed through settled LCs and bills by Saudi commercial banks. Sugar, tea and coffee made up 0.4 percent of the total financing, and fell by SR147 million in this quarter compared to the same quarter in 2021.

Livestock and meat made up 0.82 percent of the total, and witnessed a year-on-year decline  by SR212 million in the second quarter of 2022. Whereas other foodstuffs made up 6.5 percent of the total, and dropped by SR371 million in the second quarter of 2022 compared to the same period in 2021, showed the data.

Apart from the fall in value of agricultural imports financed through LCs and bills, the financing for motor vehicle imports also fell by SR265 million, and appliances also fell by SR144 million year on year in the second quarter. 

Looking at suppliers’ geography, the Gulf Cooperation Council contributed 40 percent of imports financed through LCs settled at Saudi banks (excluding bills), totaling SR10.1 billion in the second quarter of 2022.

A report published by the International Trade Administration stated: “Saudi Arabia has signed various trade agreements (especially with the GCC) that allow member countries total exemption from customs duties.”

Asian countries other than China, Japan and South Korea came in second with 22.9 percent of settled LCs which recorded SR5.7 billion in the second quarter.

Western Europe, China and South Korea followed with 10.2 percent, 8.4 percent, and 7.1 percent.

 


Saudi and Uzbek companies sign pacts on various investment opportunities

Saudi and Uzbek companies sign pacts on various investment opportunities
Updated 18 August 2022

Saudi and Uzbek companies sign pacts on various investment opportunities

Saudi and Uzbek companies sign pacts on various investment opportunities

RIYADH: Private sector companies in Saudi Arabia and their Uzbek counterparts have signed 14 agreements and memoranda of understanding covering various investment opportunities.
The signing of the pacts, covering sectors including air transport services, livestock, education, energy and technology, was witnessed by Khalid bin Abdulaziz Al-Falih, the Saudi minister of investment, and his Uzbeki counterpart Jamshid Khodjaev, state news agency SPA reported.
Uzbek President Shavkat Mirziyoyev arrived in Jeddah earlier this week and was received by Crown Prince Mohammed bin Salman prior to their meeting which tackled bilateral relations and cooperation in various fields.
The two countries also signed $12 billion worth of deals, including a wind project in Uzbekistan by ACWA Power.