Oil set for weekly gain despite price dip on demand concerns

Update Oil set for weekly gain despite price dip on demand concerns
OPEC has cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day (Shutterstock)
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Updated 12 August 2022

Oil set for weekly gain despite price dip on demand concerns

Oil set for weekly gain despite price dip on demand concerns

LONDON: Oil prices fell on Friday, held down by recession fears clouding the demand outlook, but remained on track for a weekly gain.

Brent crude futures were down $1.33, or 1.3 percent, at $98.27 a barrel by 1225 GMT while US West Texas Intermediate crude fell $1.51, or 1.6 percent, to $92.83.

Brent was on track for close to a 4 percent gain this week after last week’s 14 percent tumble on fears that rising inflation and interest rates will hit economic growth and demand for fuel.

The market was absorbing contrasting demand views from the Organization of the Petroleum Exporting Countries and the International Energy Agency.

“We are seeing an economic slowdown, but its unclear if it’s as big a slowdown as some of the recent outlooks have been predicting,” said Ole Hansen, head of commodity strategy at Saxo Bank. “The demand will ebb and flow, but supply is still the main concern.”

European sanctions on Russian oil are due to tighten later this year while a six-month coordinated energy release agreed by the United States and other developed economies is due to run its course by the end of the year.

On Thursday OPEC cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day. It now expects demand to rise by 3.1 million bpd this year.

The IEA, meanwhile, raised its demand growth forecast to 2.1 million bpd, citing gas-to-oil switching in power generation.

“There’s a great deal of uncertainty about demand in the short run. Until that settles, it (the market) will be like this for a while,” said Justin Smirk, a senior economist at Australian bank Westpac.

The IEA also raised its outlook for Russian oil supply by 500,000 bpd for the second half of 2022 but said OPEC would struggle to boost production.

“The oil market has bounced back this week, with Brent once more flirting with triple figures,” said Craig Erlam, senior market analyst at Oanda in London.

“All things considered, the price moves highlight just how tight the market remains and how sensitive it still is to spikes.” 


Saudi-based SaaS startup raises $1.3m in seed funding

Saudi-based SaaS startup raises $1.3m in seed funding
Updated 13 sec ago

Saudi-based SaaS startup raises $1.3m in seed funding

Saudi-based SaaS startup raises $1.3m in seed funding

RIYADH: Saudi-based SaaS startup Glamera raised $1.3 million in a seed funding round led by venture capital firm Riyadh Angels Investors.

Established in Egypt in 2020, Glamera relocated to Saudi Arabia where it covers Riyadh, Jeddah, Dammam, Taif, Qassim, Madinah, Tabuk as well as Cairo and Alexandria in Egypt.

The company is an all-in-one platform for beauty and lifestyle service providers where consumers can find and book sessions.

Since its establishment, the platform has managed to achieve huge growth in the region as it facilitated a gross merchandise value of $45 million in addition to continued growth in revenue and client acquisition.

“Now we can confidently work toward leading the market with our fully integrated solutions and play a part in the Saudi Digital Transformation Vision 2030. We aim to work with over 2,500 clients and achieve $500 million GMV by the end of 2023,” Mohamed Hassan, founder and CEO, said in a statement.

Omar Fathy, co-founder and chief technical officer of the startup, said that the company will use its funding to develop and launch new services as well as expand into Gulf markets.


UAE’s Ajman Bank signs deal to implement payment solutions

UAE’s Ajman Bank signs deal to implement payment solutions
Updated 5 min 13 sec ago

UAE’s Ajman Bank signs deal to implement payment solutions

UAE’s Ajman Bank signs deal to implement payment solutions

RIYADH: Ajman Bank, one of the leading Shariah-compliant banks in the UAE, has signed an agreement with VaultsPay, a fintech company, to provide digital financial solutions for businesses and individuals.

The partnership will expand the bank’s payment capabilities by introducing digital access to financial services for its clients in the UAE.

“Our goal is to develop a robust electronic payment ecosystem driven by data and insights to increase the safety and security of electronic payments,” Ajman Bank CEO Mohamed Amiri said in a statement. Founded in 2020, VaultsPay is a UAE-based payment gateway platform.


Brent to reach $100 a barrel quicker than previous estimation: Morgan Stanley

Brent to reach $100 a barrel quicker than previous estimation: Morgan Stanley
Updated 6 min 50 sec ago

Brent to reach $100 a barrel quicker than previous estimation: Morgan Stanley

Brent to reach $100 a barrel quicker than previous estimation: Morgan Stanley

RIYADH: Brent crude could reach $100 per barrel, much quicker than the previous estimation, as the Organization of the Petroleum Exporting Countries, and its allies, known as OPEC+, agree to cut oil output by 2 million barrels from November, according to Morgan Stanley analysts.

According to a Bloomberg report, analysts including Martijn Rats noted that the reduction of output will tighten the market, and added that the prices will be also dependent on the EU’s decision on Russian energy exports.

Morgan Stanley also increased its Brent price forecast by $5 to $100 a barrel for the first three months of 2023.

Echoing similar views, Damien Courvalin, head of energy research at Goldman Sachs told Bloomberg TV that energy prices will surely increase by the end of this year.

“All the developments we have seen on the supply side at this point very much sets the stage for what we believe will be higher prices into the end of this year,” said Courvalin.

Goldman Sachs also increased its fourth-quarter estimate for Brent crude by $10 to $110 per barrel.

UBS Group AG said that the current output cuts, along with the European ban on Russian crude imports will squeeze the market in the coming months.

On the other hand, Citigroup Inc. noted that this output ban will be mostly on paper, as the effective cut will be much smaller as OPEC+ is already failing to fulfill their quotas.

Citigroup also warned that the move to reduce output could backfire on OPEC+ if it hits economic activity and oil demand further.


MENA region economy expected to grow 5.5% in 2022 — fastest in six years: World Bank

MENA region economy expected to grow 5.5% in 2022 — fastest in six years: World Bank
Updated 45 min ago

MENA region economy expected to grow 5.5% in 2022 — fastest in six years: World Bank

MENA region economy expected to grow 5.5% in 2022 — fastest in six years: World Bank

CAIRO: The Middle East and North African region’s economy is set to grow 5.5 percent this year, in what would be its fastest rate since 2016, according to a World Bank report.

However, the same area is forecast to see growth fall to 3.5 percent in 2023.

As oil prices rise, the Gulf Cooperation Council countries are expected to witness a growth of 6.9 percent in 2022, which will then steady to 3.7 percent in the following year with the subsiding hydrocarbon prices.

The report identified Saudi Arabia as the primary driver of GCC growth, with a forecast 8.3 percent growth rate in 2022.

Non-oil sectors in the GCC region are also expected to witness growth to varying extents in the coming year — from 2.6 percent in Oman to 7.7 percent in Kuwait.

Among developing oil exporters, economists anticipated a moderate growth of 4.1 percent this year, with Iraq leading the pack at a growth rate of 8.2 percent.

However, Iraq’s non-oil gross domestic product growth between 2022 and 2024 is set to be less than 3 percent due to political instability and water and electricity shortages.

Algeria’s GDP growth is forecast to reach 3.7 percent by the end of this year, aided by European efforts to diversify energy sources. In comparison, Iran’s expected growth was recorded at 2.9 percent, limited by global economic sanctions.

World Bank economists averaged the developing oil exporters’ growth at 2.7 percent in 2023 as the hydrocarbon high subsides.

The report further said that developing oil importers are projected to grow by 4.5 percent in 2022, led by Egypt’s 6.6 percent growth by the end of its fiscal year in June.

Despite the country’s progress in tourism, telecom and gas exports, Egypt’s GDP is expected to drop significantly to 4.8 percent in 2023.

Jordan’s GDP growth should fall slightly to 2.1 percent in 2022 and up to 2.3 percent the following year, also supported by tourism, according to the report.

Apart from Egypt and Lebanon, the oil exporting countries are said to grow by only 0.7 percent this year and then slightly up to 2.5 percent in 2023.

The report pointed out that six of the 18 MENA countries will have recovered from pre-pandemic GDP growth levels in 2022, and three additional countries will catch up the following year.

The current account of the MENA region is expected to advance notably in 2022 to reach 10.5 percent of GDP compared to only 4.5 percent the year before.

The region’s fiscal balance is said to reach 1.9 percent of GDP, up from a deficit of 3.5 percent in 2021, stated the World Bank report.

Gulf countries’ current account alone is projected to reach 17.2 percent in 2022 and 14.6 percent the following year, while their fiscal balance will touch 5.3 percent in 2022, up from a deficit of 2.2 percent the year before.


MENA Project Tracker — Qatar to inaugurate 800MW solar farm

MENA Project Tracker — Qatar to inaugurate 800MW solar farm
Updated 06 October 2022

MENA Project Tracker — Qatar to inaugurate 800MW solar farm

MENA Project Tracker — Qatar to inaugurate 800MW solar farm

RIYADH: Qatar is preparing to inaugurate its 800 megawatt solar photovoltaic power plant in Al-Kharsaah in mid-October, according to MEED.

Saad Sherida Al-Kaabi, QatarEnergy’s president and CEO, and the country’s minister of state for energy affairs, said at the Energy Intelligence Forum in London that it is fully ready and operational, MEED added.

He added: “This week we are fully done with the project. I visited it last week. The emir will be inaugurating it in mid-October.”

According to Al-Kaabi, it is one of the world’s largest individual solar plants.

He said: “That power plant, in a gas country known for being the biggest gas producer, will be supplying about 10 percent of our power for the national grid, which is quite substantial for a gas producer.”

Qatar’s solar power goal is to reach 5GW by 2035, Al-Kaabi said.

Qatar to sign three gas project deals

QatarEnergy, Qatar’s state-owned energy company, is about to sign project deals with three partners to further develop the North Field, MEED reported Al-Kaabi as saying.

“We see three partners entering this project,” he said.

The North Field is the largest natural gas field globally, MEED said.

“We are done with almost everything. We are just defining the date when my counterpart can come to Qatar to celebrate,” Al-Kaabi added.