Oil Updates – crude retreats from multi-month highs, strong dollar dents demand

Oil Updates – crude retreats from multi-month highs, strong dollar dents demand
Brent crude futures for May delivery fell 16 cents, or 0.2 percent, to $87.22 a barrel by 7:07 a.m. Saudi time. Shutterstock
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Updated 21 March 2024
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Oil Updates – crude retreats from multi-month highs, strong dollar dents demand

Oil Updates – crude retreats from multi-month highs, strong dollar dents demand

SINGAPORE: Oil prices edged lower on Wednesday, as a stronger dollar curbed investor appetite while traders took some money off the table after benchmarks rallied to multi-month highs in the previous session, according to Reuters.

Brent crude futures for May delivery fell 16 cents, or 0.2 percent, to $87.22 a barrel by 7:07 a.m. Saudi time.

US West Texas Intermediate futures for April delivery, which expire on Wednesday’s settlement, fell 31 cents, or 0.4 percent, to $83.16 a barrel. 

The more active May WTI contract was at $82.55 a barrel, down 18 cents.

“Profit-taking could be a reason for the downside movement today,” Auckland-based independent analyst Tina Teng said, adding that the recent price rally has been supported by improving demand outlook and signs of supply reduction.

Weighing on Asian buyer sentiment, the US dollar index climbed higher for a fifth-straight session after recent data pointed to a resilient American economy.

A stronger dollar makes oil more expensive for investors holding other currencies, dampening demand.

Traders looked ahead to the Federal Reserve’s interest rate announcement later on Wednesday for signs of its rate path for the rest of the year.

Both Brent and WTI settled at their highest levels since late October in the previous session as market participants assessed the impact on crude and petroleum supplies from Ukrainian drone attacks on Russian refineries.

“Supply risks surrounding Russian refined products continue to provide support at a time when the market is set to tighten following the rollover of additional voluntary cuts from OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) into 2Q24,” ING analysts including Warren Patterson said in a note.

A drop in Russian refining capacity as a result of the strikes has led to an increase in crude oil exports from the country, trade sources told Reuters on Tuesday.

Oil exports from Russia’s western ports will increase by almost 260,000 barrels per day in March over an initial monthly plan to 2.22 million bpd, they said.

“If these disruptions are prolonged, it could eventually force Russian producers to reduce supply if they are unable to export all of this crude oil,” Patterson said.

“These attacks are more bullish for refined products in the immediate term.”

The American Petroleum Institute reported US crude oil and gasoline stockpiles fell last week, while distillate inventories rose, according to sources. A Reuters poll of analysts expected stocks to rise by about 10,000 barrels last week.

Official stockpile data from the US Energy Information Administration is due at 5:30 p.m. Saudi time on Wednesday. 


COP16: Largest-ever UN meeting on desertification starts in Riyadh

COP16: Largest-ever UN meeting on desertification starts in Riyadh
Updated 3 min 40 sec ago
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COP16: Largest-ever UN meeting on desertification starts in Riyadh

COP16: Largest-ever UN meeting on desertification starts in Riyadh

RIYADH: The largest-ever meeting of the UN Convention to Combat Desertification has kicked off in Riyadh, with bolstering global drought resilience one of the key goals.

Running from Dec. 2 to 13, the first few days of COP16 are set to see a number of high-profile summits, ministerial dialogues, and announcements to address the pressing challenges associated with land degradation, degradation and drought. 

French President Emmanuel Macron is expected to be among the attendees, as is the President of the World Bank Ajay Banga. 

The opening day of the event will see Saudi Arabia use its presidency of the event to launch the Riyadh Global Drought Resilience Initiative, in a bid to accelerate international action in this area.

In tandem, the Saudi Green Initiative Forum, running from Dec. 2 to 3, will include hundreds of policymakers, business leaders and subject matter experts from across the world in a dedicated pavilion in the COP16 Green Zone.

The Second International Forum on Greening Technologies is also set to take place in the Green Zone between Dec 6-8, including dozens of tailored sessions to explore solutions, innovations, and lessons learned from global greening projects, alongside showcasing the scientific research associated with restoration projects around the world.

10:36 a.m. - Abdulrahman Abdulmohsen Al-Fadley elected as COP16 president


Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

Tripartite deal signed to strengthen Saudi Arabia’s real estate sector
Updated 01 December 2024
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Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

JEDDAH: Saudi Arabia’s real estate sector is poised for significant growth following a new tripartite partnership designed to enhance housing finance and establish a secondary mortgage market.

Under the patronage of Minister of Municipal and Rural Affairs Majid Al-Hogail a memorandum of understanding was signed on Sunday by the Real Estate Development Fund, Saudi Real Estate Refinance Co., and Al-Ahli Bank. The agreement aims to support the Kingdom’s housing sector and accelerate the development of a secondary mortgage market.

The MoU, which involves the Public Investment Fund’s fully owned SRC and Al-Ahli Bank, marks an important step in fostering closer collaboration between financial institutions. As part of the agreement, Al-Ahli Bank will continue to create mortgage portfolios, which will be refinanced through the SRC, according to the Saudi Press Agency.

This partnership is expected to fast-track the creation of mortgage-backed securities (MBS), both domestically and internationally. By doing so, it will help realize the goals of the Kingdom's housing program, promoting the development of a sustainable and integrated real estate financing system. The initiative will also contribute to expanding housing options for Saudi citizens.

Recent data from the Saudi Central Bank shows that banks in Saudi Arabia disbursed SR60.92 billion ($16.24 billion) in residential mortgages during the first nine months of 2024, marking a 4.88 percent increase compared to the same period in 2023. Of this amount, SR38.85 billion was allocated for home purchases, accounting for 64 percent of the total mortgage loans. However, the share of loans for house purchases declined slightly by 3.38 percent year on year, dropping from 69 percent in 2023.

Demand for apartments has surged in response to urbanization and demographic shifts. Apartments now account for 31 percent of all mortgages, up from 25 percent last year, with lending for apartment purchases reaching SR18.6 billion — an increase of 26.8 percent. Loans for land purchases also grew by 8.26 percent to reach SR3.5 billion, underscoring continued interest in land investment across the Kingdom.

The new partnership aims to provide liquidity in the market, ensuring a continuous flow of mortgage financing and supporting the development of the secondary mortgage market in Saudi Arabia.

At the signing ceremony, Al-Hogail also launched a new financing offer from Al-Ahli Bank, with rates starting as low as 2.59% for those interested in purchasing units under construction.

Mansour bin Madi, CEO of the Real Estate Development Fund, emphasized that the strategic partnership with SRC and financial institutions aims to improve the residential mortgage market and reduce financing costs for Saudi families. He highlighted that the initiative aligns with the objectives of the “Sakani” program and the broader real estate goals of Saudi Vision 2030.

Majeed Al-Abduljabbar, CEO of SRC, noted: “This partnership with Al-Ahli Bank is a crucial step in advancing the mortgage financing market in the Kingdom. Through this collaboration, we aim to offer innovative solutions that enhance liquidity, allowing financial institutions to provide mortgage financing tailored to market needs, while expanding property options for citizens.”

Tareq Al-Sadhan, CEO of Al-Ahli Bank, affirmed that the partnership with SRC demonstrates the bank’s commitment to fostering growth in the housing sector and contributing to the development of a dynamic secondary mortgage market. This, he added, will support Saudi Arabia’s broader economic diversification efforts.


Closing Bell: Saudi main index rises to close at 11,741

Closing Bell: Saudi main index rises to close at 11,741
Updated 01 December 2024
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Closing Bell: Saudi main index rises to close at 11,741

Closing Bell: Saudi main index rises to close at 11,741

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 100.43 points, or 0.86 percent, to close at 11,741.74.  

The total trading turnover of the benchmark index was SR4.63 billion ($1.23 billion), as 159 of the stocks advanced and 64 retreated.   

On the other hand, the Kingdom’s parallel market Nomu lost 221.58 points, or 0.73 percent, to close at 30,173.12. This comes as 34 of the listed stocks advanced while 48 retreated.   

The MSCI Tadawul Index gained 11.24 points, or 0.77 percent, to close at 1,471.59.   

The best-performing stock of the day was Gulf Insurance Group, whose share price surged 8.35 percent to SR31.80.  

Other top performers included Saudi Arabian Cooperative Insurance Co., whose share price rose 4.61 percent to SR15.44, and Lazurde Co. for Jewelry, whose share price increased 4.26 percent to SR13.70.

Tamkeen Human Resource Co. recorded the biggest drop, falling 11.34 percent to SR68.

Etihad Etisalat Co. also saw its stock prices fall 3.08 percent to SR53.50.

Meanwhile, Northern Region Cement Co. also saw its stock prices dropping 1.86 percent to SR8.98.

On the announcements front, Nice One Beauty Digital Marketing Co. has announced plans to raise up to SR1.2 billion by offering 30 percent of its shares on the Saudi Stock Exchange.

SNB Capital Co. will act as the offering’s lead manager, financial advisor, book-runner, and underwriter.

EFG Hermes Saudi Arabia will join as joint financial advisors, book-runners, and underwriters. The institutional book-building period will run from Dec. 1 to 8.

According to a Tadawul statement, the price range for the offering has been set between SR32 and SR35 per share. The offering is comprised of 34.650 million ordinary shares, representing 30 percent of the company’s capital after the issuance of new shares and capital increase.

The minimum number of offer shares to be applied for participating parties is 100,000, while the maximum is 5.7 million. The participation in the book-building process is confined to the participating parties in accordance with the Instructions for Book Building Process and Allocation Method in the initial public offering issued by the Capital Market Authority. 

The final price per offer share will be determined after the completion of the book-building process, to be followed by the individual subscriber’s subscription process. The final allocation of the offer shares will be made after the end of the subscription period for individual investors.


Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies
Updated 01 December 2024
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Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

RIYADH: Saudi Arabia’s Council of Economic and Development Affairs reviewed the Kingdom’s economic outlook and strategies to address global challenges, offering recommendations to support growth and resilience.  

In a video conference meeting, the council began by reviewing the quarterly economic report from the Ministry of Economy and Planning, which highlighted key developments in both global and national economies, the Saudi Press Agency reported. 

This follows Saudi Arabia’s 2.8 percent economic growth in the third quarter of 2024, driven by strong performance in non-oil sectors, official data showed.  

The country’s non-oil sector expanded by 4.2 percent year-on-year, in line with Vision 2030’s goal to reduce dependence on oil, according to a recent report from the General Authority for Statistics. 

During the meeting, the council reviewed the Ministry of Finance’s third-quarter report on the performance of the state’s general budget for fiscal year 2024. The report provided a breakdown of financial performance through the third quarter, including indicators for revenues, expenditures, and public debt. 

The findings confirm the Kingdom’s ongoing support for development projects, its strengthening of social care and protection systems, and its commitment to implementing major initiatives under Vision 2030. 

The Ministry of Commerce also presented a report from the Permanent Committee for Price Monitoring during the third quarter of 2024, outlining the roles and tasks of the committee's participants. 

The report highlighted key developments, including global price trends, consumption patterns, and inflation indicators in the Kingdom. It also detailed consumer goods prices for the third quarter and the measures taken to ensure the availability of goods and maintain price stability. 

The meeting also covered several other topics and reports, including the National Export Strategy Project, the National Savings Strategy, and initiatives related to financial inclusion and education. 

Additionally, the council reviewed the third-quarter 2024 Real Estate Price Index, the executive summary of foreign trade for August 2024, the September 2024 Consumer Price Index report, and the Wholesale Price Index report for the same period. 

The meeting concluded with the council making necessary decisions and recommendations on all discussed matters. The council’s recommendations and decisions are set to guide the country’s economic trajectory in the coming months. 


Oman inflation at 0.8% in October: official data

Oman inflation at 0.8% in October: official data
Updated 01 December 2024
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Oman inflation at 0.8% in October: official data

Oman inflation at 0.8% in October: official data

RIYADH: Oman’s inflation rate saw a modest 0.8 percent increase in October compared to the same month last year despite price increases across several categories, according to an official report.  

The National Center for Statistics and Information analysis revealed that consumer prices for miscellaneous goods and services increased by 4.8 percent year on year, followed by food and non-alcoholic beverages by 3.5 percent, healthcare by 3.2 percent, and culture and recreation by 0.8 percent.  

Restaurants and hotels also saw gains of 0.6 percent, clothing and footwear by 0.5 percent, household furniture and maintenance by 0.4 percent, and education by 0.1 percent.  

Conversely, transportation prices declined by 2.6 percent, while housing, utilities, fuel, communication, and tobacco categories remained stable.  

Breaking down the food and beverage category, vegetable prices recorded the largest increase at 8.9 percent. Fruits followed with an 8 percent rise. Dairy products, including milk, cheese, and eggs, increased by 5.4 percent. Oils and fats rose by 3.8 percent, while meat prices climbed by 2.8 percent. Sugar and confectionery saw a 2.4 percent increase. 

Processed foods increased by 1.8 percent, bread and cereals by 0.8 percent, and non-alcoholic beverages by 0.7 percent. Meanwhile, fish and seafood prices fell by 1.2 percent, partially offsetting the broader price hikes in food items.  

Broad money supply  

Data by the nation’s central bank pointed to a significant expansion in Oman’s broad money supply, which grew by 13.9 percent year on year, reaching 24.7 billion Omani rials ($64.1 billion) by the end of September.  

This growth was driven by an 18.2 percent increase in narrow money and a 12.3 percent rise in quasi-money, which includes savings deposits, term deposits in Omani rials, and certificates of deposit issued by banks, as well as margin accounts, and foreign currency holdings within the banking sector.  

Despite the overall monetary expansion, cash held by the public declined by 6.7 percent, while demand deposits surged by 25.1 percent, reflecting changing preferences in liquidity management.  

Commercial banks in Oman recorded rising interest rates during the period. The weighted average interest rate on Omani rial-denominated deposits increased from 2.453 percent in September 2023 to 2.679 percent in September this year.  

Similarly, the weighted average interest rate on loans denominated in Omani rials rose from 5.451 percent to 5.604 percent over the same period.  

Interbank lending rates for overnight transactions declined slightly, with the average falling to 4.896 percent in September compared to 5.388 percent in the same month last year.  

This shift aligns with the reduction in the weighted average repurchase rate, which decreased from 6.000 percent to 5.790 percent during the same timeframe. These movements are attributed to adjustments in monetary policy in line with the US Federal Reserve’s actions.