Oil rises on US crude draw and Iraqi supply risks

Oil rises on US crude draw and Iraqi supply risks
Oil prices rose on Thursday as a surprise drop in U.S. crude stockpiles and a halt to exports from Iraq's Kurdistan region offset a smaller than expected cut to Russian supplies. (Shutterstock/File)
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Updated 30 March 2023

Oil rises on US crude draw and Iraqi supply risks

Oil rises on US crude draw and Iraqi supply risks
  • US crude oil stockpiles fell unexpectedly in the week to March 24 to a two-year low
  • Crude inventories dropped by 7.5 million barrels, compared with expectations for a rise of 100,000 barrels in a Reuters poll of analysts

LONDON: Oil prices rose on Thursday as a surprise drop in US crude stockpiles and a halt to exports from Iraq’s Kurdistan region offset a smaller than expected cut to Russian supplies.
Brent crude futures rose 57 cents, or 0.73 percent, to $78.85 a barrel by 1327 GMT, while West Texas Intermediate crude rose 82 cents, or 1.12 percent, to $73.79.
US crude oil stockpiles fell unexpectedly in the week to March 24 to a two-year low, the Energy Information Administration said on Wednesday.
Crude inventories dropped by 7.5 million barrels, compared with expectations for a rise of 100,000 barrels in a Reuters poll of analysts.
The continuing halt to exports from Iraq’s northern region provided further support.
Producers have shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq after the northern export pipeline was shut, with more outages on the horizon, company statements showed.
But the Kurdistan-Iraq premium in oil prices could vanish sooner than expected, Citi analysts said Thursday.
The “changes in Iraq’s domestic politics may lead to a durable political settlement very soon,” Citi said, estimating that pipeline flows could increase by 200,000 barrels per day (bpd).
These factors offset bearish sentiment after a lower than expected cut to Russian crude oil production in the first three weeks of March.
The 300,000 bpd production decline compared with targeted cuts of 500,000 bpd, or about 5 percent of Russian output, sources familiar with the data told Reuters.
Markets are now waiting for US spending and inflation data due on Friday and the resulting impact on the value of the US dollar.
Meanwhile, OPEC+ is likely to stick to its existing deal on reduced oil output at a meeting on Monday, five delegates from the producer group told Reuters.
“While we think oil prices may remain volatile in the near term, we still expect rising Chinese crude imports and lower Russian production to lift prices over the coming quarters,” UBS said on Thursday.
China’s refined fuel consumption this year is likely to grow 3 percent from 2019 pre-COVID levels, state energy giant PetroChina said on Thursday.
“If all goes as expected, and we manage to avoid a recession, oil prices will dance around $75-$85/bbl in the coming months,” FGE analysts said in a note.


Saudi construction sector accounts for 6% of GDP, says official

Saudi construction sector accounts for 6% of GDP, says official
Updated 14 sec ago

Saudi construction sector accounts for 6% of GDP, says official

Saudi construction sector accounts for 6% of GDP, says official

RIYADH: The construction sector, valued at over SR255 billion ($68 billion) accounts for 6 percent of the gross domestic product of the Kingdom, according to the chairman of Saudi Contractors Authority.

Speaking at the Builders of Egypt Forum in Cairo on Sunday, Zakria Al-Abdulqadir said the construction sector is the second-largest non-oil sector in Saudi Arabia.

The official said the authority organized the sixth edition of the Future Projects Forum last week, which showcased 3,000 projects worth around $270 billion.

He said SCA is the current chair of the Federation of Contractors from Islamic Countries, which represents the construction sector of 26 Islamic countries.

The Cairo event was organized by the Egyptian Federation for Construction and Building Contractors in collaboration with the African Federation for Construction Contractors’ Association.

According to a report issued by the US-Saudi Business Council recently, contract values in the Kingdom’s construction sector reached SR71.5 million during the fourth quarter of 2022, accounting for 37 percent of the total contracts awarded last year.   

The report said the overall deals struck between October and December were the highest since the first quarter of 2015 when contract values touched SR88.1 billion.   

“The surge in contract awards continues unabated on the back of a growing economy that was fueled by significant oil revenues and the acceleration of giga-projects following the COVID-19 slowdown,” said Albara’a Alwazir, director of economic research at the USSBC.


Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO

Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO
Updated 23 min 49 sec ago

Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO

Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO

RIYADH: Saudi Arabia’s Vision 2030 blueprint will have a profound impact beyond the Kingdom as it improves connectivity between continents and enhances international trade, said a top official. 

Speaking at an event organized at the King Abdullah Petroleum Studies and Research Center on Tuesday, Suliman Al-Mazroua, CEO of the National Industrial Development and Logistics Program, said that the Kingdom had witnessed several monumental changes in its economy since the launch of Vision 2030. 

“Vision 2030 impacts are not limited to Saudi Arabia. Becoming an industrial powerhouse and a global logistics hub will open new possibilities for products and markets. It will also improve connectivity between continents and enhance international trade. Therefore, we continue to invite the international community to be part of our journey,” said Al-Mazroua. 

He added: “Since Vision 2030 was launched, we started to enjoy the fruits of it across all aspects of our lives. Foreign direct investments in Saudi Arabia doubled. Private sector contribution to the GDP (gross domestic product) doubled.” 

Highlighting the growth of Saudi Arabia in the transport sector, Al-Mazroua revealed that Saudi Arabia had jumped 17 places in the Logistics Performance Index released by the World Bank last April. 

The index showed Saudi Arabia reaching the 38th spot, excelling in performance efficiency through several sub-indicators, including logistics competence, tracking, timeliness, customs, infrastructure and international shipments indices. 

According to Al-Mazroua, Saudi Arabia’s National Logistics Strategy, launched by Crown Prince Mohammed bin Salman in 2021, is one of the key drivers behind this growth. 

The strategy aims to position the Kingdom as a global logistics hub connecting three continents and improve all transportation services while improving the capabilities of Saudi Arabia’s air cargo sector by doubling its capacity to more than 4.5 million tons by 2030. 

“The customs used to take 288 hours, and now it takes two hours. We are among the best when it comes to processing, both in and out of the country,” said Al-Mazroua. 

According to the NIDLP CEO, technology is one of the most crucial enablers of the goals outlined in Vision 2030. 

“When we look at the future, we know technology is our friend. We will have smart mines, supplying smart factories connected to smart industrial cities powered by smart grids, and move goods and people through smart logistics. Connecting the smart is the new smart,” he said. 

Al-Mazroua added: “Having the right data will help us to predict the future and improvise clean energy generation. Look at the history; the semiconductor challenge the world faced a few months ago. When we look at the data, it was predicted. If we had the right data at that time, we would predict this issue and solve it.” 

Al-Mazroua continued that NIDLP, with its various initiatives, is always trying to minimize the risk and maximize the returns for investors. 

“In NIDLP, we are always investor-centric. We cater to both international and local investors through the fundamentals of risk and return. We try our best to minimize the risk and maximize the return for the investors,” said Al-Mazroua. 
He further noted that NIDLP is committed to maximizing the returns of the investors sustainably. It is enabling regulations, creating digital infrastructure, ensuring the availability of resources, opening world-class research and development centers and providing access to local and international markets. 

The program is also keen on protecting the environment, facilitating global energy transition and creating a transport and logistics sector built for the long term, which is crucial to achieving these sustainable goals. 

Last year, during an interview with Arab News, Al-Mazroua opined that Saudi Arabia’s logistics sector needs a considerable investment combined between the government and private sector by the end of this decade to turn the Kingdom into a global logistics hub. 

He added that the Kingdom would provide the right environment and regulations to attract world transportation companies which would help Saudi Arabia emerge as one of the world’s busiest logistics centers. 


EVs to be at core of shift to green mobility, says UAE minister

EVs to be at core of shift to green mobility, says UAE minister
Updated 30 May 2023

EVs to be at core of shift to green mobility, says UAE minister

EVs to be at core of shift to green mobility, says UAE minister

RIYADH: Electric vehicles are set to be at the core of the shift to green mobility as reaching net-zero emissions has become a collective and urgent priority, according to the UAE’s minister of energy and infrastructure. 

Speaking at the second edition of the Electric Vehicles Innovation Summit organized at the Abu Dhabi National Exhibition Centre, Suhail bin Mohammed Al-Mazrouei said: “The EV market looks promising and offers unique investment opportunities. We invite future-thinking businesses to capitalize on these opportunities. Investing in the EV industry makes a perfect environmental and economic sense.” 

He said that the UAE is constantly offering incentives to make EVs more appealing to consumers. “To fully realize the potential of electric mobility, we are deploying a nationwide network of public and private charging stations, equipped with the latest innovative technologies to reduce charging time,” he informed. 

The three-day summit that ends on May 31 includes an extensive exhibition throughout the event. In addition, the exhibition space has been expanded, accommodating over 100 products, including vehicles and EV service providers. 

Additionally, EVIS2023 encompasses a two-day conference that has garnered significant attention, featuring more than 100 speakers and over 50 conference sessions covering a wide range of topics relevant to the current and future landscape of e-mobility. 

The summit aims to promote the transition from dependence on fossil fuels to electric mobility, which saves the planet from the environmental consequences of carbon dioxide and other emissions. 

Organized by the Abu Dhabi-based Nirvana Holding, the summit succeeded in attracting and bringing global interest to the Middle East and North Africa region, which is a promising market with significant growth and business opportunities in the coming years. 

The exhibition drew global household brands like Geely, Skywell, Tesla, BYD, Polyester, etc. More than 50 EVs worldwide are on display at the show. 

The event has also attracted global e-mobility service providers, like charging infrastructure and dealerships. 

A notable addition to this year’s edition is the Technology Park, an innovation hub showcasing the latest advancements in e-mobility. This dedicated area showcases the cutting-edge EV technologies developed by universities and technology incubators, shaping the industry’s future. 


Oil Updates — crude slips on US debt ceiling struggles

Oil Updates — crude slips on US debt ceiling struggles
Updated 30 May 2023

Oil Updates — crude slips on US debt ceiling struggles

Oil Updates — crude slips on US debt ceiling struggles

RIYADH: Oil prices fell on Tuesday, giving up earlier gains, as concerns about the viability of the US debt ceiling pact cooled the market’s risk-on sentiment and mixed messages from major producers have clouded the supply outlook ahead of their meeting this weekend. 

Brent crude futures fell 60 cents, or 0.78 percent, to $76.47 a barrel at 9:23 a.m. Saudi time, after rising by 0.5 percent earlier on Tuesday. 

US West Texas Intermediate crude dipped 37 cents to $72.30 a barrel, down 0.51 percent from Friday’s close. There was no settlement on Monday because of a US public holiday. 

Some hard-right Republican lawmakers said on Monday they might oppose a deal that would raise the debt ceiling in the US, the world’s biggest oil user, while Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy remained optimistic the deal will pass. 

Biden and McCarthy forged an agreement on the debt over the weekend, and it must pass a divided US Congress before June 5, the day the Treasury Department says the country will not be able to meet its financial obligations, which could disrupt financial markets. 

OPEC will welcome Iran’s return to oil market when sanctions lifted 

The Organization of the Petroleum Exporting Countries will welcome Iran’s full return to the oil market when sanctions are lifted, its secretary-general told the Iranian oil ministry’s news website SHANA on Monday. 

Iran is an OPEC member, although its oil exports are subject to US sanctions to curb Tehran’s nuclear program. 

Secretary-General Haitham Al-Ghais, who is visiting Tehran for the first time, added that Iran could bring on significant production volumes within a short period of time. 

“We believe that Iran is a responsible player among its family members, the countries in the OPEC group. I’m sure there will be good work together, in synchronization, to ensure that the market will remain balanced as OPEC has continued to do over the past many years,” SHANA’s website cited him as saying. 

Asked about OPEC’s voluntary production cut and its effect on oil prices, Al-Ghais said, “In OPEC ... we don’t target a certain price level. All our actions, all our decisions are made in order to have a good balance between global oil demand and global oil supply.” 

In a surprise move in early April, Saudi Arabia and other members of OPEC+, which comprises OPEC and allies including Russia, announced further oil output cuts of around 1.2 million barrels per day.  

Brazil’s Petrobras approves new commercial portfolio for natural gas 

Brazilian state-run oil company Petrobras on Monday announced a new commercial portfolio for natural gas, saying it was moving to include “diversified” deadlines, benchmarks and places of delivery to “ensure competitiveness.” 

Petroleo Brasileiro SA, as the firm is formally known, said it would resume using Henry Hub benchmark prices for gas in addition to Brent oil prices while offering distributors more options for contract deadlines and delivery locations. 

(With input from Reuters) 


Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt

Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt
Updated 30 May 2023

Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt

Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt

RIYADH: The Saudi-based Red Sea Global company held its second promotional procurement exhibition in Cairo, in cooperation with its media partner, MEED Network, and in the presence of representatives from more than 100 Egyptian companies from the private sector, the Saudi Press Agency reported on Monday.
The exhibition is the second of its kind in a series of local, regional and international introductory meetings conducted by the company, which is wholly owned by the Kingdom’s Public Investment Fund.
The event aims to establish more partnerships with the private sector to enable the delivery of the company’s growing portfolio of projects.
Ben Edwards, group head of cost, commercial and procurement at Red Sea Global, said the opportunity to present projects and opportunities available to the Egyptian market is a major strategic step for Red Sea International this year.
“To achieve the innovative approach that we seek, especially with regard to sustainability, we had to identify organizations and companies that share the same vision to establish real partnerships with them, and we met today with many future partners,” he added.
Red Sea Global is one of the companies with continuous progress in implementing projects for its “Red Sea” and “Amaala” destinations, and the twelve future projects in the company’s portfolio, SPA added.
In March, it held its first regional induction tour in Doha, where the company met with representatives from more than 100 Qatari companies.
The company has awarded contracts worth more than SR40 billion ($10.6 billion) for its “Red Sea” and “Amaala” destinations so far and this year, contracts worth SR5 billion were awarded, with an additional SR20 billion expected to be awarded before the end of the year.