Oil plunges to eight-month low on strong dollar, recession fears

Update Oil plunges to eight-month low on strong dollar, recession fears
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Updated 24 September 2022

Oil plunges to eight-month low on strong dollar, recession fears

Oil plunges to eight-month low on strong dollar, recession fears

NEW YORK: Oil prices plunged about 5 percent to an eight-month low on Friday as the US dollar hit its strongest level in more than two decades and on fears rising interest rates will tip major economies into recession, according to Reuters.

Brent futures were down $4.35, or 4.8 percent, to $86.11 a barrel by 10:09 a.m. EDT, while US West Texas Intermediate crude fell $4.58, or 5.5 percent, to $78.91.

That puts both benchmarks into technically oversold territory and WTI on track for its lowest close since Jan. 10 and Brent on track for its lowest close since Jan. 13.

For the week, WTI was down about 7 percent and Brent down about 6 percent, the fourth straight week of declines for the benchmarks, the first time this has happened since December.

HIGHLIGHTS

The US dollar was on track for its highest close against a basket of other currencies since May 2002.

A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.

The downturn in business activity across the eurozone deepened in September, a survey showed, suggesting that a recession is looming.

US gasoline and diesel futures were also down more than 5 percent.

After the US Federal Reserve raised interest rates by a hefty 75 basis points on Wednesday, central banks around the world followed suit with hikes of their own, raising the risk of economic slowdowns.

“The crude market is under heavy selling pressure as US dollar maintains strong upward trajectory amidst more reduction in risk appetite,” analysts at energy consulting firm Ritterbusch and Associates said.

The US dollar was on track for its highest close against a basket of other currencies since May 2002. A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.

The downturn in business activity across the euro zone deepened in September, a survey showed, suggesting that a recession is looming as consumers rein in spending to contend with higher energy prices and as governments urge conservation following Russia’s moves to cut off European energy supply.

Global equities hit a two-year low on Friday while the dollar index reached its highest level in two decades, putting downward pressure on oil. British government bond yields surged in response to the government’s plans to reduce taxes, and the pound slid to a 37-year-low against the dollar, spurring selling in other currencies.

Russia launched referendums on Friday aimed at annexing four occupied regions of Ukraine, which Kyiv called an illegal sham that it said included threats to residents if they do not vote.

On the supply side, efforts to revive the 2015 Iran nuclear deal have stalled as Tehran insists on the closure of the UN nuclear watchdog’s investigations, a senior US State Department official said, easing expectations of a resurgence of Iranian crude oil exports.


Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants

Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants
Updated 16 sec ago

Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants

Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants

RIYADH: Oil prices edged up on Tuesday as expectations that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, may agree to a large cut in crude output when it meets on Wednesday outweighed concerns about the global economy.

Brent crude futures rose 46 cents, or 0.5 percent, to $89.32 per barrel by 0629 GMT after gaining more than 4 percent in the previous session.

US crude futures rose 30 cents, or 0.4 percent, to $83.93 a barrel. The benchmark gained more than 5 percent in the previous session, its largest daily gain since May.

OPEC+ cancels technical meeting ahead of key meeting of ministers

OPEC+ canceled a meeting of its Joint Technical Committee set for Oct. 4 ahead of a key gathering of ministers from the producer group to set policy, three OPEC+ sources told Reuters on Monday.

The JTC advises the OPEC+ Joint Ministerial Monitoring Committee and the overall OPEC+ ministerial meeting on market fundamentals.

One of the sources said the decision to scrap the JTC meeting came from the JMMC, without elaborating.

Norway posts soldiers at oil, gas plants after Nord Stream leaks

Norway’s military said on Monday it had posted soldiers to help guard major onshore oil and gas processing plants, part of a wider effort to boost security amid suspicion that sabotage caused leaks in the Nord Stream gas pipelines last week.

Russia’s Nord Stream 1 and 2 pipelines burst on Sept. 26, draining gas into the Baltic Sea off the coast of Denmark and Sweden. Seismologists registered explosions in the area, and police in several countries have launched investigations.

Norway, Europe’s largest gas supplier and a major oil exporter, last week deployed its navy and air force to patrol offshore petroleum fields and announced it would receive assistance from Britain, Germany and France in doing so.

At the request of Norwegian police, the Norwegian Home Guard, a rapid mobilization force, on Monday began to deploy troops at plants responsible for processing and exporting oil and gas.

Although the Norwegian government has said it was not aware of any specific threats to oil and gas infrastructure, it still found it prudent to beef up security and sought to calm concerns among workers.

(With input from Reuters)


Saudi IT firm solutions by stc acquire Egypt’s Giza Systems

Saudi IT firm solutions by stc acquire Egypt’s Giza Systems
Updated 5 min 12 sec ago

Saudi IT firm solutions by stc acquire Egypt’s Giza Systems

Saudi IT firm solutions by stc acquire Egypt’s Giza Systems

RIYADH: Arabian Internet and Telecommunication Co., known as solutions by stc, has completed all necessary procedures to acquire a $158 million stake in Egypt's Giza Systems Co., a bourse filing revealed.

The Saudi-listed company had earlier entered a binding deal for the takeover of an 89.49 percent stake in Giza Systems in addition to 34 percent of its unit, Giza Arabia.

However, the acquisition percentage decreased to 88.19 percent, mainly due to executive management shares, it said.

The financial impact will appear in the company’s financial statements from the fourth quarter of 2022.

solutions by stc saw its share price increase 2.85 percent at the opening of bell of Tuesday to reach SR252 ($67), at 10:10 a.m. Saudi time. 


Japan energy minister emphasizes importance of Saudi and Arab suppliers

Japan energy minister emphasizes importance of Saudi and Arab suppliers
Updated 37 min 37 sec ago

Japan energy minister emphasizes importance of Saudi and Arab suppliers

Japan energy minister emphasizes importance of Saudi and Arab suppliers
  • Japan depended on the Middle East for 95 percent of its oil in August and 98 percent in July

TOKYO: Japan’s Minister of Economy, Trade and Industry NISHIMURA Yasutoshi requested Saudi Arabia and other Arab countries to guarantee stable supply of oil.

Nishimura said he had met with executives from Aramco and has proposed talks with Saudi Arabia’s Energy Minister Abdulaziz bin Salman Al Saud.

He also met recently with Sultan Al-Jaber, UAE Minister of Industry and Advanced Technology and CEO of Abu Dhabi National Oil Company (ADNOC), as well as Talal Al-Awfi, Oman’s Minister of Energy and Minerals.

“I requested a stable supply of oil and LNG,” Nishimura said at a press conference at the ministry in reply to a question from Arab News Japan. “I got the reply that they will continue to cooperate with us.”

In the absence of imports from Iran and Russia due to sanctions enforced by the US, more than 90 percent of Japan’s supplies now come from Arab sources.

“It is important for Japan, which lacks resources, to promote a stable supply of crude oil,” Nishimura said. “It is true that oil imports from Russia have stopped and dependence on the Middle East is increasing. We are making decisions on specific sources of crude oil from the perspective of the market.”

“Japan depended on the Middle East for 95 percent of its oil in August and 98 percent in July, so we recognize the region as extremely important in terms of energy security and a stable supply of crude oil.”

Japan is looking to expand its energy business with the Middle East to include clean energy as well as oil and gas.

“We believe that the Middle East is also playing an important role in building the hydrogen and ammonia supply chain,” Nishimura said. “I hope such cooperative relationships will also be strengthened. Furthermore, Japan will strive to diversify its supply sources from the viewpoint of stable supply and security, and domestically also pursue all options, including the utilization and diversification of renewable energy and nuclear energy.”


Anaam International's shares rise as it plans $42m capital increase

Anaam International's shares rise as it plans $42m capital increase
Updated 26 min 41 sec ago

Anaam International's shares rise as it plans $42m capital increase

Anaam International's shares rise as it plans $42m capital increase

RIYADH: Saudi poultry processing firm Anaam International Holding Group’s board recommended an increase in capital of SR158 million ($42 million) through a rights issue, resulting in a rise in its share price.

Anaam International's share price climbed 3.53 percent to reach SR24.66, at 10:06 a.m. Saudi time.

The capital increase is aimed at boosting the working capital, lowering the loan rates, and supporting the business growth of the company, according to a bourse filing.

The capital hike is subject to the approval of the relevant official authorities and the company’s shareholders.

Wasatah Capital was appointed to act as the financial advisor to the offering.


Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global

Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global
Updated 04 October 2022

Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global

Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global

RIYADH: Business conditions in Egypt’s non-oil economy continue to be under strain with the country’s Purchasing Managers’ Index staying unchanged at 47.6 in September compared to the previous month, according to S&P Global.

According to S&P Global, a PMI above 50.0 marks growth, while those below 50.0 signals contraction.

Egypt’s PMI signals a solid deterioration in business conditions, albeit one that was the joint-weakest for seven months, as inflationary pressures, energy rationing, import restrictions, and weak demand continue to impact the country’s non-oil economy.  

“Non-oil activity in Egypt continued to suffer from weak demand, geopolitical tensions and surging inflation in the final month of the third quarter,” said Shreeya Patel, an economist at S&P Global Market Intelligence.

She added: “Firms nevertheless remain hopeful that macroeconomic conditions would improve in the medium-term, but for now, non-oil Egyptian businesses are challenged to operate in an environment which includes persistently high prices, weak demand and growing uncertainty.”