OPEC+ supply cut essential to buoy oil prices, UBS says

OPEC+ supply cut essential to buoy oil prices, UBS says
OPEC+ is scheduled to meet next on Oct. 5 (Shutterstock)
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Updated 27 September 2022

OPEC+ supply cut essential to buoy oil prices, UBS says

OPEC+ supply cut essential to buoy oil prices, UBS says

RIYADH: An oil production cut by the Organization of the Petroleum Exporting Countries and allies is vital to break the negative momentum in prices amid recession fears and a stronger dollar, analysts at UBS said on Tuesday, according to Reuters.

“A lack of action by the group to remove barrels from the market is likely to spur further downside pressure on oil prices,” UBS said in a note.

“The group has to announce a production cut of at least 0.5 million barrels per day over the coming days.”

The Organization of the Petroleum Exporting Countries, Russia and other producers known as OPEC+, is scheduled to meet next on Oct. 5.

Crude is falling on fears that a recession will lead to weaker demand and a better supplied oil market, UBS said, adding that the broader risk-off environment caused by aggressive monetary policy tightening in the US and Europe was also weighing on prices.

Oil prices on rose more than 1 percent on Tuesday, after plunging to nine-month lows a day earlier, amid indications that producer alliance OPEC+ may enact output cuts to avoid a further collapse in prices. 


DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone

DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone
Updated 9 sec ago

DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone

DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone
  • The company said the storage facility has a monthly capacity of 6,000 twenty-foot equivalent units

DUBAI: DP World Logistics in Dubai has opened a 6,000-square-meter high-end warehouse offering new storage solutions at Jebel Ali Free Zone, the Emirates News Agency reported.

The facility has 12,500 pallet positions and can accommodate cargo up to 18 meters high using Very Narrow Aisle racking systems, the company said, and a monthly capacity of 6,000 twenty-foot equivalent units.

DP World Logistics highlighted its advantageous location in what it described as one of the world’s fastest-developing regions and said that it is able to leverage the capabilities and cutting-edge IT platforms of its parent company, DP World, to ensure goods are stored, distributed and delivered efficiently through a multimodal transportation model that combines port, shipping line, sea freight, air freight and trucking solutions.

The company said it offers container freight station operations, warehousing and supply chain solutions, and freight-forwarding operations from six facilities in Jebel Ali and its assets include extensive yard operations, cross-dock warehousing, and cold storage and cool storage solutions.

“As part of DP World, a global smart-trade enabler, DP World Logistics is continually on a journey of business transformation, with new product innovations and developments,” said Abdulla bin Damithan, the CEO of DP World UAE and Jafza.

“Our shared commitment to improve end-to-end logistics performance in moving cargo around the world, underpinned by innovations in logistics-led solutions, has maximized opportunities for our customers over the years.

“The new CFS 2 warehouse is yet another step in supporting our customers better, helping them explore varied business opportunities and move forward with tremendous growth potential in the region. As a reliable, trustworthy and time-bound logistics partner, we will continue creating a complete end-to-end logistics trade journey from and to high-growth markets for our clients.”


Saudi-Chinese relations witness ‘qualitative leap,’ says energy minister

Saudi-Chinese relations witness ‘qualitative leap,’ says energy minister
Updated 07 December 2022

Saudi-Chinese relations witness ‘qualitative leap,’ says energy minister

Saudi-Chinese relations witness ‘qualitative leap,’ says energy minister
  • China has become the top destination for Saudi oil exports
  • President Xi Jinping arrived in Saudi Arabia earlier on Wednesday as part of a three-day visit

RIYADH: Saudi Energy Minister Prince Abdulaziz bin Salman on Wednesday said that relations between the Kingdom and China are witnessing a qualitative leap, reflecting the keenness of both countries’ leaderships to develop them at all levels.

In remarks to the Saudi Press Agency during the Saudi-Chinese Summit in Riyadh, Prince Abdulaziz said that the Kingdom has strong and close strategic relations with China in many fields, the most important of which is energy.

China has become the top destination for Saudi oil exports as part of the high volume of trade exchange between the two countries, with continued annual growth over the past five years, he said, adding that Saudi-Chinese energy ties include multiple joint investments.

China’s President Xi Jinping arrived in Saudi Arabia earlier on Wednesday as part of a three-day visit to the Kingdom following an invitation by King Salman to attend the summit, which will run until Dec. 9.

Prince Abdulaziz highlighted the importance of cooperation between the two countries in maintaining stability of the global oil market, and said that the Kingdom will remain China’s credible and reliable partner in facing future energy challenges.

The minister also reviewed areas of cooperation between the Kingdom and China, mainly through projects to convert crude oil into petrochemicals, renewable energy, clean hydrogen, electricity projects and peaceful uses of nuclear energy, as well as investment in integrated refining and petrochemical complexes in both countries.

He highlighted the two nations’ efforts to boost cooperation in energy supply chains by establishing a regional center in the Kingdom for Chinese factories.


Budget 2023: Saudi Arabia exceeds surplus estimate and revises up GDP forecast

Budget 2023: Saudi Arabia exceeds surplus estimate and revises up GDP forecast
Updated 40 min 36 sec ago

Budget 2023: Saudi Arabia exceeds surplus estimate and revises up GDP forecast

Budget 2023: Saudi Arabia exceeds surplus estimate and revises up GDP forecast

RIYADH: Saudi Arabia has recorded a larger-then-expected budget surplus for 2022 of SR102 billion ($27.13 billion) — SR12 billion higher than previously forecast.

The surplus comes as the Kingdom's gross domestic product is also set to exceed expectations — registering growth of 8.5 percent compared with the 7.5 percent estimated in December 2021 and the 8 percent forecast in pre-Budget statement published at the end of September.

GDP growth is forecast to slow to 3.1 percent in 2023.

The revelations came as the Saudi government approved a SR1.114 trillion budget for 2023, itself expected to post a surplus of SR16 billion, Saudi media outlets reported.

The Kingdom expects revenues of SR1.13 trillion next year, Saudi-owned Al Arabiya TV reported. The surplus is equivalent to 0.4 percent of gross domestic product — 0.2 percentage points higher than forecast in September 

Total revenues are forecast at SR1.234 trillion for 2022, while spending is SR1.132 trillion, meaning a surplus of 2.6 percent of GDP — 0.1 percentage point higher than previously forecast.

Saudi Arabia’s inflation, which recorded 2.6 percent in 2022, is expected to fall to 2.1 percent in 2023.

Later on Wednesday, the Saudi cabinet approved the budget in a meeting that was chaired by King Salman at Al-Yamamah Palace in Riyadh, the Saudi Press Agency reported.
“We announced the general budget of the state for the next year, asking God Almighty to perpetuate the blessing of security and prosperity,” the king said.
Following his speech, the Council of Ministers completed the session headed by Crown Prince Mohammed bin Salman, where they thanked King Salman for attending the session to announce the state general budget for the next fiscal year.
The ministers reviewed the provisions of the budget, and issued its decision regarding the revenue, expenditure and surplus.
The crown prince directed the ministers and officials to actively commit to implementing the budget programs and the development and social projects.


Saudi’s KAPSARC signs information exchange agreement with Chinese research institute

Saudi’s KAPSARC signs information exchange agreement with Chinese research institute
Updated 07 December 2022

Saudi’s KAPSARC signs information exchange agreement with Chinese research institute

Saudi’s KAPSARC signs information exchange agreement with Chinese research institute

RIYADH: Saudi Arabian think tank King Abdullah Petroleum Studies and Research Center, has signed a Memorandum of Understanding with China’s Economics & Technology Research Institute to exchange information around energy, economics, and climate change

Under the terms of the MoU, both entities will work hand in hand in order to allow for the exchange of research and the generation of actionable insights.

Some of the fields of common interest which will be prioritized topics of research include energy, economics, climate change, sustainability, transition, productivity, hydrogen, carbon capture, among others.

The MoU falls in line with KAPSARC’s mission to utilize applied research and innovation to drive and propel the global energy sector, while the Chinese organization is affiliated with oil and gas firm China National Petroleum Corporation.

“We see a lot of common interest and alignment between China’s and Saudi Arabia's position when it comes to energy and climate. We both understand and reiterate the idea of common but differentiated responsibility when it comes to climate change,” KAPSARC’s president Fahad Alajlan said in a statement.

Through joint workshops, the exchange of ideas and insights between experts, and the creation of platforms that facilitate global cooperation and knowledge exchange, both institutions will work together on deliver research.

“As important energy producers and consumers in the world, China and Saudi Arabia play an important role in maintaining the stability of the international energy market, addressing climate change, and promoting the realization of energy green transformation goals,” added CNPC ETRI’s president Yu Guo.


Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell

Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell
Updated 07 December 2022

Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell

Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell

RIYADH: The Tadawul All Share Index collapsed on Wednesday, losing 259.13 points — or 2.48 percent — to close at 10,185.14 points. The last time the index witnessed this level was on April 26, 2021, when the market ended at 10,231.  

The advance-decline ratio took a huge hit, after 158 stocks of the listed 219 dropped while 42 gained. The total trading turnover was SR3.68 billion ($980 million) compared to Tuesday’s SR4.96 billion. 

TASI’s steep fall was driven by the banking index, which fell 448.45 points or 3.88 percent to 11,123.58. While Al Rajhi Bank tumbled 4.88 percent to close at SR74, Riyad Bank shed 4.7 percent to SR30.40. Arab National Bank slumped 4.08 percent to SR30.55. 

The other indices that boarded the southbound bandwagon were MSCI Tadawul 30 Index, which fell by 2.99 percent, Diversified Financials by 2.77 percent, Healthcare Equipment and Services by 2.72 percent and Materials by 2.42 percent.  

According to market sources, the dampened spirit among investors could be attributed to the fear of a global economic downturn. The hunch that the US Federal Reserve could increase interest rates further, following positive US services industry data released on Monday, upset the apple cart. 

The trend is contagious as Saudi Arabia, like most Gulf Cooperation Council countries, has its currency pegged to the US dollar. Therefore, any policy move of the Fed has a direct impact on the regional markets. 

The Qatari index QE General slumped 154.24 points to close at 11,463.07, while the Abu Dhabi index FTSE ADX General declined 71.61 points to end at 10,336.34.  

Back to Tadawul, the top loser of Wednesday was Tourism Enterprise Co., which slid 5.3 percent to close at SR22.90, while the top gainer was Buruj Cooperative Insurance Co. It rose 9.61 percent to end at SR16.66. 

On a positive note, on Wednesday, Scientific & Medical Equipment House Co. bagged a medical operation project tender in the medical centers affiliated with the General Department of Medical Services at a total value of SR8.71 million.  

The project will be implemented in 14 months in four affiliated medical centers across Riyadh, Jeddah, Taif and Al-Muzahimiyah.