Oil Updates – trades little changed as markets weigh Russian supply cuts against weaker dollar

Oil Updates – trades little changed as markets weigh Russian supply cuts against weaker dollar
US West Texas Intermediate crude futures rose 6 cents to $82.01 a barrel at 8:41 a.m. Saudi time. Shutterstock
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Updated 26 March 2024
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Oil Updates – trades little changed as markets weigh Russian supply cuts against weaker dollar

Oil Updates – trades little changed as markets weigh Russian supply cuts against weaker dollar

SINGAPORE: Oil was little changed on Tuesday, after rising in the previous session, as investors took a more mixed view toward the loss of Russian refinery capacity after recent Ukrainian attacks, though a slightly weaker US dollar offered some support, according to Reuters.

Brent crude futures for May climbed by 7 cents to $86.82 a barrel, while US West Texas Intermediate crude futures rose 6 cents to $82.01 a barrel at 8:41 a.m. Saudi time.

Brent rose 1.5 percent in Monday’s session while WTI gained 1.6 percent higher after Russia’s government ordered companies to cut output in the second quarter to meet a 9 million barrels per day target to comply with pledges to the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.

Russia, a top three global oil producer and one of the largest exporters of oil products, is also contending with recent attacks on its oil refineries by Ukraine that Goldman Sachs analysts said has knocked about 900,000 bpd of capacity offline, possibly for weeks and even in some cases permanently.

“The impact of refining disruptions on crude prices is mixed, with a bearish effect from the decline in refinery demand and a bullish effect from the potential reduction in Russia oil exports,” the analysts said in a note.

After a Ukrainian drone attack on Saturday, Russian oil producer Rosneft shut a 70,000 bpd crude unit at its Kuibyshev refinery in the city of Samara.

While the consequences of the attacks and Russian cuts seemed unclear, a slightly weaker US dollar from the previous session somewhat supported prices.

A weaker dollar typically makes it cheaper for oil purchases in other currencies which could bolster overall demand.

“The USD may continue to face downside pressure as the Fed is expected to cut rates later this year, which potentially offers the bullish factor to oil prices,” said independent market analyst Tina Teng.

Rising geopolitical premiums as the Israel-Gaza conflict ongoing were also supportive of prices, though an immediate impact on supplies in the Middle East region remains to be seen.

A positive geopolitical risk premium, as there is no clear ceasefire breakthrough between Israel and Hamas, remains a key supportive price factor for oil at this juncture, said senior market analyst Kelvin Wong at OANDA.


Oil Updates – crude slips for third session on likely ‘higher for longer’ US rates

Oil Updates – crude slips for third session on likely ‘higher for longer’ US rates
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Oil Updates – crude slips for third session on likely ‘higher for longer’ US rates

Oil Updates – crude slips for third session on likely ‘higher for longer’ US rates

SINGAPORE: Oil prices fell for a third straight session on Wednesday on expectations the Federal Reserve might keep US interest rates higher for longer due to sustained inflation, potentially impacting fuel use in the world’s largest oil consumer, according to Reuters.

Brent crude futures were down 71 cents, or 0.9 percent, to $82.17 a barrel, while US West Texas Intermediate crude futures slipped 73 cents, or 0.9 percent, to $77.93 as of 9:50 a.m. Saudi time.

Oil prices settled about 1 percent lower on Tuesday.

Fed policymakers said on Tuesday the US central bank should wait several more months to ensure that inflation really is back on track toward its 2 percent target before cutting interest rates.

Higher borrowing costs can slow economic growth and pressure oil demand.

US crude oil and gasoline inventories rose last week, while distillates fell, according to market sources citing American Petroleum Institute (API) figures on Tuesday.

Ahead of this weekend’s Memorial Day holiday, which kicks off the US peak summer driving season, retail gasoline prices fell for the fourth consecutive week. US prices of diesel, a key refined product for both the industrial sector and transport, have also slipped.

Investors are awaiting minutes from the Fed’s last policy meeting and weekly US oil inventory data from the US Energy Information Administration due later on Wednesday.

“The Federal Open Market Committee minutes will be scrutinized for Fed’s assessment of bumpy Q1 inflation and clues on the timing and extent of potential interest rate cuts in 2024,” ANZ analysts said in a report.

“It’s more of a wait and see ‘what the data is telling us’ approach,” ANZ said.

The eurozone has all but promised a rate cut on June 6 amid more positive economic outlook. European Central Bank President Christine Lagarde said in an interview aired on Tuesday that she was “really confident” eurozone inflation was under control.


EU states give final endorsement to AI rules

EU states give final endorsement to AI rules
Updated 21 May 2024
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EU states give final endorsement to AI rules

EU states give final endorsement to AI rules
  • The EU says the law will protect citizens from AI’s dangers while harnessing the technology’s potential in Europe

RIYADH: EU states on Tuesday gave their final backing to landmark rules on artificial intelligence that will govern powerful systems like OpenAI’s ChatGPT.

The European Parliament had already approved the law in March and it will now enter into force after being published in the official EU journal in the coming days.

The EU says the law will protect citizens from AI’s dangers while harnessing the technology’s potential in Europe.

First proposed in 2021, the rules took on greater urgency after ChatGPT arrived in 2022, showing generative AI’s human-like ability to produce eloquent text within seconds.

Other examples of generative AI include Dall-E and Midjourney, which can produce images in nearly any style with a simple input in everyday language. The law known as the “AI Act” takes a risk-based approach: if a system is high-risk, a company has a tougher set of obligations to fulfill to protect citizens’ rights.

There are strict bans on using AI for predictive policing and systems that use biometric information to infer an individual’s race, religion or sexual orientation. Companies will have to comply by 2026 but rules covering AI models like ChatGPT will apply 12 months after the law becomes official.

Pledge

The world’s leading companies pledged at the start of a mini summit on AI to develop the technology safely, including pulling the plug if they can’t rein in the most extreme risks.

World leaders are expected to hammer out further agreements on artificial intelligence as they gathered virtually to discuss AI’s potential risks but also ways to promote its benefits and innovation.

The AI Seoul Summit is a low-key follow-up to November’s high-profile AI Safety Summit at Bletchley Park in the UK, where participating countries agreed to work together to contain the potentially “catastrophic” risks posed by breakneck advances in AI.

The two-day meeting — co-hosted by South Korea and the UK — also comes as major tech companies like Meta, OpenAI and Google roll out the latest versions of their AI models.

They’re among 16 AI companies that made voluntary commitments to AI safety as the talks got underway, according to a British government announcement. 

The companies, which also include Amazon, Microsoft, France’s Mistral AI, China’s Zhipu.ai, and G42 of the UAE, vowed to ensure safety of their most cutting edge AI models with promises of accountable governance and public transparency.

The pledge includes publishing safety frameworks setting out how they will measure risks of these models.


Saudi Arabia is a model of sustainable aviation practices: ICAO official

Saudi Arabia is a model of sustainable aviation practices: ICAO official
Updated 22 May 2024
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Saudi Arabia is a model of sustainable aviation practices: ICAO official

Saudi Arabia is a model of sustainable aviation practices: ICAO official

RIYADH: Saudi Arabia is a “model” for sustainable practices in the aviation section, said president of the International Civil Aviation Organization Council.

In an interview with Arab News during the Future Aviation Forum in Riyadh, Salvatore Sciacchitano emphasized the Kingdom’s position as an emerging leader in sustainable aviation. 

Speaking about the global agenda to reduce carbon emissions, Sciacchitano said: “Saudi Arabia is in this sense a model because their plan of development is in the perspective of sustainability. This is very positive.” 

“They have projects for low-carbon emission fuels. That means fossil fuels but to produce reduced emissions thanks to green energy that is used for the production. So this is a good direction,” he added.  

The ICAO official highlighted the importance of adhering to international standards and practices, saying that Saudi Arabia’s aviation growth aligns with global standards.  

He stated: “The regulations are there, we call SARPs, standards and recommended practices, these are applicable all over the world to all 193 (member) states of ICAO.” 

Highlighting the role of the Kingdom’s General Authority of Civil Aviation, Sciacchitano praised the support of the authority to the Regional Safety Oversight Organization, which is a way to put resources together at the regional level. 

“Let me say that the GACA is well advanced in terms of programs, projects, training, and also providing support at (the) regional level,” he said. 

“In this sense, Saudi Arabia is well prepared, not just to support its own development, but also to support the development of the region,” he added. 

Sciacchitano said ICAO is there to support its member states. Although he believes that the Kingdom is fully capable of achieving its goals independently. “We absolutely support them with our expertise,” he added. 

Sciacchitano predicted a significant increase in global air traffic, with the number of passengers expected to reach 11.5 billion by 2050, up from the current 4.6 billion.  

He emphasized the need for technological advancements to accommodate this growth, stating that technologies will allow the world to accommodate more airplanes in the air and more space on the ground. 


Pakistan approves petrol, diesel supply deal between Aramco, GO Petroleum

Pakistan approves petrol, diesel supply deal between Aramco, GO Petroleum
Updated 22 May 2024
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Pakistan approves petrol, diesel supply deal between Aramco, GO Petroleum

Pakistan approves petrol, diesel supply deal between Aramco, GO Petroleum

KARACHI: The Competition Commission of Pakistan has granted a time-bound exemption on relevant clauses of a product supply agreement between Saudi oil giant Aramco and Gas & Oil Pakistan Ltd.,  known as GO Petroleum, for the import and sale of petrol and diesel products to Pakistan, the CCP said on Tuesday.

Aramco Trading Co. Fujairah FZE Ltd. is one of the world’s largest integrated energy and chemicals companies, while GO Petroleum is an oil-marketing company registered in Pakistan that operates a network of retail outlets across the country that sell petrol, diesel and lubricants.

Under the agreement, ATC Fujairah intends to meet GO Petroleum’s demand for essential petroleum products for its outlets, which primarily includes petrol and diesel.

“The parties submitted to the CCP that this arrangement is expected to achieve economies of scale in procurement for GO Petroleum, potentially resulting in better prices for Pakistani consumers,” the CCP said in a statement.

“The exemption sought was on exclusivity aspects of the commercial agreement to supply 100 percent demand of imported products for GO Petroleum’s retail outlets. The CCP has accordingly granted exemption on the product supply agreement with certain conditions included therein.”

The CCP grants exemptions pursuant to Section 9 of the Competition Act, 2010, ensuring that such exemptions have economic benefits that outweigh anti-competitive effects.

“The CCP’s conditions stipulate that both parties must refrain from engaging in anti-competitive activities. Importantly, the exemption does not include approval on any pricing terms and mechanisms related to the products,” the CCP statement read.

“Additionally, as the agreement has referred to certain off specification products, however approval of concerned sector regulator should be ensured for import and sales. The applicants have also been directed to ensure required approvals on their terminals and storage facilities by relevant authorities to be used in the execution of this agreement.”

Subject to the conditions, the CCP said, it had granted the exemption until June 2026 and both applicants could approach it for an extension with required details and also identifying the benefits that have accrued to the improved distribution network of petroleum products and enhanced competition in the market.

Last month, the CCP approved Saudi oil giant Aramco’s move to acquire a 40 percent stake in Go Petroleum, officially marking the Saudi company’s entry into Pakistan’s fuels retail market.

The CCP said it had authorized the merger after determining the acquisition would not result in the acquirers’ “dominance” in the relevant market post-transaction. The acquisition would help bring much-needed foreign direct investment in Pakistan’s energy sector, contributing to economic growth and development of the country, it added.

In February 2019, Pakistan and Saudi Arabia inked investment deals totaling $21 billion during the visit of Saudi Crown Prince Mohammed bin Salman to Islamabad. The agreements included about $10 billion for an Aramco oil refinery and $1 billion for a petrochemical complex at the strategic Gwadar Port in Balochistan.

Both countries have lately been working to increase bilateral trade and investment, and the Kingdom recently reaffirmed its commitment to expedite an investment package worth $5 billion.


Saudi Arabia to reveal new innovative tourism strategy in 2024: top official

Saudi Arabia to reveal new innovative tourism strategy in 2024: top official
Updated 22 May 2024
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Saudi Arabia to reveal new innovative tourism strategy in 2024: top official

Saudi Arabia to reveal new innovative tourism strategy in 2024: top official

RIYADH: Saudi Arabia is set to unveil a new tourism strategy this year utilizing artificial intelligence and seamless technology, according to a top official.

Speaking to Arab News in an interview on the sidelines of the Future Aviation Forum 2024, Gloria Guevara Manzo, chief special adviser at the Ministry of Tourism, noted that the plan seeks to maximize the Kingdom’s assets including culture, history, heritage and hospitality.

“Right now, the ministry, under the leadership of his excellency, is developing the new strategy, and that new strategy is going to include several new things, such as the use of AI, for instance, seamless and many other technologies that are important for growth,” Manzo said.

She added: “(The) strategy, hopefully is going to be released this year and is going to be shared with the world. The strategy that we have right now was developed in 2019. We accomplished the milestone of the 100 million tourists, domestic and international, seven years ahead (of schedule).”

Manzo also discussed the importance of sustainability so people are still “enjoying” the world today while ensuring resources are preserved for future use

This concept involves multiple facets, including economic, environmental, and social considerations.

“For 30 years, we have been measuring and that’s why we know that 10 percent of the global gross domestic product before the pandemic (came from travel and tourism), and we’re going to reach that number this year again,” Manzo said.

She added that before the COVID-19 outbreak there were 330 million jobs in the industry, adding: “This year, we’re hoping to break a record with 348 million. One out of 10 jobs depends on this sector, so the economic aspect is very clear. The social aspect also is quite interesting — 54 percent women, 30 percent youth.”

Manzo emphasized the positive social impacts of travel and tourism, such as poverty reduction and the prevention of illegal migration by providing local job opportunities.

Despite these benefits, there had been a lack of clear measurement regarding the sustainability of this industry.

However, a significant study sponsored by Saudi Arabia, particularly by Minister of Tourism Ahmed Al-Khateeb and the ministry, addressed this gap.

Released last year, this provided comprehensive insights into the environmental impact of travel and tourism, revealing that 8.1 percent of greenhouse emissions are attributable to this sector.

“Now that we know that, then we can go industry by industry to understand what is the impact, and from that 8 percent, 47 percent is due to transportation and it could be aviation, it can be road, it can be cruising all the different aspects,” she said.

Manzo added: “Now, the reality is that aviation counts between 1.5 and 2 percent of the global emissions. But as I said in the panel, we cannot see this in an isolated approach. We need to see this from a holistic point of view. We need to understand what are the quick wins.”

Therefore, she noted that this does not mean stopping flying is the solution, as it has “very severe consequences.”

She said: “Millions of people can lose their jobs. We saw that during the pandemic, travel provides food on the table to millions of people from around the world. That’s a factor that we have to consider.” 

Mazo stated that the right approach should be finding ways to travel in a more sustainable way, as she referred to a statement by Saudi Energy Minister Prince Abdulaziz bin Salman ,when he said that the Kingdom is leading this transition.

Furthermore, the adviser stressed the importance of the Future Aviation Forum as it reflects the significance of connectivity within and outside the Kingdom as emphasized by Al-Khateeb on the first day.

“We need to increase the connectivity within the Kingdom, to the Kingdom and of course outside in order to increase the trade and do business and have more exports, more imports, and all of the above,” she stated.

Manzo continued: “In that regard it is very important to continue with the partnerships, not only at the destination level, but also at the corporate level and with the different entities, with the government. Without transport, we don’t have tourism, and tourism is very important for transport also to grow.”