Oil prices climb as supply shortage concerns outweigh demand worries

Oil prices climb as supply shortage concerns outweigh demand worries
Brent crude rose 55 cents, or 0.6 percent, to $94.67 a barrel by 0630 GMT (Shutterstock)
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Updated 05 August 2022

Oil prices climb as supply shortage concerns outweigh demand worries

Oil prices climb as supply shortage concerns outweigh demand worries

SINGAPORE: Oil prices rose on Friday, bouncing off their lowest levels since February in the previous session, as supply shortage concerns were enough to cancel out fears of slackening fuel demand, according to Reuters.

Brent crude rose 55 cents, or 0.6 percent, to $94.67 a barrel by 0630 GMT, while US West Texas Intermediate crude was up 65 cents, or 0.8 percent, at $89.19 a barrel.

Oil prices have come under pressure this week as the market fretted over the impact of inflation on economic growth and demand, but signs of tight supply kept a floor under prices.

“OPEC’s meagre supply hike highlights the limited capacity the market has to handle further shortages,” ANZ Research analysts said.

For September, The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, is set to raise its oil output goal by 100,000 barrels per day. The hike is one of the smallest since OPEC quotas were introduced in 1982, OPEC data shows.

The global crude oil markets remained firmly in backwardation, where prompt prices are higher than those in future months, indicating tight supplies.

Supply concerns are expected to ratchet up closer to winter with the EU sanctions banning seaborne imports of Russian crude and oil products set to take effect on Dec. 5.

“With the EU halting seaborne Russian imports, there is a key question of whether Middle Eastern producers will reroute their barrels to Europe to backfill the void,” RBC analyst Michael Tran said.

“How this Russian oil sanctions policy shakes out will be one of the most consequential matters to watch for the remainder of the year,” Tran added.

For now, signs of an economic slowdown capped price recovery. Recession worries have intensified following the Bank of England’s warning of a drawn-out downturn after it raised interest rates by the most since 1995.

“If commodities are not pricing in an imminent economic recession, they might be preparing for a ‘stagflation’ era when the unemployment rate starts picking up and inflation stays high,” CMC Markets analyst Tina Teng said.

Investors are focused on the US employment report to be released later in the day, which is expected to show nonfarm payrolls increased by 250,000 jobs last month, after rising by 372,000 jobs in June.

Any signs of strength in the labor market could feed into fears of aggressive steps by the US Federal Reserve to curb inflation.


Oil dips as slowdown worries limit price gains

Oil dips as slowdown worries limit price gains
(Shutterstock)
Updated 19 August 2022

Oil dips as slowdown worries limit price gains

Oil dips as slowdown worries limit price gains
  • US crude stocks fall by 7.1 mln bbl, far more than expected
  • US oil refiners aim to run full-bore, spurning recession fears
  • OPEC chief says blame policymakers, lawmakers for price rises (Recasts, updates prices)

SINGAPORE: Oil prices dipped on Friday after two days of gain, as market participants weighed worries about global economic slowdown — that could dampen fuel demand — against expectations of tighter supplies toward year-end.

Brent crude futures fell 36 cents, or 0.4 percent, to $96.23 a barrel by 0309 GMT after settling 3.1 percent higher on Thursday. US West Texas Intermediate crude was at $90.29 a barrel, down 21 cents, or 0.2 percent, following a 2.7 percent increase in the previous session.

Still, the benchmark contracts were headed for weekly losses of about 1.5 percent.

While bullish US weekly data bolstered optimism for improved fuel demand for the near-term, lingering recession fears and a possible increase in output by OPEC+ will likely limit oil price’s upside, said Satoru Yoshida, a commodity analyst with Rakuten Securities.

US crude inventories fell sharply as the nation exported a record 5 million barrels of oil a day in the most recent week, with oil companies finding heavy demand from European nations looking to replace crude from warring Russia.

Keeping crude supplies snug, US oil refineries plan to keep running near full throttle this quarter, according to executives and estimates, as refiners set aside worries about recession and sliding retail prices to deliver more fuel.

The rise in US fuel production could partly offset lower oil products exports from China this year as Beijing prioritizes the local market to curb domestic fuel inflation.

On supplies, Haitham Al Ghais, new secretary general of the Organization of the Petroleum Exporting Countries, told Reuters that policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not his group.

The group together with allies such as Russia, known as OPEC+, are due to meet on Sept. 5 to adjust production. OPEC is keen to ensure Russia remains part of the OPEC+ oil production deal after 2022, Al Ghais said.

In a sign of improving supplies, the price gap between prompt and second-month Brent futures narrowed about $5 a barrel from the end of July.

Record US crude exports, the resumption of Libya’s production and sustained exports from Russia and Iran have eased global supply tightness ahead of peak refinery maintenance.

Russia 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.

Iran, meanwhile, increased its oil exports in June and July and could raise them further this month by offering a deeper discount to Russian crude for its main buyer China, firms tracking the flows said. 


UK’s Liz Truss says defining mission will be reviving the economy

UK’s Liz Truss says defining mission will be reviving the economy
Updated 19 August 2022

UK’s Liz Truss says defining mission will be reviving the economy

UK’s Liz Truss says defining mission will be reviving the economy

LONDON: The frontrunner to be Britain’s next prime minister Liz Truss said her government’s defining mission would be to revive the economy as she set out a series of measures to help parts of northern England.
Britain’s economic performance has lagged behind those of the United States, Italy and France in recovering from the COVID-19 pandemic. The economy is expected to enter a long downturn at the end of the year amid surging inflation and rising interest rates.
“The defining mission of my government will be to get our economy growing again, cutting taxes to put more money into the pockets of hardworking people,” Truss said.
Outgoing Prime Minister Boris Johnson had said reducing regional economic inequality was his main goal. But public spending in the north of England fell behind the national average in the first two years of his government, research by the Institute for Public Policy Research has shown.
Truss said she was committed to the current government’s goal of reducing economic inequalities but would do so in a “Conservative way,” interpreted as meaning a focus on tax cuts and deregulation.
Speaking ahead of election hustings in Manchester in northern England on Friday, Truss pledged to provide more devolution, to ensure poorer areas receive the government funding they need, and to build two new vocational colleges in the north of England that will be “the vocational equivalent of Oxford and Cambridge,” dubbed “Voxbridge.”
Truss has portrayed herself as a radical insurgent who would overturn the current failed orthodoxy and has proposed to reverse more than £30 billion ($36 billion) of tax rises.


UAE-based tech firm launches $10bn fund in partnership with Abu Dhabi Growth Fund

UAE-based tech firm launches $10bn fund in partnership with Abu Dhabi Growth Fund
Updated 18 August 2022

UAE-based tech firm launches $10bn fund in partnership with Abu Dhabi Growth Fund

UAE-based tech firm launches $10bn fund in partnership with Abu Dhabi Growth Fund

RIYADH: G42, a UAE-based technology company, launched a $10 billion G42 Expansion Fund in partnership with the Abu Dhabi Growth Fund to invest in late-stage companies.

Managed by a G42 subsidiary, the fund will focus on growth companies in computing, communication technology, intelligent mobility, clean tech, digital infrastructure, fintech, healthcare, and life sciences, Wamda reported.

“With the G42 Expansion Fund, we aim to accelerate our global impact not only through the deployment of capital, but also by providing unique access to our networks, management, and operational assets to our portfolio companies,” Peng Xiao, group CEO at G42 and chairman of the G42 Expansion Fund’s Investment Committee, said in a statement.

 


Saudi-based fintech partners with SNB to support SMEs 


Saudi-based fintech partners with SNB to support SMEs 

Updated 18 August 2022

Saudi-based fintech partners with SNB to support SMEs 


Saudi-based fintech partners with SNB to support SMEs 


RIYADH: CASHIN, a Saudi-based fintech and point-of-sale provider, signed a partnership with the Saudi National Bank to support small and medium enterprises.

The partnership will facilitate management of transactions for business activities like receiving payments and sales with immediate bank settlements.

“We are proud to be an active element in the national transformation journey within the financial sector by providing innovative products in the field of fintech and information systems,” CASHIN CEO Omar Al-Ramah said in a statement.

Founded in 2021, CASHIN is providing its services to over 10,000 businesses in more than 30 sectors with transactions at around $800 million, MAGNiTT reported.


Global tech event LEAP22 receives 5 Gold Awards for its inaugural edition


Global tech event LEAP22 receives 5 Gold Awards for its inaugural edition

Updated 18 August 2022

Global tech event LEAP22 receives 5 Gold Awards for its inaugural edition


Global tech event LEAP22 receives 5 Gold Awards for its inaugural edition


RIYADH: The inaugural LEAP22 International Technology Conference won five Gold Awards at the 19th Annual International Business Awards, according to a statement. 

Competing with over 3,700 nominations from organizations across 67 countries, LEAP clinched the best award for Tech Event, B2B Event, Launch Event, Conference Event, and Exhibition Experience.

In its first edition held in early February 2022 for three days, under the theme “An Eye on the Future,” over 509 speakers speakers participated in the event with over 100,000 conference’s visits.

It also announced investments worth $6.4 billion, in the presence of more than 700 international companies, over 1,500 startups, and 330 investment funds.

The Annual International Business Awards, also known as Stevie Awards, were created in 2002 to honor and generate public recognition of the achievements and positive contributions of organizations and working professionals.

LEAP Conference was organized by Saudi Arabia’s Ministry of Communications and Information Technology, in cooperation with the Saudi Federation of Cybersecurity, Programming, and Drones.