Oil Updates – crude heads for 7th weekly loss as supply surplus, weak China demand weigh on market

Oil Updates – crude heads for 7th weekly loss as supply surplus, weak China demand weigh on market
Brent crude futures rose $1.29, or 1.7 percent, to $75.34 a barrel by 6:59 a.m. Saudi time. Shutterstock.
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Updated 08 December 2023

Oil Updates – crude heads for 7th weekly loss as supply surplus, weak China demand weigh on market

Oil Updates – crude heads for 7th weekly loss as supply surplus, weak China demand weigh on market

LONDON: Oil benchmarks were headed for a seventh straight weekly decline on worries over a global supply surplus and weak Chinese demand, although prices recovered ground on Friday after Saudi Arabia and Russia called for more members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to join output cuts, according to Reuters.

Brent crude futures rose $1.29, or 1.7 percent, to $75.34 a barrel by 6:59 a.m. Saudi time, while US West Texas Intermediate crude futures gained $1.11, or 1.6 percent, to $70.45 a barrel.

Both benchmarks slid to their lowest since late June in the previous session, a sign that many traders believe the market is oversupplied. Brent and WTI are also in contango, a market structure in which front-month prices trade at a discount to prices further out.

“Some short sellers closed their position as the oil market was seen oversold. Meanwhile, the plunging oil prices forced OPEC+ to improve solidarity to calm the market,” said analysts from Haitong Futures in a note.

Saudi Arabia and Russia, the world’s two biggest oil exporters, on Thursday called for all OPEC+ members to join an agreement on output cuts for the good of the global economy, only days after a meeting of the producers’ club.

The organization agreed to a combined 2.2 million barrels per day in output cuts for the first quarter of next year.

“Despite OPEC+ members’ pledges, we see total production from OPEC+ countries dropping by only 350,000 bpd from December 2023 into January 2024 (38.23 million bpd to 37.92 million bpd),” said Viktor Katona, lead crude analyst at Kpler.

Some of the OPEC+ countries may not adhere to their commitments due to muddied quota baselines and dependence on hydrocarbon revenues, Katona said.

Brent and WTI crude futures are on track to fall 4.5 percent and 4.8 percent for the week, respectively, their biggest losses in five weeks.

Concerns about China’s economy and surging US oil output have also fueled the market’s downturn this week.

Chinese customs data showed its crude oil imports in November fell 9 percent from a year earlier as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.

In India, fuel consumption in November fell after touching a four-month peak the previous month, hit by reduced travel in the world’s third-biggest oil consumer as a festive boost fizzled.

In the US output remained near record highs of more than 13 million bpd, US Energy Information Administration data showed on Wednesday. 

Saudi Arabia named ‘most improved country overall’ in US Chamber of Commerce IP Index

Saudi Arabia named ‘most improved country overall’ in US Chamber of Commerce IP Index
Updated 58 min 15 sec ago

Saudi Arabia named ‘most improved country overall’ in US Chamber of Commerce IP Index

Saudi Arabia named ‘most improved country overall’ in US Chamber of Commerce IP Index

RIYADH: Saudi Arabia has received recognition as “the most improved country overall” in the 12th edition of the US Chamber of Commerce International Intellectual Property Index. 

Released on March 2, the report emphasizes the several achievements of the Kingdom, with Vice President of Middle East Affairs at the US Chamber of Commerce Steve Lutes telling Arab News that Saudi Arabia has made significant strides in the technology sector over the past year.

“Specifically, I think this year the Kingdom did sign on to some important international treaties and they’ve made some other progress on both the enforcement side and some other of the indicators,” Lutes said on the sidelines of the LEAP 2024 conference.

“The Kingdom moving up in ranking gives more confidence to investors,” he added. 

Lutes went on to say that the body aims to encourage partnerships with the business community, government, and academia in Saudi Arabia to drive the establishment of a diversified, knowledge-based economy aligned with Vision 2030.

The US Chamber of Commerce considers over 50 indices when ranking countries, Lutes added. 

“Some of this looks very marginal. But really, when you think about it from an economic perspective, these are very important drivers because these are the sorts of things that companies look at. Is my IP going to be safe? Is it going to be protected? Are rules going to be enforced? And that’s where you get the investment in value and innovation,” said the vice-president.

The Kingdom allocates a total of $2 million across all funding rounds dedicated to artificial intelligence companies and over $3 billion proportional to gross domestic product with a ranking position of 31 in the Global AI index.

“We’ve been looking at this as governments around the globe start to grapple with the regulatory frameworks for artificial intelligence. The Chamber commissioned a report that was largely targeted toward a domestic audience and had some policy recommendations in that,” said Lutes.

A report by the European Centre for International Political Economy and the US Chamber of Commerce, titled “The Opportunity of Artificial Intelligence: Boosting Productivity and Growth in Saudi Arabia,” will be released in March.

The study will include a breakdown covering the benefits of AI for the Kingdom, endowments and digital industry structures, and AI policies going forward. 

“It has some sector-by-sector analysis where we think it can be the most impactful. In my mind, though, the biggest message is for policymakers,” Lutes said, adding: “One of those is investing, for example, in human capital. You have to have the workforce that’s ready to take on these technologies and bring it to government processes, to business processes and see it diffuse. So, when it comes to the sectors, I think, you know, healthcare and education are two that are highlighted in particular as having the most upside.”

Lutes added this is his first time attending LEAP, which is now in its third edition, and the Chamber has been collaborating with the Ministry of Communications and the Saudi Authority for Data and Artificial Intelligence. 

“We are at the LEAP Conference and IP is so fundamental to that. So, kudos to the Kingdom this year. And I guess our message is let’s not rest on our laurels. Let’s continue to work together to see if we can continue to see the Kingdom climb in that index as well,” he concluded. 

LEAP, held in Riyadh from March 4-7, is an annual premier tech event founded in 2022 by the Ministry of Communication and Information Technology. It convenes leading professionals from the sector to deliberate on the industry’s future and the innovative opportunities ahead.

Riyadh forum explores Saudi-Brazil business, trade ties

Riyadh forum explores Saudi-Brazil business, trade ties
Updated 04 March 2024

Riyadh forum explores Saudi-Brazil business, trade ties

Riyadh forum explores Saudi-Brazil business, trade ties
  • South American country ‘an important trading partner’ for the Kingdom, says envoy
  • Joint council launched after Brazilian president’s visit late last year

LONDON: The Saudi-Brazilian Business Forum in Riyadh was attended by more than 150 investors from both countries on Monday, the Saudi Press Agency reported.

The event, hosted by the Federation of Saudi Chambers and Brazil’s Lide Group, aimed to improve business and trade ties.

Dr. Faisal Ghulam, Saudi ambassador to Brazil, delivered a speech at the forum in which he praised the strong economic relations between the two countries built over 55 years.

He described Brazil as “an important trading partner” for the Kingdom. Annual trade between the two countries stands at $8 billion.

Ghulam lauded the establishment of a Saudi-Brazilian coordination council following President Lula da Silva’s visit to the Kingdom late last year.

Saudi Vision 2030 is providing Brazilian investors with significant opportunities, paving the way for improved trade ties, said Luiz Fernando Furlan, chairman of Lide’s board.

The newly established council will “work to advance the partnership, overcome challenges, and facilitate visas for the business communities from the two countries,” said its Chairman Mishal bin Hithlain.

Lide chief Joao Doria called on the Brazilian business community to explore the “great investment opportunities” available in the Kingdom through Vision 2030.

The forum covered key sectors at the heart of trade between the two countries, including aviation, energy, logistics, mining, agriculture, real estate and healthcare. It was the first event hosted by Lide after the firm opened offices in Riyadh.

The company’s Saudi representative, Malik Al-Qahtani, pledged to serve the business sectors of both countries and improve the ease of operations for Saudi and Brazilian investors.

Saudi aviation professions localization plan enters 2nd phase

Saudi aviation professions localization plan enters 2nd phase
Updated 04 March 2024

Saudi aviation professions localization plan enters 2nd phase

Saudi aviation professions localization plan enters 2nd phase

RIYADH: The number of Saudi flight attendants and fixed-wing pilots is set to increase as the localization plan for the Kingdom’s aviation sector enters its second phase.

The Ministry of Human Resources and Social Development, in collaboration with the Ministry of Transport and Logistic Services, has announced the implementation of the second phase of localizing licensed aviation professions in private sector establishments employing five or more individuals in targeted aviation professions.

In the second phase, the HRSD has specified the professions targeted, setting a 60 percent target for flight attendants and a 70 percent ratio for fixed-wing pilots, contingent on employees in the aviation professions obtaining the professional accreditation certificate from the General Authority of Civil Aviation.

The Ministry of Transport has reiterated its commitment to overseeing the implementation of the program’s second phase. It aims to enable private sector establishments to leverage all support and employment programs offered by the Human Resources and Social Development System to aid in the recruitment and retention of national talent.

The HRSD has issued procedural guidelines explaining the details of the decision, its implementation, and the support and employment programs provided to private sector establishments.

Speaking to Arab News on the sidelines of the Saudi Airport Exhibition, held at the Riyadh International Convention and Exhibition Center in December 2023, Mervat Sultan, president of the Women in Aviation Middle East Chapter, noted a significant boom, with an increase in airports, establishment of new airlines, and a rising number of tourists. 

She added that the aviation industry in Saudi Arabia is “becoming bigger and bigger and would be leading the industry in the next 20 years.”

In 2022, Ahmed Al-Rajhi, minister of HRSD, issued a notification nationalizing a number of professions and economic activities — including licensed aviation professions, opticians, and periodic inspection activity, as well as postal service outlets and more. 

The decision to localize licensed aviation professions was announced to be implemented in two phases. The first one became effective on March 15, 2023.

In line with its Vision 2030, Saudi Arabia is undertaking an ambitious initiative to empower its citizens and boost their global competitiveness. 

Closing Bell: Saudi main index slips to close at 12,434 

Closing Bell: Saudi main index slips to close at 12,434 
Updated 04 March 2024

Closing Bell: Saudi main index slips to close at 12,434 

Closing Bell: Saudi main index slips to close at 12,434 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Monday, losing 120.61 points, or 0.96 percent, to close at 12,434.59. 

The total trading turnover of the benchmark index was SR10.50 billion ($2.80 billion) as 43 of the listed stocks advanced, while 180 retreated.  

Similarly, the MSCI Tadawul Index decreased by 17.59 points, or 1.09 percent, to close at 1,592.03. 

Also, the Kingdom’s parallel market Nomu slipped, losing 515.71 points, or 1.91 percent, to close at 26,446.68. This comes as 16 of the listed stocks advanced, while 47 retreated. 

The best-performing stock of the day was Al-Baha Investment and Development Co., with an increase of 7.14 percent in its share price, reaching SR0.15. 

Other top performers include Saudi Steel Pipe Co. and ACWA Power, whose share prices soared by 5.74 percent and 5.41 percent, to stand at SR57.10 and SR276.80, respectively. 

In addition to this, other notable performers included Saudi Ceramic Co. and SAL Saudi Logistics Services Co. 

On the contrary, the day’s least favorable performer was Seera Group Holding, witnessing a 9.91 percent decline in its share price to SR29.55. 

Furthermore, Alkhaleej Training and Education Co. and AYYAN Investment Co. were among the weakest performers, experiencing drops of 9.88 percent and 7.56 percent, settling at SR33.75 and SR26.90, respectively. 

Moreover, other weak performers also included Mobile Telecommunication Co. Saudi Arabia and Maharah Human Resources Co. 

On the announcements front, Al Rajhi Bank disclosed its plan to issue sustainable sukuk in US dollars, as per its statement on Tadawul. The issuance, under the revised international sukuk program, will be facilitated through a special purpose company and extended to qualified investors globally. 

According to the statement, the value and terms of the sustainable sukuk offering will be determined based on market conditions, to meet the bank’s financial and strategic objectives within the framework of its sustainability financing. 

LEAP24 to witness $11.9bn tech investment deals, says minister

LEAP24 to witness $11.9bn tech investment deals, says minister
Updated 04 March 2024

LEAP24 to witness $11.9bn tech investment deals, says minister

LEAP24 to witness $11.9bn tech investment deals, says minister

RIYADH: Saudi Arabia’s international technology conference LEAP is set to witness $11.9 billion of investment deals over its three-day duration — eclipsing last year’s figure of $9 billion, according to a senior minister. 
During the opening remarks at the event, Minister of Communications and Information Technology Abdulla Al-Swaha highlighted that investments in generative artificial intelligence acceleration and cloud infrastructure sectors are set to be key benefactors from the funding blitz. 
The minister told those at the Riyadh-based gathering, which runs from March 4 to 7 and is the third edition of the event, that the Kingdom’s digital economy is “the most bold and audacious success story of the 21st century.” 
He added: “When it comes to resilience, while the whole world was facing headwinds when it comes to VC (venture capital) funding with negative 30 to 40 percent, the Kingdom, under His Royal Highness’s leadership, we adjusted the sail and changed the headwinds into tailwinds and we grew by 33 percent.” 
Al-Swaha highlighted a significant investment in regional cloud infrastructure in the preceding year, marking it as one of the sector’s most substantial and notable investments.  
Alongside this, he announced the introduction of Amazon Web Services in Saudi Arabia, establishing the Kingdom as the sole nation in the region hosting all key hyperscalers. 
Furthermore, AWS plans to establish an infrastructure region within the Kingdom by 2026, with the objective of providing support to developers, startups, entrepreneurs, and enterprises, as well as entities in healthcare, education, gaming, and nonprofit sectors. 
The minister also underlined the ongoing efforts, led by Crown Prince Mohammed bin Salman, and in collaboration with Saudi Aramco, to advance the diffusion of technologies and industries in the Kingdom. 
He announced Aramco’s largest industrial laboratory guidance model, METABRAIN, which aims to provide guidance and support to all industries in the Kingdom. 
“This LLM is powered by more than data — data for more than 90 years, with seven tokens of public and proprietary data. We aim to reach 1 trillion parameters by the end of today, starting with 250 parameters,” Al-Swaha stated.  
He continued: “Aramco is joining hands with one of the revolutionary technologies. I think it’s best to hear from the founders in this specific interview about how they’re doing that, aiming to build one of the largest AI inference capabilities for the industrial age.” 
In his keynote address, Aramco’s President and CEO Amin Nasser stressed his belief that METABRAIN will serve to increase productivity and growth as well as transform “the way we work.” 
Equipped with 90 years of exclusive data, the large language model is helping to analyze plans, get data as well as “historically drilling down cost and recommending options for downstream.” 
Last week, the energy giant announced a significant upward revision in the estimated reserves of gas and condensate in its Jafurah reserves. The CEO underscored that “this was made possible by combining advanced machine learning system together with the data gathered by our in-house experts.” 
During the event, Aramco also announced the establishment of the Saudi Accelerated Innovations Lab, or SAIL, a market-driven digital innovation engine with the first hub in Saudi Aramco and plans for national and global expansions. 
Commenting on this announcement, the CEO said: “Our goal is to create new digital products and digital ventures. An example is the Aramco IBM innovation strategic partnership, which through SAIL, is expected to be operational in early 2026.” 
According to the executive, Aramco and IBM will collaborate in areas such as cybersecurity, sustainability, circular economy, and material science. 
The global tech leader also unveiled plans for a software development lab to operate in Saudi Arabia. 
Arvind Krishna, chairman and CEO of IBM, said: “We have decided to open a software development lab where we are going to be harnessing the talent of the local population. We are going to build AI-based technologies here that we are then going to take into our global market. I think that is incredibly exciting.”  
As part of a series of announcements, Dell Technologies revealed plans to open a new merge and logistics fulfillment center, incorporating a second touch manufacturing facility in the Kingdom. 
The new center, based out of Riyadh, will handle all Dell product lines in Saudi Arabia, including notebooks, desktops, and servers, as well as, storage, and networking.  
Dell is also relocating its Flat Panel Monitor Hub to Riyadh, ensuring stocked inventory is delivered directly to customers with same-day or next-day shipments.  
The event also saw several announcements from international companies in the field of up-skilling, education, and training. 
Among them, UiPath, a global software company, announced the establishment of the “Saudi School of Automation,” the first in the region, aimed at training skills and nurturing Saudi talents.  
UiPath will cover automation fundamentals through advanced developments, culminating in a professional certificate. 
Similarly, an American cloud-scale company unveiled a partnership with the Saudi Digital Academy to establish a new academy in the Kingdom. 
Datadog’s Academy focuses on the latest trends and regional priorities, offering a range of programs, including certifications, in-person workshops, and online training, as highlighted by Alexis Le Quoc, the company’s CEO during the forum. 
Marking the third announcement of a new academy in the nation, ServiceNow’s CEO Bill McDermott revealed that the company will be opening a ‘ServiceNow Academy’ in the Kingdom. 
The institute aims to train thousands of Saudis in “digital skills related to this new generation platform,” he said.  
The company also emphasized that it will be launching its ServiceNow platform in Arabic later this month, featuring domain-specific LLMs capable of operating in the Arabic language.