Oil Updates — crude steady on lower US stocks 

Oil Updates — crude steady on lower US stocks 
September Brent futures climbed 6 cents, or 0.1 percent, at $79.52 a barrel at 9:45 a.m. Saudi time (Shutterstock)
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Updated 20 July 2023
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Oil Updates — crude steady on lower US stocks 

Oil Updates — crude steady on lower US stocks 

RIYADH: Oil prices were little changed on Thursday as a lower-than-expected drop in US crude inventories and a potentially weaker demand outlook kept investors cautious. 

September Brent futures climbed 6 cents, or 0.1 percent, at $79.52 a barrel at 9:45 a.m. Saudi time, while August US West Texas Intermediate crude CLc1 gained 5 cents, or 0.1 percent, to hit $75.40 a barrel. 

US crude stocks fall in latest week on exports: EIA 

US crude inventories fell last week, supported by a jump in crude exports as well as higher refinery utilization, the Energy Information Administration said on Wednesday. 

Sales of crude oil from the US Strategic Petroleum Reserves ended in the last week of June, tightening the market for crude oil globally. 

Inventories at the critical Cushing, Oklahoma, delivery hub, drew down 2.9 million barrels in the week ending July 14, EIA said, as net US crude exports rose by 1.67 million barrels per day to 3.81 million bpd. 

Crude inventories fell by 708,000 barrels in the last week to 457.4 million, compared with analysts’ expectations in a Reuters poll for a drop of 2.4 million barrels, the EIA data showed. 

Refinery utilization rates rose by six-tenths of a percentage point in the week, while refinery crude runs were down by 74,000 barrels per day in the last week, EIA said. 

Fuel stocks drew or remained stagnant week on week amid stronger demand for gasoline and distillate fuels. 

Gasoline product supplied, a proxy for demand, rose by about 100,000 bpd while distillate product supplied jumped by about 700,000 barrels per day, the EIA data showed. 

US gasoline stocks fell by 1.1 million barrels in the week to 218.4 million barrels, the EIA said, while distillate stockpiles, which include diesel and heating oil, rose by only 14,000 barrels in the week to 118.2 million barrels. 

China’s June imports of Russian crude jump to record 2.56m bpd 

China’s imports of crude oil from Russia hit an all-time high in June, Chinese government data showed on Thursday, with refiners continuing to snap up discounted Russian ESPO even as discounts against international benchmarks narrow. 

Arrivals from Russia totaled 10.50 million tons in June, or 2.56 million bpd, according to data from the General Administration of Customs. 

Shipments from Saudi Arabia, which has in recent months been China’s second largest crude supplier, totaled 7.92 million tons last month, equivalent to 1.93 million bpd. 

(With input from Reuters)  


QatarEnergy to further boost LNG production from North Field 

QatarEnergy to further boost LNG production from North Field 
Updated 7 sec ago
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QatarEnergy to further boost LNG production from North Field 

QatarEnergy to further boost LNG production from North Field 

DOHA: QatarEnergy chief Saad al-Kaabi announced on Sunday a new expansion of its liquefied natural gas production that will add a further 16 million tonnes per annum to existing expansion plans, bringing total capacity to 142 mtpa. 

With this added boost, the overall expansion of the North Field from 77 mtpa currently to 142 mtpa by 2030 represents an increase of 85 perecnt in production, Kaabi said at a press conference in Doha. 

Qatar is among the world’s top exporters of LNG, competition for which has ramped up since the beginning of the war in Ukraine in February 2022. 

This latest expansion may not be the last for the energy giant as Kaabi said appraisal of Qatari gas reservoirs would continue and production would be further expanded if there is a market need. 

State-owned QatarEnergy has already signed a string of supply deals with European and Asian partners in its massive North Field expansion project, which was expected — prior to Sunday's announcement — to produce 126 million mtpa of LNG per annum by 2027, from the current 77 mtpa. 

Exploration activities in the west of North Field prompted the company’s decision to expand further. 

Kaabi did not give a cost for the project but said it would be in the billions of dollars. 

“It is difficult to give you a number now for the cost of the expansion, but it is certainly in billions,” he said. 

“We will start preliminary engineering studies for the project and then at the right time we will announce how much is the cost when the project is settled.” 

In December, Kaabi told Reuters that QatarEnergy had been drilling wells to assess expansion opportunities beyond the North Field East and North Field South phases. 

This latest expansion will require the construction of two LNG trains, in addition to six already underway for the earlier expansions dubbed North Field East and North Field South. 

The North Field is part of the world’s largest gas field which Qatar shares with Iran, which calls its share South Pars. 

GAS MARKETS 

Kaabi said global markets still need more gas even after this further expansion saying that Asian market growth was driven by population growth and European markets would still need gas for a “long time” despite the energy transition. 

The Qatari announcement comes as US gas prices trade near an all-time low if adjusted to inflation after a decade of meteoric rise in output which made the US one of the top oil and gas exporters. 

Prices of gas in Europe also fell steeply despite a drop in Russia supplies after the US and Qatar helped replace lost volumes. 

Despite the price drop all major gas producers including the US, Australia and Russia want to further increase output betting on a further demand growth and worries that their gas might not be needed decades from now if energy transition makes green energy cheaper. 


Egypt’s GDP growth projected at 5.1% by 2026 despite challenges: OECD  

Egypt’s GDP growth projected at 5.1% by 2026 despite challenges: OECD  
Updated 31 min 21 sec ago
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Egypt’s GDP growth projected at 5.1% by 2026 despite challenges: OECD  

Egypt’s GDP growth projected at 5.1% by 2026 despite challenges: OECD  

RIYADH: Egypt’s gross domestic product is expected to gradually increase to 5.1 percent by 2025 and 2026, driven by growing consumption, according to a report.  

In a recent release by the Organization for Economic Co-operation and Development, Egypt’s economic growth is projected to face challenges amidst soaring inflation rates, necessitating urgent reform efforts to revitalize the private sector and attract investment. 

According to the OECD’s inaugural Economic Survey of Egypt, the country’s GDP growth is set to ease to 3.2 percent in fiscal year 2023-24 before increasing gradually to 5.1 percent by fiscal year 2025-26. 

“Growth is expected to be driven by growing consumption, provided inflation subsides and despite the gradual withdrawal of fiscal support,” the report stated. 

It added that the investment will stay weak as long as financing conditions remain tight in the continuing fight against inflation. At the same time, export growth is expected to increase if geopolitical tensions in the region recede. 

OECD Secretary-General Mathias Cormann underscored the urgency of controlling inflation to stimulate consumption and foster growth, saying: “Bringing inflation under control is now a key near-term priority to spur consumption and strengthen growth. Monetary policy needs to remain restrictive until inflation comes back to target.” 

He added: “A comprehensive consolidation strategy is needed to improve investor confidence in public finances and ease financing conditions. Stepping up structural reform efforts, building on previous reforms, to reinvigorate private sector activity and investment by removing administrative barriers, ensuring a level-playing field between private and state-owned companies and stepping up the fight against corruption will help boost productivity and long-term growth.” 

Despite initially weathering the storm of the COVID-19 pandemic and global food price hikes better than neighboring countries, Egypt has faced a setback, with domestic inflation soaring to record levels of 40.4 percent in September 2023, compared to 15.3 percent a year earlier.  

The analysis said that this surge in inflation has adversely affected consumption, weakened the domestic currency, and dampened investment, consequently leading to a slowdown in growth. 

Fiscal support measures, including targeted cash-transfer programs, have relieved the most vulnerable segments of society.  

However, businesses have been grappling with rising interest rates and limited access to foreign currency, hampering economic activity. While inflation has started to decline gradually, standing at 31.2 percent in January 2024, challenges persist in restoring stability. 

The report urged the government to address significant financing needs, indicating that despite targeting a 2.5 percent GDP primary budget surplus in the 2023-24 budget, the overall deficit will stand at -7.5 percent due to high-interest payments.  

International market funding has been limited since early 2022 when increased volatility in global financial markets led to strong capital outflows. “Restoring investor confidence in public finances is essential to attract international capital and bring down debt service costs,” the study added. 

Egypt’s vulnerability to climate change was also addressed in the report, with an urge to accelerate efforts toward mitigation and adaptation measures. Gradual reduction of untargeted energy subsidies was recommended to alleviate emissions and the budget deficit. 

The report emphasized the role of private investment and international support in advancing climate-related financing and facilitating the green transition. 

In conclusion, the OECD study underscored the need for concerted efforts to address Egypt’s economic challenges.  

By implementing comprehensive reforms and fostering a conducive environment for private sector growth, Egypt can navigate the current slowdown and pave the way for sustained economic prosperity.


Saudi Arabia unveils major gas discovery in Jafurah Field: Ministry of Energy 

Saudi Arabia unveils major gas discovery in Jafurah Field: Ministry of Energy 
Updated 13 min 11 sec ago
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Saudi Arabia unveils major gas discovery in Jafurah Field: Ministry of Energy 

Saudi Arabia unveils major gas discovery in Jafurah Field: Ministry of Energy 

RIYADH: Saudi Arabian Oil Co. has discovered an additional 15 trillion standard cubic feet of gas in the Kingdom’s Jafurah Field. 

According to a press statement from the Ministry of Energy, the discovery also includes 2 billion barrels of condensate. 

With the latest discovery, the quantity of resources in the field has become 229 trillion standard cubic feet of gas and 75 billion barrels of condensate, the ministry added in the press statement, citing the Kingdom’s Energy Minister Prince Abdulaziz bin Salman. 

This discovery made by the energy giant, also known as Saudi Aramco, was a result of applying the highest international standards in estimating and developing hydrocarbon resources to ensure their proper exploitation, the statement added.  

In November 2023, the Ministry of Energy announced that Saudi Aramco had discovered two new gas fields in the Eastern Province and the Empty Quarter respectively. 

In a press statement, the ministry said the first discovery occurred at the Hanifa reservoir in the Al-Hiran-1 well.  

It reported that the field was discovered after gas flowed at a rate of 30 million scf per day from the said reservoir, along with 1,600 barrels of condensate.  

The second discovery was made at the Al-Mahakek-2 well, where the natural resource flowed at 0.85 million scf per day. 

The ministry added that gas was also discovered in five other reservoirs in previously discovered fields, including the Jalla reservoir in the Assekra field, where gas flowed at a rate of 46 million scf per day.  

In November, Saudi Aramco also began the production of unconventional tight gas from its South Ghawar operational area, two months ahead of its schedule. 

Unconventional tight gas, also known as shale gas, is typically found in reserves where hydrocarbons are tightly trapped within rock layers.  

Extracting this resource demands specialized techniques like horizontal drilling and hydraulic fracturing. 

The commissioned facilities at South Ghawar currently have a processing capacity of 300 million scf per day for raw gas and 38,000 barrels per day for condensate. 

Earlier in February, speaking at the International Petroleum Technology Conference in Dhahran, Amin H. Nasser, CEO of Saudi Aramco, said that the company is eyeing continuity in the production of all types of energy, including oil and gas, along with renewables.  

He also added that Aramco has the full capability to grow in any sector to create profitable companies. 


Startup of the Week – supply chain platform Omniful aims to boost Saudi Arabia’s e-commerce space

Startup of the Week – supply chain platform Omniful aims to boost Saudi Arabia’s e-commerce space
Updated 24 February 2024
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Startup of the Week – supply chain platform Omniful aims to boost Saudi Arabia’s e-commerce space

Startup of the Week – supply chain platform Omniful aims to boost Saudi Arabia’s e-commerce space
  • CEO addresses market challenges and evolving customer expectations

CAIRO: E-commerce and supply chain operations platform Omniful is aiming to significantly boost its presence in the Saudi market after a successful $5.85 million seed funding round.

In an interview with Arab News, CEO and co-founder of Omniful, Mostafa Abolnasr, shared the company’s strategies aimed to boost Saudi Arabia’s e-commerce space.

“Following our recent seed funding round, we plan to scale our operations, expanding our market presence in Saudi Arabia and internationally, and continuing to aggressively invest in technology development,” Abolnasr said.

“This includes enhancing our platform’s capabilities, entering new strategic partnerships, and further tailoring our solutions to meet the specific needs of diverse markets,” he added.

FASTFACT

Mostafa Abolnasr aspires for his company to become a globally recognized technology vendor originating from the region, addressing local and global market challenges while contributing to the ecosystem.

Abolnasr detailed the company’s strategic positioning within the Saudi e-commerce market, emphasizing its focus on being a key enabler for the sector “with features tailored to local business practices, regulatory requirements, and consumer preferences.”

He added: “For example, we are the first Order Management System to combine sales channels like Salla, Zid, Jahez, PIK, Amazon, Noon, ToYou and others - all selling from the same inventory on the store shelves.”

On the topic of strategic partnerships, Abolnasr shared that while specific collaborations remain confidential, Omniful actively engages with both private and public entities in Saudi Arabia.

These partnerships aim to align Omniful’s operations with the national e-commerce strategy, enhancing the overall ecosystem and supporting the company's expansion plans.

Addressing market challenges and evolving customer expectations, Abolnasr stated that Omniful prioritizes innovation based on first-principle analysis, focusing on long-lasting solutions that address fundamental pain points within the supply chain and e-commerce sectors.

Regarding international expansion, Abolnasr revealed that Omniful already serves clients across various regions, including the US, Europe, Africa, Turkiye, and the Gulf Cooperation Council.  

Omniful’s partnerships aim to align its operations with the Kingdom’s national e-commerce strategy. (Supplied)

“These came mostly through referrals, partnerships, conferences and inbound - since until today, we have not yet activated our marketing and outreach efforts for international expansion, as we are planning a launch in strategic markets across the Middle East and North Africa region, and internationally,” he stated.

“An attractive market for us is one that is rapidly expanding e-commerce penetration, and combined with a lot of supply chain and operational challenges - a formula that breeds the need for a sophisticated suite of solutions like ours,” added the CEO.

Abolnasr’s vision for Omniful aligns with the anticipated growth of e-commerce both in Saudi Arabia and globally.  

He aspires for his company to become a globally recognized technology vendor originating from the region, addressing local and global market challenges while contributing to the ecosystem.

To maintain its competitive edge, Omniful relies on its proprietary technology and strong engineering capabilities, drawing talent from leading companies to build Software-as-a-Service products.  

“We plan to double-down on this and make sure that tech continues to be our competitive edge by investing in research and development, fostering a culture of innovation, and staying responsive to customer needs and industry trends,” Abolnasr said.

“We are also enhancing our platform with AI, machine learning, and other emerging technologies to deliver unparalleled efficiency and value to our clients in different use-case across inventory optimization, allocation, and demand forecasting,” he added.

Founded in 2022 by Abolnasr and Alankrit Nishad, Omniful provides merchants and fulfilment providers with a unified management system, warehouse management system, and transport management system to scale their businesses.

Abolnasr described the company’s role in transforming the omnichannel and e-commerce supply chain and operations landscape, highlighting  Omniful’s cloud-native, end-to-end platform, which integrates order, warehouse, and transport management systems functionalities.

“Omniful targets critical and common pain points such as inventory mismanagement, inefficiencies in order processing, lack of real-time data integration across sales channels, and the complexities of managing multiple fulfillment hubs be it stores or warehouses and shipping partners,” Abolnasr told Arab News.

“By providing a unified platform, we address these challenges directly, reducing fulfillment delays, minimizing operational costs, increasing real-time visibility and improving overall customer satisfaction,” he added.

Omniful’s strategy starts with real-time inventory management that spans multiple sales channels, effectively coordinating across various stores and warehouses.

The platform is designed to integrate seamlessly with existing enterprise resource planning and point of sale systems, ensuring updates are timely and accurate.  

Abolnasr further highlighted the functionality of the company’s order management system, which automates the routing, assignment, and tracking of orders.  

He also pointed out the agility of its warehouse management system, tailored for high-volume throughput optimization, and shipping and fulfillment automation rules that facilitate smooth courier selection and tracking.

These capabilities, according to Abolnasr, are key to ensuring timely and complete order delivery, maintaining precise inventory levels, and significantly improving the shopping experience for both businesses and consumers.

The shared frustrations the founders had with the lack of scalable, efficient, and modular platforms in the market led them to create Omniful.  

Abolnasr explained that their aim was to develop the world’s premier supply chain platform, offering adaptable solutions to meet the specific needs of businesses navigating the dynamic terrain of supply chain, e-commerce, and omnichannel operations.

Abolnasr shed light on the significant trends influencing the future of e-commerce logistics and fulfillment, emphasizing the shift towards omnichannel retail and the increasing consumer demand for fast, same-day delivery.  

He highlighted the critical role of artificial intelligence and machine learning in driving predictive analytics and optimization, alongside the necessity for businesses to diversify sales channels and enhance their merchandising and demand generation efforts.

“These technologies enable inventory optimization, efficient picking routes, predictive analytics, demand forecasting, intelligent routing, shipping courier selection, and warehouse space utilization, leading to increased efficiency, reduced costs, and improved customer experiences,” he stated.

Abolnasr elaborated on Omniful’s strategic growth and its alignment with the broader digital transformation and economic diversification efforts within Saudi Arabia.  

“Our focus remains on supply chain and e-commerce operations, which puts a lot of confidence in the e-commerce sector’s potential and underscores our commitment to supporting the region’s vision for a technologically advanced and economically vibrant e-commerce ecosystem,” he said.

 

 


Saudi Arabia seeing rising interest in credit ratings amid broader investments and economy diversification: Moody’s exec

Saudi Arabia seeing rising interest in credit ratings amid broader investments and economy diversification: Moody’s exec
Updated 24 February 2024
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Saudi Arabia seeing rising interest in credit ratings amid broader investments and economy diversification: Moody’s exec

Saudi Arabia seeing rising interest in credit ratings amid broader investments and economy diversification: Moody’s exec
  • Moody’s activities in the Kingdom have positioned the organization as a key player in the financial markets

RIYADH: Saudi Arabia is seeing a growing interest in credit ratings, mainly driven by expanding global investments, regulatory reforms, and economic diversification, according to Moody’s.

Jihad Al-Toukhi, senior vice president and relationship manager at Moody’s Saudi Arabia, affirmed in an interview with Arab News that the firm has “indeed observed a growing interest in credit ratings” in the Kingdom. 

Al-Toukhi pointed out that this heightened interest can be attributed to various factors. 

“Firstly, the ongoing financial market development, as part of Saudi Arabia’s Vision 2030 plans, has boosted the demand for credit ratings. These ratings provide an independent assessment of credit risk, which is crucial for facilitating investment decisions, including foreign direct investment,” he said. 

Moreover, as Saudi companies aim to expand their presence globally, their reliance on financing through debt capital markets has grown. Consequently, credit ratings have become indispensable in providing unbiased assessments of risk, vital for potential international investors or lenders, according to the official. 

Al-Toukhi went on to explain: “Regulatory bodies in Saudi Arabia are increasingly requiring credit ratings for certain types of financial transactions to enhance transparency and understanding of credit risk. This regulatory change has, in turn, increased the demand for credit rating services.” 

Furthermore, with the Kingdom’s shift away from oil-dependency, new sectors and businesses are emerging, all of which require credit ratings to secure funding and entice investors. Al-Toukhi emphasized Moody’s role, describing it as being “instrumental in cultivating a credit rating culture in the region.” 

He added: “Our role is to provide independent, objective opinions and analysis of credit risk, which are essential for the financial market development, international investments, regulatory compliance, and economic diversification efforts currently underway in Saudi Arabia.”

Discussing industries that have seen significant developments in terms of credit ratings, Al-Toukhi noted: “We have observed a substantial interest from the insurance sector and large corporates in obtaining credit ratings.”

Acknowledging the importance of Islamic finance in the local economy, Al-Toukhi remarked: “Islamic finance is indeed a significant component of the Saudi financial system, and Saudi Arabia is recognized as the world’s largest Islamic finance market.”

Jihad Al-Toukhi, senior vice president relationship manager at Moody’s Saudi Arabia. (Supplied)

“Our approach to assessing Islamic financial instruments is thorough and meticulous. Our expert analysts provide valuable ratings for Sukuk issuances based on thorough analysis,” he stated.

Looking ahead to 2024, the expert anticipated a “continued expansion and development of this segment in KSA and the region.”

Al-Toukhi anticipated that the increased role of government-related institutions and the private sector in Saudi Arabia’s financial environment is expected to have a “transformative impact.”

He further explained: “Firstly, it demonstrates a diversification of the Saudi economy, which has traditionally been heavily reliant on oil revenues. Secondly, the involvement of government-related institutions can provide a level of stability and confidence in the market.”

Al-Toukhi pointed out that the increased participation of the private sector can lead to increased competition, which can result in better pricing and more efficient allocation of resources.

“Lastly, the increased activity in the debt capital market can lead to greater liquidity, making it easier for both companies and investors to buy and sell securities,” Al-Toukhi concluded, highlighting the potential benefits of increased activity in the debt capital market.

Speaking of Moody’s plans, the senior vice president shared that a number of strategic initiatives are in place to further enhance presence and influence in the Kingdom’s financial markets. “One of our key strategic initiatives is to increase our educational endeavors,” he explained.

“In addition to our educational initiatives, Moody’s also plans to leverage technology to improve our services and operations,” Al-Toukhi added.

Moody’s believes that several factors will play a crucial role in shaping the credit landscape in the coming years.

“Saudi Arabia is becoming more transparent in its financial dealings, thanks to the efforts of regulators to improve and stimulate the debt markets,” Al-Toukhi explained, highlighting the efforts to improve transparency in financial dealings.

He emphasized the growth of the firm’s local footprint since the inception of its office, saying: “Since opening the Moody’s office in Saudi Arabia in 2018, we have had tremendous success in expanding our local presence and coverage. We now have 39 entity ratings in the Kingdom and rate $200 billion of debt.”

Moody’s activities in the Kingdom have positioned the organization as a key player in the financial markets, and specifically in the debt capital market, supporting the country’s economic transformation and growth. (AN file photo)

The thriving financial landscape in Saudi Arabia is boosting investor confidence and market maturity, Al-Toukhi affirmed, saying: “Being on-ground in Saudi Arabia has allowed Moody’s to better cater to the specific needs of the local market. This has helped in building stronger relationships with clients and stakeholders within the country.”

Al-Toukhi said that Moody’s has contributed to enhancing financial literacy and the understanding of credit ratings among investors, businesses, and the general public in Saudi Arabia through various publications, forums, and conferences.

He stated: “We are also actively engaging with local regulatory bodies ensuring we stay up to date with the evolving regulatory landscape in the Saudi financial markets, which we are happy to do.”

Moody’s activities in the Kingdom have positioned the organization as a key player in the financial markets, and specifically in the debt capital market, supporting the country’s economic transformation and growth, according to the top official.

Discussing the extensive ratings coverage in Saudi Arabia, Al-Toukhi underscored the agency’s comprehensive analysis, covering 100 percent of all Islamic and conventional banks and major corporations like Saudi oil giant Aramco and petrochemicals manufacturer Sabic.

“In fact, we have the highest coverage in Saudi Arabia across both corporate finance and financial institutions. This broad and deep coverage enables our analysts to provide a more comprehensive and accurate analysis of the creditworthiness of entities,” he remarked, emphasizing the breadth and depth of Moody’s coverage in the Kingdom.

As the Saudi economy diversifies away from oil, the firm anticipates growth in sectors like technology, renewable energy, and tourism.

“One significant development we are observing is the growing awareness and integration of Environmental, Social, and Governance factors into investment decisions,” said Al-Toukhi.

According to the official, Moody’s has been offering Second-Party Opinions on the environmental credentials of financial instruments such as green, social, and sustainability bonds.

“Overall, we believe these factors will play a significant role in shaping the credit landscape in Saudi Arabia in the coming years,” Al-Toukhi said, expressing optimism about the future of the credit landscape in the Kingdom.