Head of UAE’s ADNOC says little room for maneuver in oil markets

Head of UAE’s ADNOC says little room for maneuver in oil markets
Al-Jaber warned against underinvestment in the current energy sector (File)
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Updated 23 September 2022

Head of UAE’s ADNOC says little room for maneuver in oil markets

Head of UAE’s ADNOC says little room for maneuver in oil markets

DUBAI, Sept 22 : Abu Dhabi National Oil Co. CEO Sultan Al-Jaber said on Thursday there was little room to maneuver in oil markets that may face further disruption with minimal spare capacity.

Speaking at an event in New York, Jaber also warned that underinvestment in the current energy sector before alternative sources of supply were ready was a recipe for disaster, not progress.

“If people’s basic energy needs are not met, economic development slows down, and so does climate action,” Jaber said.

“If we under-invest in the energy system of today before the energy system of tomorrow is ready, we will only make matters worse.”

Jaber put spare oil capacity at less than 2 percent of global consumption.

The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, has been warning since August that the spare capacity cushion was thin.

Saudi Arabia and the UAE are believed to hold the bulk of that spare capacity within the alliance, and are the only two members with the ability to increase production in a meaningful way.

On Thursday Jaber also warned of a wide funding gap between investment in renewables and the portion of those funds dedicated to zero-carbon energies that can transition heavy industry, manufacturing, construction and agriculture.

“As global energy demand continues to increase, we need to collectively and quickly decarbonize the existing energy sources that the world still relies on,” Jaber, who is also the UAE’s special envoy for climate change, said.

“We are a global energy player and fully committed to the energy transition,” he said.


Europe’s biggest nuclear reactor reaches full power

Europe’s biggest nuclear reactor reaches full power
Updated 13 sec ago

Europe’s biggest nuclear reactor reaches full power

Europe’s biggest nuclear reactor reaches full power

HELSINKI: Finland’s long-delayed Olkiluoto 3 nuclear reactor has reached full power to become the most powerful electricity production facility in Europe, operator TVO said Friday, a boost amid a continent-wide energy crunch.

With a power level of 1,600 megawatts, the plant located on the Nordic country’s southwestern coast is also now the third most powerful electricity production facility globally, the company said.

OL3’s production is being closely followed in Finland, where the hope is that the plant could ease the coming winter’s challenges as European energy prices have soared following Russia’s invasion of Ukraine.

“The plant unit is now the most powerful electricity production facility in Europe,” TVO said in a statement, adding that regular operation is expected to start in December 2022.

Around 40 percent of Finland’s electricity production now comes from Olkiluoto, as the OL1 and OL2 reactors combined produce approximately 21 percent and the new OL3 alone around 19 percent.

The reactor, built by the French-led Areva-Siemens consortium, went online in March — 12 years behind schedule — after suffering a long string of setbacks.

The plant’s regular production was expected to start this summer but was postponed to December, after “foreign material” was observed in the turbine’s steam reheater.

Operator TVO said that the ten remaining sets of tests will impact the power levels in the coming months.

“In some of the upcoming tests, the plant unit’s production is either intentionally interrupted or the power level is lowered,” the company said.

The European Pressurised Reactor model was designed to relaunch nuclear power in Europe after the 1986 Chernobyl catastrophe, and was touted as offering higher power outputs and better safety.


Oil holds steady on prospect of OPEC+ output cut, weaker dollar

Oil holds steady on prospect of OPEC+ output cut, weaker dollar
Updated 30 September 2022

Oil holds steady on prospect of OPEC+ output cut, weaker dollar

Oil holds steady on prospect of OPEC+ output cut, weaker dollar

SINGAPORE: Oil prices were little changed during Asian trade on Friday, though were headed for their first weekly gain in five weeks, underpinned by a weaker US dollar and the possibility that OPEC+ may agree to cut crude output when it meets on Oct. 5.

Brent crude futures for November, which expire on Friday, inched down 10 cents or 0.1 percent to $88.39 a barrel by 0303 GMT, after losing 83 cents in the previous session. The more active December contract was unchanged at $87.18.

US West Texas Intermediate (WTI) crude futures for November delivery rose 0.1 percent or by 9 cents to $81.32 a barrel, after falling 92 cents in the previous session.

“A deteriorating crude demand outlook won’t allow oil to rally until energy traders are confident that OPEC+ will slash output at the October 5th meeting,” Edward Moya, senior analyst with OANDA, said in a client note.

“The weakness with crude prices is somewhat limited as the dollar softens going into quarter-end.”

Both Brent and WTI are however on track to rise by about 3 percent for the week, their first weekly rise since August, after hitting nine-month lows earlier in the week.

Oil prices were shored up by a drop in the dollar from 20-year highs earlier in the week. A weaker greenback makes dollar-denominated oil cheaper for buyers holding other currencies, improving demand for the commodity.

For all of September, Brent is set to drop by 8.4 percent, down for a fourth month. During the third quarter, Brent has plunged 23 percent, its first quarterly loss since the fourth quarter of 2021.

WTI is set to fall by 9.3 percent in September, also its fourth monthly decline, and it dropped by 23 percent during the quarter, the first quarterly slump since the period ending in March 2020 when COVID-19 slammed demand.

Analysts said the market appeared to have found a floor, with supply set to tighten as the European Union will ban Russian oil imports from Dec. 5. However, the key unknown is how much demand will drop as global growth slows in the face of aggressive interest rate hikes.

“Fundamentally, I still think prices are likely to move higher from here on tightening of Russian sanctions and with low global crude inventories, and the SPR (US Strategic Petroleum Reserve) supplies falling off,” said National Australia Bank commodities analyst Baden Moore.

“I expect OPEC is well positioned to manage supply to offset risks to demand,” he said.

Leading members of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, have begun discussing an output cut ahead of their meeting on Wednesday, three people told Reuters.

Russia could suggest a cut of up to 1 million barrels per day, a person familiar with Russian thinking on the matter said earlier this week.

“In August, OPEC+ production was estimated at around 3.37 million barrels per day below target production levels. So in reality, any cut in supply will likely be smaller than whatever figure the group announces,” said ING Economics in a note. 

 


Oil settles lower after hitting $90/bbl as OPEC+ considers output cut

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut
Updated 30 September 2022

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut
  • OPEC+ has begun talks on output cut at Oct. 5 meet and Russia seen suggesting OPEC+ cuts output by 1 mln bpd — source
  • US markets slide on Fed’s aggressive moves to tame inflation; US production to return after shutting for Hurricane Ian

NEW YORK: Oil prices settled lower on Thursday in choppy trading, rising above $90 per barrel and then retreating as traders weighed a worsening economic outlook against potential OPEC+ output cuts next week.

Brent crude futures settled down 83 cents at $88.49 per barrel, after rising as high as $90.12 during the session. US crude futures for November settled 92 cents lower at $81.23 a barrel.

Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun discussions about an oil output cut at their next meeting on Oct. 5, three sources told Reuters.

OPEC+, which combines OPEC countries and allies such as Russia, agreed a small oil output cut of 100,000 barrels a day at its September meeting to bolster prices.

Top OPEC producer Saudi Arabia flagged in August the possibility of output cuts to address market volatility. 

Also at the group’s last meeting, OPEC+ members agreed to stick to their forecasts for robust global oil demand growth in 2022 and 2023, citing signs that major economies were faring better than expected despite headwinds such as surging inflation.

Oil demand will increase by 3.1 million barrels per day in 2022 and by 2.7 million bpd in 2023, unchanged from last month, OPEC said in its monthly report.

One OPEC source told Reuters a cut was “likely,” while two other OPEC+ sources said key members had spoken about the topic.

Reuters reported this week that Russia is likely to propose that OPEC+ reduce oil output by about 1 million barrels per day(bpd).

“Right now, the oil market is teetering between the Fed-induced demand destruction and tight oil supplies,” said Ryan Dusek, a director in the Commodity Risk Advisory Group at Opportune LLP.

US stock markets tumbled on worries that the Federal Reserve’s aggressive fight against inflation could hobble the US economy, and as investors fretted about a rout in global currency and debt markets.

“Amid so much uncertainty, seesaw trade may be common over the next week, unless we get more clarity from OPEC+ sources on the likely size of any adjustment and what it means for previous missed quotas,” said Craig Erlam, senior markets analyst at OANDA.

The market also eased as the threat of Hurricane Ian receded with US oil production expected to return in coming days after about 158,000 bpd was shut in the Gulf of Mexico as of Wednesday, according to federal data.

In China, the world’s biggest crude oil importer, travel during the forthcoming week-long national holiday is set to hit its lowest level in years as Beijing’s zero-COVID rules keep people at home while economic woes curb spending.

Crude benchmarks remain on pace to notch weekly gains after a four-week losing streak. Early this week they rebounded from nine-month lows, buoyed by a dip in the US dollar index and a larger than expected US fuel inventory drawdown.

The dollar index dropped again on Thursday, easing off 20-year highs, indicating some more risk appetite from investors.

Further support for oil prices could come from the United States announcing new sanctions against companies that facilitated Iranian oil sales.

“I think traders have almost given up on a nuclear deal being agreed and this announcement from the US appears to be a make or break move,” said Erlam.


Saudi Arabia launches $10bn food security plan: Minister

Saudi Arabia launches $10bn food security plan: Minister
Updated 29 September 2022

Saudi Arabia launches $10bn food security plan: Minister

Saudi Arabia launches $10bn food security plan: Minister

RIYADH: Saudi Arabia, in coordination with its regional partners, has launched a food security action plan with an initial funding of $10 billion to tackle the global food supply crisis, the Kingdom’s minister of environment, water and agriculture said.

Speaking at a meeting of G20 agriculture ministers in Indonesia, Abdulrahman Al-Fadhli said the Kingdom will continue its role in helping stabilize the global food production supply chain.

On the domestic front, he added, the Kingdom has also succeeded in reducing the use of water for agricultural purposes by more than 40 percent, the Saudi Press Agency quoted him as saying.

Al-Fadhli also highlighted the Kingdom’s achievement in the agricultural sector, which according to him, grew by more than 7.8 percent in 2022 compared to the previous year. 

He said the Kingdom is applying modern techniques to boost its agriculture sector and reduce wastage of water.


PIF-owned Savvy aims to transform KSA into gaming hub with $37.8bn investment, says CEO

PIF-owned Savvy aims to transform KSA into gaming hub with $37.8bn investment, says CEO
Updated 29 September 2022

PIF-owned Savvy aims to transform KSA into gaming hub with $37.8bn investment, says CEO

PIF-owned Savvy aims to transform KSA into gaming hub with $37.8bn investment, says CEO

RIYADH: With investments worth SR142 billion ($37.8 billion), Saudi Arabia’s PIF-owned Savvy Games Group seeks to transform the Kingdom into a global gaming hub with world-class gaming companies, said CEO Brian Ward.

Ward was addressing members of the media following the announcement of the company’s strategy by Crown Prince Mohammed bin Salman on Thursday.

The investments will include SR70 billion to take several minority stakes in companies that support Savvy’s game development agenda and SR50 billion to acquire “a leading game publisher to become a strategic development partner.”

Another SR20 billion will be invested in industry partners and SR2 billion will target industry disruptors “to grow early-stage games and esports companies.”

“Savvy Games Group is one part of our ambitious strategy aiming to make Saudi Arabia the ultimate global hub for the games and esports sector by 2030,” the Saudi Press Agency quoted Crown Prince Mohammed bin Salman as saying.

Savvy's CEO Brian Ward

In the press briefing, Ward said: “Our mission will be to lead global investments in the sector.”

He said gaming and esports is the largest entertainment sector with a potential to “exceed $300 billion by 2020 and $400 billion by 2028.”

Ward said Savvy aims to accelerate the growth of the sector in the Kingdom and take advantage of Saudi Arabia’s “unique geopolitical position in the world.”

The PIF-owned company has five independent subsidiaries, including esports arm EFG, as well as Nine66, which "is building an ecosystem for game developers and studios,” and VOV company, which is building gaming and competition venues.

“We intend to make new investments in startups and (established) tech companies,” the top official said.

He also told the media that more details about the company’s acquisition deals and agreements strategy would be announced in the next six months.

Ward said the strategy unveiled on Wednesday seeks to help local gaming companies grow into global players producing world-class games.