Oil Updates – Oil gains reverse on banking sector fragility

Update Oil Updates – Oil gains reverse on banking sector fragility
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Brent Crude Futures fell by 76 cents, or 1.02 percent, to $73.94 a barrel by 1322 GMT. US West Texas Intermediate crude was down 52 cents at $67.83. (AFP)
Update Oil Updates – Oil gains reverse on banking sector fragility
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Brent crude futures fell by 76 cents, or 1.02 percent, to $73.94 a barrel by 1322 GMT (Shutterstock)
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Updated 17 March 2023

Oil Updates – Oil gains reverse on banking sector fragility

Oil Updates – Oil gains reverse on banking sector fragility
  • Pressure this week followed the collapse of Silicon Valley Bank and trouble at Credit Suisse

LONDON: Oil prices fell in volatile trade on Friday, reversing earlier gains of more than $1 a barrel, as banking sector fears set crude on course for its biggest weekly decline in months, according to Reuters.

Brent crude futures fell by 76 cents, or 1.02 percent, to $73.94 a barrel by 1322 GMT. US West Texas Intermediate crude was down 52 cents, or 0.76 percent, at $67.83.

Both benchmarks hit more than one-year lows this week. Brent was on track for its biggest weekly fall since December at more than 10 percent, while WTI was heading toward a loss of more than 11 percent, its biggest since last April.

Pressure this week followed the collapse of Silicon Valley Bank and Signature Bank and trouble at Credit Suisse and First Republic Bank.

Prices recovered some ground on Friday after support measures from the European Central Bank and US lenders, but dropped again when SVB Financial Group said it had filed for reorganization. The news also sent shares of big US banks down by more than 1.5 percent in pre-market trading.

FASTFACT

Analysts expect China’s demand recovery to add price support, with US crude exports to China in March heading toward their highest in nearly two and a half years.

“The conditions for volatile trading remain intact. The oil price roller-coaster is pausing for breath but is by no means over,” said Stephen Brennock of oil broker PVM.

The drop in prices highlights “the continued fragile state of the market,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Analysts do, however, expect constrained global supply to support prices in the foreseeable future.

Members of he Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, attributed this week’s price weakness to financial drivers rather than any supply and demand imbalance, adding that they expected the market to stabilize.

WTI’s fall this week to less than $70 a barrel for the first time since December 2021 could spur the US government to start refilling its Strategic Petroleum Reserve, boosting demand.

And analysts expect China’s demand recovery to add price support, with US crude exports to China in March heading toward their highest in nearly two and a half years.

Saudi Arabia and Russia in a meeting on Thursday affirmed their commitment to OPEC+’s decision last October to cut production targets by two million barrels per day until the end of 2023.

An OPEC+ monitoring panel is due to meet on Apr. 3. 


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 10 sec ago

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 one of 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 1 min 24 sec ago

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.  


PIF-owned Riyadh Air receives designator code from IATA

PIF-owned Riyadh Air receives designator code from IATA
Updated 04 June 2023

PIF-owned Riyadh Air receives designator code from IATA

PIF-owned Riyadh Air receives designator code from IATA
  • Riyadh Air unveils first of two liveries

RIYADH: Marking a significant milestone for Saudi Arabia’s new world-class carrier as it prepares to start operations, Riyadh Air secured the “RX” designator code from the International Air Transport Association.  

Riyadh Air CEO Tony Douglas made this announcement at the IATA’s 79th annual general meeting being held in Istanbul, Turkiye.  

“We are delighted to announce that we have obtained ‘RX’ as our IATA code, which will be on every touch point that our guests see as they take flight with us. The code reflects our ambition to be a digitally led airline, having the connection of innovation and state-of-the-art technology,” Douglas said.  

The new airline also unveiled the first of two liveries it will deploy as preparations continue for its launch of flights in 2025.

 

It released a video on social media on Sunday illustrating its livery. Owned entirely by the Public Investment Fund, Riyadh Air was inaugurated in March, with a vision to transform the Kingdom’s capital into a global hub for travel and trade.  

The airline, gearing up to start operations by early 2025, confirmed an order of 72 Boeing 787-9 Dreamliners the same month, and is anticipated to order another 150 Boeing 737 Max soon.  

“Riyadh Air has made another strategic milestone toward its operations in 2025, and we are so excited for our guests to be able to travel to over 100 destinations with our code on their bag tags, booking documents and digital services,” Douglas added.   

The airline aims to leverage Saudi Arabia’s strategic positioning, linking the three continents of Asia, Africa and Europe. This initiative will stimulate economic growth and diversification in the Kingdom, creating over 200,000 job opportunities, both directly and indirectly.

Riyadh Air was founded to bolster the Kingdom’s national aviation strategy as well as the broader national transport and logistics strategy, aligning with the ambition to achieve Vision 2030 objectives.  

“It has been an absolute pleasure to be on the ground at the IATA AGM. The Riyadh Air team is able to meet with industry stakeholders and experts to discuss safe, efficient and technologically advanced topics in the global air travel industry,” Douglas stated.  

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