Oil Updates – crude set for weekly gain on US economic growth, Mideast supply concerns

Oil Updates – crude set for weekly gain on US economic growth, Mideast supply concerns
Brent crude futures were down 38 cents, or 0.46 percent, to $82.05 a barrel by 7:45 a.m. Saudi time. Shutterstock
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Updated 26 January 2024
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Oil Updates – crude set for weekly gain on US economic growth, Mideast supply concerns

Oil Updates – crude set for weekly gain on US economic growth, Mideast supply concerns

HOUSTON/BEIJING: Oil prices eased on Friday after rising to their highest since December in the previous session, but were set for their biggest weekly gain since October as positive US economic growth and signs of Chinese stimulus boosted fuel demand sentiment, according to Reuters.

Brent crude futures were down 38 cents, or 0.46 percent, to $82.05 a barrel by 7:45 a.m. Saudi time. US West Texas Intermediate crude fell 50 cents, or 0.65 percent, to $76.86.

The Brent benchmark was set to close 4.5 percent higher for the week, while the US benchmark was set to rise 4.8 percent. Both were on track for their second straight week of gains and the biggest weekly increase since the week ending Oct. 13 after the start of the Israel-Hamas conflict in Gaza.

Prices slipped somewhat on Friday on signs that oil supply disruptions in the Red Sea may ease as China is pressuring Iran to curb attacks on shipping in the waters off Yemen by the Iran-aligned Houthi militia that the group started in retaliation to Israel’s Gaza attacks.

Chinese officials have asked their Iranian counterparts to help rein in the attacks or risk harming business relations with Beijing, sources said.

However, the Houthis are vowing to continue targeting ships linked to Israel until aid reaches Palestinians in Gaza, the group’s leader said on Thursday.

Previous interventions by US and UK forces in the Red Sea had not prevented attacks, leading investors to price in continued disruption, said Yeap Jun Rong, a market strategist at IG in Singapore.

Those disruption concerns are evident in the market structure of Brent futures. The premium of the first-month Brent future to the sixth-month contract rose to $2.53 per barrel, the highest since November.

This market structure, known as backwardation, when prompt prices are higher than later prices indicates traders are expecting supply tightness and stronger demand.

Demand sentiment improved after data on Thursday showed the economy of the US, the world’s biggest oil consumer expanded more quickly than expected in the fourth quarter.

Also, China, the world’s second-largest oil consumer, announced a deep cut to bank reserves to spur economic growth.

Driven by technical factors, oil markets had entered a “short-term uptrend phase,” said Kelvin Wong, a markets analyst at OANDA in Singapore.

Prices saw “further positive momentum follow-through after more liquidity easing from China’s central bank,” Wong added.

Oil was also boosted this week by a larger-than-expected draw in crude stockpiles, and of fuel supply disruption after a Ukrainian drone attack on an export-oriented oil refinery in southern Russia.


Saudi Arabia launches new program to boost wheat, barley productivity 

Saudi Arabia launches new program to boost wheat, barley productivity 
Updated 6 sec ago
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Saudi Arabia launches new program to boost wheat, barley productivity 

Saudi Arabia launches new program to boost wheat, barley productivity 

RIYADH: Saudi Arabia’s wheat and barley production is set to strengthen, thanks to a new program aimed at inventorying 903 plant genetic resources from fruit trees.

The process of PGR entails collecting and documenting the genetic material of plants valuable for both present and future generations. 

It is integral to agro-biodiversity, covering crops, livestock, and related species, and serves as the cornerstone of food, agriculture, and nutritional security.

Launched by the Kingdom’s Ministry of Environment, Water and Agriculture, the implementation of the new program is based on three axes, according to a statement.

The first includes inventory, purification, and evaluation of local varieties, while the second entails cooperation with international bodies. Meanwhile, the third axis includes implementing a regional breeding program.

This move falls in line with the ministry’s vision to achieve sustainability of the environment and natural resources, ensuring water security, contributing to food protection, and improving the quality of life in the Kingdom.


Renewable energy continues to gain momentum in Saudi Arabia, says report

Renewable energy continues to gain momentum in Saudi Arabia, says report
Updated 6 min 18 sec ago
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Renewable energy continues to gain momentum in Saudi Arabia, says report

Renewable energy continues to gain momentum in Saudi Arabia, says report
  • Kingdom makes significant strides in sustainability journey with effective green policies: report

RIYADH: Saudi Arabia could achieve its 2030 renewable target of 130 gigawatts by strengthening existing green policies and ensuring their effective implementation, a new study showed.  

According to a report by the data consulting company GlobalData, the growth of renewable energy sources in Saudi Arabia has gained pace recently as the Kingdom eyes ensuring a secure power supply for the future. 

The London-based firm highlighted that the country has made significant strides in its sustainability journey, with the Kingdom adding 2.1 GW of renewable power capacity since 2022. 

“Introduced in 2016, the Saudi Arabia Vision 2030 had an initial target of deploying 9.5 GW of green energy by 2030. Since inception, it has undergone many revisions, with the latest being made in 2023, revising the target to 130 GW of renewable power capacity by 2030,” said GlobalData.  

It added: “With the strengthening of policies, a consistent call for competitive auctions, and other financial measures, the Kingdom can meet its 2030 renewable energy target.”  

The report added that the abundance of sunlight and wind resources makes solar and wind power the key renewable technologies for the Kingdom in the future.  

According to GlobalData, Saudi Arabia’s renewable power capacity has increased at a compound annual growth rate of 82.4 percent from 0.02 GW to 3 GW from 2015 to 2023.  

In 2023, solar energy constituted 82.6 percent of the total green power capacity of Saudi Arabia, followed by onshore wind accounting for nearly 14.1 percent and thermal accounting for 3.1 percent share.  

The report also revealed that the share of renewable power capacity in Saudi Arabia’s total energy mix is estimated to reach 35.4 percent in 2035 from 3.2 percent in 2023.  

“With persistent efforts by the policymakers and strict policy implementation, the Kingdom has a good chance of reaching close to its set target. As per the expected trend, the country would add over 20 GW every year making its target plausible,” added the report.  

Speaking at the Future Minerals Forum in January, Saudi Arabia’s Minister of Economy and Planning Faisal Al-Ibrahim had expressed his confidence that the Kingdom would derive 50 percent of its energy needs from renewable sources by 2030.  

“This is the time to try to think sustainably and environmentally without affecting certain local communities,” said the minister at the time.  

In March, a report by the International Renewable Energy Agency said that renewable energy capacity in the Middle East reached 35.54 GW by the end of 2023, with Saudi Arabia accounting for 2.68 GW. 

In the same month, Saudi Arabia launched the Green Finance Framework aimed at enhancing public and private participation in climate financing.  

The initiative launched by the Ministry of Finance is expected to help the Kingdom achieve its net-zero targets by 2060, along with reducing emissions through a circular carbon economy, the Saudi Press Agency reported. 


Masdar City to lead $1.08bn innovation drive in energy and AI: CEO 

Masdar City to lead $1.08bn innovation drive in energy and AI: CEO 
Updated 36 min 6 sec ago
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Masdar City to lead $1.08bn innovation drive in energy and AI: CEO 

Masdar City to lead $1.08bn innovation drive in energy and AI: CEO 

RIYADH: Abu Dhabi’s Masdar City is gearing up to deliver energy and artificial intelligence projects with 4 billion dirhams ($1.08 billion) in investments, according to its CEO.

In an interview with the Emirates News Agency on the sidelines of the World Future Energy Summit in Abu Dhabi, Ahmed Baghoum unveiled ambitious plans for the development.

The conference, hosted by Abu Dhabi Future Energy Co., also known as Masdar, is taking place from April 16 to 18, bringing together global experts to devise sustainable solutions for tomorrow.

Baghoum said there are projects under the design phase with an investment cost ranging between 3 to 4 billion dirhams that target critical sectors like energy, artificial intelligence, and space, as well as life sciences and agriculture, according to WAM.

The CEO also outlined the current landscape of development at Masdar City. The ongoing construction projects, valued at approximately 1 billion dirhams, include the iconic Masdar City Complex and The Link, set to be completed by mid-2025.

According to Masdar City, The Link is an innovative 30,000 sq. m. development featuring the region’s first net-zero energy shared working and living facility.

“The Link will model a new kind of sustainable community by connecting shared working and living space with other elements of a thriving neighborhood, including places to shop, play, and relax, and local transportation,” the CEO said in a press release earlier last year.

He pointed out that it serves as a vital element in Masdar City’s blueprint for sustainable urban development.

Highlighting the strategic focus of Masdar City, Baghoum emphasized to WAM the significance of vital sectors, including energy and AI for Abu Dhabi and the broader UAE. 

The CEO also underscored the commitment to bolstering these industries by attracting top talent and fostering partnerships and discussed ongoing talks with foreign companies interested in relocating and setting up their research centers in Masdar City.

Additionally, Baghoum outlined the attractive incentives for companies considering relocation to Masdar City, saying: “Masdar City is a world-class business and technology hub, operating at the highest international standards. It offers companies a compelling package of advantages and incentives, including full foreign ownership, exemption from income tax, and unrestricted currency exchange.”


Egypt’s finance minister says cutting inflation is priority

Egypt’s finance minister says cutting inflation is priority
Updated 17 April 2024
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Egypt’s finance minister says cutting inflation is priority

Egypt’s finance minister says cutting inflation is priority

CAIRO: The Egyptian government’s main priority is to reduce inflation to within the central bank’s target, Finance Minister Mohamed Maait said on Tuesday, adding that economic growth was expected to rise in the financial year starting in July to 4.2 percent, from 2.8 percent this year, according to Reuters.

Maait also said the government aimed to sell more state assets, which would reduce the state’s role in the economy, allow the private sector more ownership, increase productivity and generate revenue to reduce Egypt’s debt.

Egypt’s economy has been hurt over the last half year by the crisis in Gaza, which has slowed tourism growth and cut into Suez Canal revenue, two of the country’s biggest sources of foreign currency.

Revenue from the waterway has fallen by more than 60 percent, Maait said, speaking during the IMF Governor Talks series in Washington.

The challenges prompted the IMF to expand financial support to Egypt to $8 billion, while Egypt sharply devalued its currency, made its latest pledge to move to a flexible exchange rate, and struck a record $35 billion investment deal with a UAE sovereign wealth fund.

Inflation dipped to 33.3 percent in March from a record 38 percent in September, far higher than the central bank’s long-standing target of between 5 percent and 9 percent.

Egypt generated growth over the last decade by financing giant state projects, including a new $58 billion capital in the desert, through a borrowing spree abroad that quadrupled its foreign debt.

The government hopes to lower interest rates to reduce interest payments on debt, Maait said. The central bank so far this year has raised its overnight interest rates by 800 basis points.

The government has put a limit of 1 trillion Egyptian pounds ($20.6 billion) on all public investment, including that of the military, Maait said. The private sector should make up at least 65-70 percent of the economy, he added.

“Giving the main role to the private sector to lead the country is in the benefit of the state. Why? Because we have close to 1 million young people coming to the labor market looking for jobs every year,” Maait said.

“Who will be able to create that? The government cannot create more than 100,000 new jobs. An economy led by the private sector can create 900,000 — even more — jobs, but we have to give them the opportunity.”


Oil Updates – prices dip as demand worries outweigh Mideast supply fears

Oil Updates – prices dip as demand worries outweigh Mideast supply fears
Updated 17 April 2024
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Oil Updates – prices dip as demand worries outweigh Mideast supply fears

Oil Updates – prices dip as demand worries outweigh Mideast supply fears

TOKYO/SINGAPORE: Oil prices extended losses on Wednesday as worries about global demand due to weak economic momentum in China and a likely rise in US commercial stockpiles outweighed supply fears from heightened tensions in the Middle East, according to Reuters.

Brent futures for June fell 40 cents, or 0.44 percent, to $89.62 a barrel by 9:32 a.m. Saudi time, while US crude futures for May fell 48 cents, or 0.56 percent, to $84.88 a barrel.

Oil prices have softened so far this week as economic headwinds pressured investor sentiment, curbing gains from geopolitical tensions, with market’s eyeing on how Israel might respond to Iran’s attack over the weekend.

“With oil prices highly sensitive to geopolitical risks, the past week has seen some wait-and-see consolidation in place as Israel’s response will determine if there may be a wider regional conflict, which could significantly impact oil supplies,” said IG market strategist Yeap Jun Rong.

“For now, the near-term weakness in oil prices may reflect some expectations that tensions may still be contained and that other key oil producer such as Saudi Arabia may jump in to mitigate any global supply shock,” Yeap added.

In China, the world’s biggest oil importer, the economy grew faster than expected in the first quarter, but several March indicators, including property investment, retail sales and industrial output, showed that demand at home remains frail, weighing on overall momentum.

“Apart from that, a build-up in US crude inventories overnight and a mixed set of economic data out of China also offered some reservations, alongside near-term overbought technicals which prompts some profit-taking,” Yeap said.

US crude oil inventories rose last week more than expected by analysts polled by Reuters, according to market sources citing American Petroleum Institute figures on Tuesday. Official data from the Energy Information Administration, the statistical arm of the US Department of Energy, is due on Wednesday at 5:30 p.m. Saudi time.

In the Middle East, a third meeting of Israel’s war cabinet set for Tuesday to decide on a response to Iran’s first-ever direct attack was put off until Wednesday, as Western allies eyed swift new sanctions against Tehran to help dissuade Israel from a major escalation.

Analysts however do not expect Iran’s unprecedented missile and drone strike on Israel to prompt dramatic sanctions action on Iran’s oil exports from the Biden administration.

Meanwhile, the US government could reimpose oil sanctions on Venezuela on Thursday — which in turn could tighten supplies in the market.

Prices could trade sideways in the meantime because of these current market drivers, analysts say.

WTI price movements in the short term are likely to be trapped in a sideways range between $83.20 and $87.70 due to conflicting factors such as China’s disappointing retail sales in March and geopolitical risk premium still remaining intact, said OANDA senior market analyst Kelvin Wong.