Oil edges off low as strong export demand drains US crude stocks

Update Brent crude rose 72 cents, or 0.7 percent, to $92.96 per barrel by 1108 a.m. ET (1508 GMT), after spiking more than $2 immediately after EIA data was released.
Brent crude rose 72 cents, or 0.7 percent, to $92.96 per barrel by 1108 a.m. ET (1508 GMT), after spiking more than $2 immediately after EIA data was released.
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Updated 17 August 2022

Oil edges off low as strong export demand drains US crude stocks

Oil edges off low as strong export demand drains US crude stocks

HOUSTON: Oil edged 1 percent higher after earlier hitting a six-month low on Wednesday, as a steeper-than-expected draw down in US crude stocks outweighed concerns over rising output, Russian exports and recession fears.

US crude stocks fell by 7.1 million barrels in the week to Aug. 12 to 425 million barrels, Energy Information Administration data showed, compared with analysts’ forecasts for a 275,000-barrel drop in a Reuters poll.

Brent crude rose $1.09, or 1.1 percent, to $93.45 per barrel by 12:23 p.m. ET (1723 GMT). Earlier in the day, recession worries had pushed the benchmark price to its lowest since February at $91.51. US West Texas Intermediate crude rose $1.39, or 1.6 percent, to $87.92 per barrel.

US crude exports hit 5 million barrels per day, the highest on record, according to EIA data, as WTI has traded at steep discount to Brent, making purchases of US crude ore attractive to foreign buyers. In a sign of strong demand, gasoline stocks also drew 4.6 million barrels, much higher than the expected 1.1 million barrel draw.

“It was expected to be a friendly report and it was pretty much across the board. Some of those demand destruction concerns that the market was going through seem to be alleviated a little bit,” said Phil Flynn, an analyst at Price Futures group.

The American Petroleum Institute on Tuesday had flagged a 448,000 barrel draw in crude stocks and 4.5 million barrels in gasoline inventories, according to sources.

Oil has soared in 2022, coming close to an all-time high of $147 in March after Russia's invasion of Ukraine exacerbated supply concerns.

However, Russia has started to gradually increase its oil production after sanctions-related curbs and as Asian buyers have increased purchases, leading Moscow to increase its forecasts for output and exports until the end of 2025, an economy ministry document seen by Reuters showed.

Russia’s earning from exports

Russia’s earnings from energy exports are expected to rise 38 percent this year partly due to higher oil export volumes, according to the document, in a sign that supply from the country has not been impacted as much as markets originally expected.

The prospect of recession has also more recently weighed on oil prices. 

Political developments

On the oil supply front, the market is awaiting developments from talks to revive Iran’s 2015 nuclear deal with world powers, which could eventually lead to a boost in Iranian oil exports if a deal is reached.

The EU and US said on Tuesday they were studying Iran’s response to what the EU has called its “final” proposal to save the deal.

Analysts at Goldman Sachs said a return of Iranian crude supply would reduce their 2023 forecast by $5-10 per barrel from $125 per barrel.


Global hospitality brand voco becomes first Riyadh hotel to offer EV charging station

Global hospitality brand voco becomes first Riyadh hotel to offer EV charging station
Updated 18 sec ago

Global hospitality brand voco becomes first Riyadh hotel to offer EV charging station

Global hospitality brand voco becomes first Riyadh hotel to offer EV charging station

RIYADH: International hospitality brand voco claims to have become the first hotel to offer an electric vehicle charging station in Saudi Arabia’s capital.

voco Riyadh, which is owned and operated by the InterContinental Hotels Group, said in a press release that it has launched the charging station as part of its series of new initiatives to protect and preserve the environment.

The press release noted that the installation of this new charging station is in line with the Saudi government’s direction toward supporting and developing the electric car industry.

“voco aims to be the leading destination for sustainable tourism in the Kingdom, in line with Vision 2030 goals, which have placed sustainability among its most important pillars, as the Kingdom aims to reach zero-carbon neutrality by 2060,” said Mark Allaf, regional general manager of IHG and general manager of voco Riyadh.

He added: “voco’s care for the environment is seen in practices such as serving guests drinks and coffee in biodegradable glasses and cups or providing them with the opportunity to refresh and bathe under energy-efficient ventilated shower heads.”

Earlier in May, the Saudi Ministry of Investment announced an investment of more than SR12.3 billion ($3.27 billion) to build a Lucid Motors electric vehicle factory in Saudi Arabia, with an annual production capacity of 155,000 cars.

With the launch of an EV charging station, voco said it looks to affirm its commitment to being an eco-friendly hotel that implements environmental sustainability practices, uses energy-saving heating, cooling, and lighting systems, and rationalizes water usage. 

“The overall aim is to improve human well-being and maintain the continuity of life by protecting natural resources, such as the atmosphere and soil,” it said in the press release..

In August, the Saudi Ministry of Energy, in cooperation with other governmental agencies, completed all legislative and technical aspects to regulate the electric vehicle charging market.

The regulating team which comprises the Ministry of Municipal and Rural Affairs, the Ministry of Transport and Logistics, the Ministry of Commerce, the Saudi Electricity Co., and the King Abdullah Petroleum Studies and Research Center, will monitor and follow up on the activity to ensure that investors comply with the infrastructure requirements for EV charging stations.

In June, Kalyana Sivagnanam, group CEO of Petromin, during an exclusive interview with Arab News, said that its electric charging station arm Electromin is planning to open new charging stations, in addition to the existing 100 to end Saudis’ reluctance to EVs.

 

 


Saudi Arabia issues 115 permits for new industrial units with $1bn investments: Data

Saudi Arabia issues 115 permits for new industrial units with $1bn investments: Data
Updated 1 min ago

Saudi Arabia issues 115 permits for new industrial units with $1bn investments: Data

Saudi Arabia issues 115 permits for new industrial units with $1bn investments: Data

RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources issued 115 industrial licenses with investments worth SR4 billion ($1.06 billion) in August 2022, official data showed. 

The data from the ministry revealed that the number of industrial units across the Kingdom reached 10,707, up from 10,685 in July 2022.

In August 2021, the number of industrial facilities across Saudi Arabia was 10,159.

According to the data, 68 factories became operational in August 2022, with an investment volume of SR2.3 billion.

Forty-one licenses were issued to industrial units in the Riyadh region followed by 26 in the Eastern Province and 22 in the Makkah region.

In the Madinah region, eight new factory licenses were issued in August, and it was followed by the Qassim region with seven, four in Asir,  three each in Tabuk and Hail regions and one license for a factory in the Jazan region.


War in Ukraine drags on global economy into 2023, OECD says

War in Ukraine drags on global economy into 2023, OECD says
Updated 2 min 19 sec ago

War in Ukraine drags on global economy into 2023, OECD says

War in Ukraine drags on global economy into 2023, OECD says

PARIS: Russia’s war in Ukraine and the lingering effects of the COVID-19 pandemic are dragging down global economic growth more than expected and driving up inflation that will stay high into next year, the Organization for Economic Cooperation and Development said Monday in a darkening outlook, according to AP.

The Paris-based organization projects worldwide growth to be a modest 3 percent this year before slowing further to just 2.2 percent next year, representing around $2.8 trillion in lost global output in 2023.

The war in Ukraine has driven up food and energy prices worldwide, with Russia a key global energy and fertilizer supplier and both countries major exporters of grain for millions of people worldwide already facing hunger.

Meanwhile, China’s COVID-19 lockdowns have shuttered large parts of its economy.

“The war, the burden of high energy and food prices, as well as zero COVID-19 policies from China, mean that growth will be lower, and inflation will be higher and more persistent,” OECD Secretary-General Mathias Cormann told reporters in Paris.

The inflation and energy supply shock led the OECD to project annual economic growth to slow to around 1.5 percent in the United States this year and just 0.5 percent next year.

The group expects the economy to grow 1.25 percent this year in the 19 countries using the euro currency, with risks of deeper declines in several European economies during the winter months, and 0.3 percent in 2023.

It noted the specter of energy shortages in Europe after Russia reduced supplies of natural gas needed to heat homes, generate electricity and power factories. Shortages could send energy prices up worldwide and force businesses to ration, pushing many European countries into a recession next year, the OECD said.

Growth in China is expected to drop to 3.2 percent this year. Except in 2020 when the pandemic emerged, it would be the lowest growth rate in China since the 1970s. The group projected it would rise slightly to 4.7 percent next year.

Inflation is expected to drop gradually through next year in most Group of 20 countries as central banks keep raising interest rates and global growth slows. Headline inflation is projected to ease from 8.2 percent this year to 6.6 percent in 2023 in the G-20 economies, but that’s still far above many central banks’ targets of 2 percent.

“These challenging economic situations will require bold, well-designed and well-coordinated policies,” Cormann said.

The OECD called for short-term help for people hurt the most by rising prices, further interest rate hikes by central banks, climate policies that follow countries’ search for alternate energy sources and international cooperation to strengthen food supplies.


TASI drops below 11k for the first time in over 9 months as the market trembles: Closing bell

TASI drops below 11k for the first time in over 9 months as the market trembles: Closing bell
Updated 27 min 43 sec ago

TASI drops below 11k for the first time in over 9 months as the market trembles: Closing bell

TASI drops below 11k for the first time in over 9 months as the market trembles: Closing bell

RIYADH: Saudi Arabia’s main index dropped below 11,000 points for the first time in nearly nine months thanks to falling oil prices and global recession fears.

The Tadawul All Share Index dipped 2.26 percent at the end of Monday’s trade, reaching 10,909 for the first time since Dec. 12, while the parallel market Nomu shed 0.84 percent to 19,708.

“The markets are likely to continue to be volatile and in jittery mode until inflation is under control.” Fawaz Al-Fawaz, a Saudi-based independent economist and columnist told Arab News.

Oil prices sank to sub-$85 for the first time since January, hot on the heels of aggressive interest rate rises across the world, including by the US Federal Reserve and the Saudi Central Bank.

The market fall was led by a 2.85 percent decline in oil behemoth Saudi Aramco and a 3.92 percent drop in the Kingdom's most valued bank Al Rajhi.

Riyad Bank slid 6.74 percent to lead the fallers, closely followed by Saudi petrochemicals maker Sipchem which was down 6.51 percent.

The Saudi National Bank, the Kingdom’s largest lender, decreased by 1.45 percent, while Saudi British Bank declined by 1.73 percent.

National Agricultural Development Co. shed 1.76 percent, following signing a non-binding memorandum of understanding with the Leha Agricultural Co. to produce potato seeds in Saudi Arabia.

Retal Urban Development Co. gained 3.39 percent, after selling its share in a land located in Al Khobar city for SR67 million ($18 million) to Maali Holding Co.

Anaam International Holding Group gained 5.6 percent to continue leading the gainers since early trade, after reporting that it turned into profits of SR1.6 million during the first half of 2022.

Saudi economist Ali Alhazmi told Arab News that the market direction is unpredictable, but he anticipated the decline to continue this week.

“The decline is from the uncertainty about the global economics, or also the decline of growth and the existence of recession in major economies, especially the US and the EU.”

“We cannot avoid the continued closure in China, which affects supply chains. We also have the ongoing war between Russia and Ukraine.”


Serco opens hub in Riyadh to elevate regional trade

Serco opens hub in Riyadh to elevate regional trade
Updated 26 September 2022

Serco opens hub in Riyadh to elevate regional trade

Serco opens hub in Riyadh to elevate regional trade

RIYADH: British public services firm Serco has opened its new headquarters in Riyadh as the company aims to develop its Saudi-based resources and leverage the location as a driver for local and regional trade.

According to a press release, the new office opened on Sept. 24, a day after Saudi Arabia’s National Day. 

The press release noted that Serco has already formed a specialized team with 15 percent Saudi-national representation, to deliver high-profile contracts with EXPRO and Royal Commission of AlUla. 

The company is also eyeing opportunities in the Kingdom’s smart cities and giga-projects, and these projects will be led by Serco’s Saudi national female country director, Mona Al-Thagafi.

“The opening of this new office, just after National Day on Friday, represents a key milestone for Serco as we fully embrace Saudization. We are already providing rewarding careers for young, local talent and creating many exciting opportunities in the future, for both men and women,” said Al-Thagafi. 

She added that Serco is offering candidates a chance to develop their skills through developmental, graduate and internship programs. 

The press release further added that the new office in Riyadh will also feature an ‘ExperienceLab,’ Serco's user-centered research and design agency, which the company says is “centered around people and innovation.” 

Speaking to Arab News in April 2021, Phil Malem, CEO of Serco for the Middle East region, opened up about the company’s aspirations in the Kingdom. “We are hugely enthusiastic about the potential of the Kingdom and we have tried to grow in line with Saudi Vision 2030. We are passionate about the Saudization program. It’s a key part of our strategy. We have continued to recruit, train and develop skills in Saudi nationals who can make a difference in the organization,” said Malem. 

He also added that Serco is closely following the development of Saudi giga projects including NEOM and The Red Sea Development Co. “We are actively in discussion around the potential of helping,” he said.