Oil prices amid supply concerns heading into winter

Brent crude futures rose $1.51, or 1.6 percent, to $94.35 a barrel by 12:42 p.m. EDT (1642 GMT). US West Texas Intermediate crude was up $1.28, or 1.5 percent, at $88.07.
Brent crude futures rose $1.51, or 1.6 percent, to $94.35 a barrel by 12:42 p.m. EDT (1642 GMT). US West Texas Intermediate crude was up $1.28, or 1.5 percent, at $88.07.
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Updated 12 September 2022

Oil prices amid supply concerns heading into winter

Oil prices amid supply concerns heading into winter

NEW YORK: Oil prices rose on Monday, shaking off weaker demand expectations as supply concerns mount heading into the winter.

Brent crude futures rose $1.51, or 1.6 percent, to $94.35 a barrel by 12:42 p.m. EDT (1642 GMT). US West Texas Intermediate crude was up $1.28, or 1.5 percent, at $88.07.

US emergency oil stocks fell 8.4 million barrels to 434.1 million barrels in the week ended Sept. 9, its lowest since October 1984, according to data released on Monday by the US Department of Energy.

US President Joe Biden in March set a plan to release 1 million barrels per day over six months from the Strategic Petroleum Reserve to tackle high US fuel prices, which have contributed to soaring inflation.

The Biden administration is weighing the need for further SPR releases after the current program ends in October, Energy Secretary Jennifer Granholm told Reuters last week.

Global oil supply is expected to tighten further when a European Union embargo on Russian oil takes effect on Dec. 5.

The G7 will implement a price cap on Russian oil to limit the country’s oil export revenue, seeking to punish Moscow over the invasion of Ukraine, while taking measures to ensure that oil could still flow to emerging nations.

The US Treasury, however, warned that the cap could send oil and U.S. gasoline prices even higher this winter. 

The EU’s executive European Commission is due on Wednesday to unveil a package of measures to help power firms facing a liquidity crunch.

France, Britain and Germany also on Saturday said they had “serious doubts” about Iran’s intentions to revive a nuclear deal. Failure to revive the 2015 deal would keep Iranian oil off the market and keep global supply tight.

In more bearish news for markets, China’s oil demand could contract for the first time in two decades this year as Beijing’s zero-COVID policy keeps people at home during holidays and reduces fuel consumption.

The European Central Bank and US Federal Reserve, meanwhile, are prepared to increase interest rates further to tackle inflation, which could strengthen the US currency and make dollar-denominated oil more expensive for investors.


Oil Updates — crude prices up on Saudi Arabia’s production cut decision

Oil Updates — crude prices up on Saudi Arabia’s production cut decision
Updated 12 sec ago

Oil Updates — crude prices up on Saudi Arabia’s production cut decision

Oil Updates — crude prices up on Saudi Arabia’s production cut decision

RIYADH: Oil prices were up nearly $1 a barrel on Monday after Saudi Arabia pledged to cut production by another 1 million barrels per day from July. 

Brent crude futures were at $77.07 a barrel, up 94 cents, or 1.23 percent, at 9:05 a.m. Saudi time, while US West Texas Intermediate crude climbed 96 cents or 1.34 percent to $72.70 a barrel. 

The contracts extended gains of over 2 percent on Friday after the Saudi energy ministry said the Kingdom’s output would drop to 9 million barrels per day in July from around 10 million bpd in May. The cut is Saudi Arabia’s biggest in years. 

The voluntary cut pledged by Saudi on Sunday is on top of a broader deal by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to limit supply into 2024 as the group seeks to boost flagging oil prices. 

OPEC+ pumps around 40 percent of the world’s crude and has cuts of 3.66 million bpd in place, amounting to 3.6 percent of global demand. 

Russia fully enforces its oil output cuts, Novak says 

Russian Deputy Prime Minister Alexander Novak told Rossiya-24 TV channel on Sunday following a meeting of the OPEC+ group that Russia is fulfilling its oil output cut obligations. 

“The result of the discussions was the extension of the deal until the end of 2024,” Novak said. 

Separately, Novak’s office said that Russia would tweak its crude oil production level to 9.828 million bpd from Jan. 1, and considering earlier announced additional voluntary reduction of 500,000 bpd, its output target will stand at around 9.3 million bpd. 

Novak also said the market is more or less balanced, and demand is rising. However, the group would monitor interest rate decisions by global central banks, including the US Federal Reserve, for clues on the economy that could influence fuel consumption. 

“That’s the indicator (interest rate decisions), which is having an impact on investments, on demand for oil and oil products,” he said. 

Novak also said that OPEC+ could adjust its decisions if necessary. 

He said the data from secondary sources related to the OPEC+ voluntary cuts starting from May would emerge in the middle of this month. 

(With input from Reuters) 


UAE’s non-oil outlook positive despite slight PMI dip in May  

UAE’s non-oil outlook positive despite slight PMI dip in May  
Updated 05 June 2023

UAE’s non-oil outlook positive despite slight PMI dip in May  

UAE’s non-oil outlook positive despite slight PMI dip in May  

RIYADH: The UAE’s non-oil private sector growth outlook remained positive in May, even as the seasonally adjusted S&P Global Purchasing Managers’ Index fell to 55.5 compared to 56.6 in April.  

The S&P Global report noted that improved operating conditions drove business confidence to its strongest levels since October 2021.  

According to the index, PMI readings above 50 show non-oil private sector growth, while those below 50 signal contraction.  

“The UAE PMI pointed to another strong performance across the non-oil sector midway through the second quarter of 2023. Despite slipping from April’s six-month high of 56.6, the latest headline reading of 55.5 signaled a robust improvement in business conditions, driven by marked upturns in activity and new work,” said David Owen, senior economist at S&P Global Market Intelligence.  

He added: “The Future Output Index showed optimism rising to the highest level since October 2021, with firms pinning their hopes on projections that the strong run of demand momentum will continue.” 

 


Saudi Arabia’s non-oil sector growth steady as PMI clocks 58.5 in May

Saudi Arabia’s non-oil sector growth steady as PMI clocks 58.5 in May
Updated 05 June 2023

Saudi Arabia’s non-oil sector growth steady as PMI clocks 58.5 in May

Saudi Arabia’s non-oil sector growth steady as PMI clocks 58.5 in May

RIYADH: Saudi Arabia’s economic diversification strategy, in line with the goals outlined in Vision 2030, is progressing steadily as the Kingdom’s non-oil sector posted substantial momentum in May, according to a business survey. 

The latest Riyad Bank Saudi Arabia Purchasing Managers’ Index report, formerly the S&P Global Saudi Arabia PMI, revealed that the Kingdom’s PMI stood at 58.5 in May, well above the 50 reading, indicating economic growth. 

Saudi Arabia’s PMI, however, slightly went down in May, compared to 59.6 in April. 

“The Kingdom’s non-oil GDP is likely to have notably grown in the second quarter this year thanks to the healthy state of the private sector. While a slower oil economy and rising interest rates will create a challenging environment for some establishments, most Saudi firms are in good shape and experiencing robust business conditions,” said Naif Al-Ghaith, chief economist at Riyad Bank. 

He added: “May results show a small retracement from the strong April outcome, reinforcing the view that overall economic activity is holding up well as we enter the summer month.” 


Saudi Arabia to cut oil output in July, extend OPEC+ voluntary cut until end of 2024

Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman arrives for an OPEC meeting in Vienna, Austria, June 3, 2023.
Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman arrives for an OPEC meeting in Vienna, Austria, June 3, 2023.
Updated 04 June 2023

Saudi Arabia to cut oil output in July, extend OPEC+ voluntary cut until end of 2024

Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman arrives for an OPEC meeting in Vienna, Austria, June 3, 2023.
  • OPEC+ member countries agreed a new output target of 40.46 million bpd from 2024

RIYADH: Saudi Arabia will extend its voluntary cut of 500,000 bpd until the end of December 2024, in coordination with some countries participating in the OPEC+ agreement, the Kingdom’s energy ministry said on Sunday.

This voluntary reduction from the required production level was agreed upon at the OPEC+ meeting held on Sunday, the ministry added.

The ministry also announced an additional voluntary oil output cut of 1 million bpd for July, which could be extended further.

This would mean that the Kingdom’s production becomes 9 million bpd, and its total voluntary cut will be 1.5 million bpd in July, Saudi Press Agency reported.

The ministry said the additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries that aim to support the stability and balance of oil markets.

OPEC+ member countries also agreed a new output target of 40.46 million bpd from 2024, a statement issued by the group said.


Saudi Arabia, China contemplate energy security through petrochemical JVs

Saudi Arabia, China contemplate energy security through petrochemical JVs
Updated 04 June 2023

Saudi Arabia, China contemplate energy security through petrochemical JVs

Saudi Arabia, China contemplate energy security through petrochemical JVs

RIYADH: Saudi Arabia and China are collaborating to ensure safe energy supplies in their markets by planning to establish petrochemical joint ventures.

Saudi Minister of Energy Abdulaziz Al-Saud held a meeting with the chairman of the National Energy Authority of the Republic of China, Zhang Jianhua, in Riyadh to discuss JVs that will transform crude oil into petrochemicals and develop innovative uses of hydrocarbons, nuclear energy and fuel. 

Both nations are working to increase collaboration in the energy sector’s supply chains. 

Al-Saud and Zhang also discussed ways to boost ties between the countries in numerous energy fields, which will help achieve the goals outlined in Saudi Vision 2030 and China’s Belt and Road Initiative. 

Further collaborations between both countries are anticipated as the Kingdom is set to host the 10th session of the Arab-Chinese Business Conference and the eighth Investment Symposium. 

Set to take place between June 11 and 12 in Riyadh, the conference is expected to be the largest Arab-Chinese gathering for business and investment. 

It will host over 2,000 participants, including high-level government representatives, senior officials, CEOs, investors and entrepreneurs.

“Collaborating for Prosperity” aims to boost cooperation in the economy, trade and investment to achieve solutions of mutual interest to Arab nations and China through strategic collaboration. 

It is organized by the Kingdom’s investment and foreign affairs ministries in partnership with the Chinese Council for the Promotion of International Trade and several government agencies. 

Saudi Investment Minister Khalid Al-Falih said that trade and cultural ties between Arab countries and China extended over 2,000 years and that the conference reflected that historical relationship. 

He added that Saudi-Chinese relations had developed, especially following King Salman’s visit to China in 2017 and the two historic visits by Crown Prince Mohammed bin Salman to Beijing in 2016 and 2019. 

Trade in 2022 between the Arab countries and China reached SR1.6 trillion ($430 billion), a 31 percent increase from the previous year. 

Saudi Arabia led the way with trade between the countries reaching around SR400 billion ($106 billion), a 30 percent increase over 2021.