Oil Updates – prices climb on US output concerns, potential crude inventory drop

Oil Updates – prices climb on US output concerns, potential crude inventory drop
China’s oil refinery output fell for a fifth month in August amid declining fuel demand and weak export margins. Shutterstock
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Updated 17 September 2024
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Oil Updates – prices climb on US output concerns, potential crude inventory drop

Oil Updates – prices climb on US output concerns, potential crude inventory drop
  • Brent crude futures for November were up 36 cents, or 0.5%, at $73.11 a barrel
  • US crude futures for October climbed 53 cents, or 0.8%, to $70.62 a barrel

SINGAPORE: Oil prices extended gains on Tuesday as the market eyed US output concerns in the aftermath of Hurricane Francine and expectations of lower US crude stockpiles.

Brent crude futures for November were up 36 cents, or 0.5 percent, at $73.11 a barrel, as of 9:35 a.m. Saudi time. US crude futures for October climbed 53 cents, or 0.8 percent, to $70.62 a barrel.

Both contracts settled higher in the previous session as the impact of Hurricane Francine on the output in the US Gulf of Mexico countered Chinese demand concerns ahead of the US Federal Reserve’s interest rate cut decision this week, which should prove positive for investor sentiment in oil.

More than 12 percent of crude production and 16 percent of natural gas output in the US Gulf of Mexico remained offline, according to the US Bureau of Safety and Environmental Enforcement on Monday.

“Oil prices managed to recover slightly ... (An) extreme bearish state over the past weeks called for some near-term stabilization, with prices previously touching their lowest level since 2021,” said Yeap Jun Rong, market strategist at IG.

“But a weaker-than-expected run in China’s economic data lately could still be a source of caution, while the lead-up to the upcoming FOMC interest rate decision may limit some risk-taking,” Yeap added, referring to the Federal Open Market Committee.

The Fed is expected to start its easing cycle on Wednesday, with Fed funds futures showing markets are now pricing in a 69 percent chance the central bank will cut rates by 50 basis points.

“Growing expectations of an aggressive rate cut boosted sentiment across the commodities complex,” ANZ analysts said in a note, adding that supply disruptions also supported oil markets.

A lower interest rate will reduce the cost of borrowing and can potentially lift oil demand by supporting economic growth.

Investors also eyed an expected drop in US crude inventories, which likely fell by about 200,000 barrels in the week ended Sept. 13, based on a Reuters poll.

Still, lower-than-expected demand growth in China, the world’s largest crude importer, have capped price gains. China’s oil refinery output fell for a fifth month in August amid declining fuel demand and weak export margins, government data showed on Saturday.


Dubai summit unveils strategic partnerships to drive growth in Mideast’s hospitality sector

Dubai summit unveils strategic partnerships to drive growth in Mideast’s hospitality sector
Updated 6 sec ago
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Dubai summit unveils strategic partnerships to drive growth in Mideast’s hospitality sector

Dubai summit unveils strategic partnerships to drive growth in Mideast’s hospitality sector

DUBAI: The first day of the Future Hospitality Summit in Dubai saw the signing of several agreements, underscoring ongoing growth and innovation within the Middle East’s hospitality sector.

During the event, Saudi Arabia’s Mohammed Abdullah Al Muhanna Hotels Ltd. revealed a collaboration with Marriott International to launch the Four Points by Sheraton Jeddah, with Aleph Hospitality set to manage the property. This new hotel is expected to enhance Jeddah’s evolving hospitality landscape upon its opening in 2025.

In another major development, Accor entered a partnership with Summary Executive Properties to create Swissotel Residences Waterfront, the brand’s first standalone residential project worldwide.

Scheduled for completion in 2027 on Dubai Islands, this luxurious development will feature 105 residences, including apartments and penthouses, all boasting stunning views of the Dubai skyline.

Dmitry Kryuchkov, founder of Summary Executive Properties, commented: “The partnership with Accor Group reflects our shared vision of establishing a luxurious residential community that exemplifies the highest standards of design, luxury living, and tailored services for homeowners.”

The project will be supported by Accor One Living, a platform dedicated to mixed-use developments and community living, further enhancing Accor’s footprint in the region, where it currently manages 282 properties and has an additional 112 in the pipeline.

Skyline University College also announced several agreements aimed at strengthening the region’s hospitality, real estate, and tourism sectors.

A collaboration with HAMA MEA aims to launch initiatives beneficial to both organizations and the broader industry.

A memorandum of understanding was established with the UAE Restaurants Group, representing over 2,000 outlets, to foster growth in hospitality, food and beverage, and community engagement.

With a strong focus on education and skill development, Skyline University College is poised to make significant contributions through these partnerships.

The FHS, taking place from Sept. 30 to Oct. 2, brings together over 1,500 industry leaders and features more than 110 speakers.

Under the theme “Invest in Our Future,” the summit addresses crucial issues shaping the global hospitality landscape, emphasizing innovation, sustainability, technology, and investment opportunities.

This year’s agenda includes over 40 sessions spread across 20 conference tracks on four dedicated stages: Summit, Future, Exhibition, and Innovation. Topics will cover environmental, social, and governance issues, sustainable development, human capital, real estate, technology, branding, and culture.


Saudi Arabia projects $315.73bn revenue for FY2025 amid fiscal reforms

Saudi Arabia projects $315.73bn revenue for FY2025 amid fiscal reforms
Updated 21 min 55 sec ago
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Saudi Arabia projects $315.73bn revenue for FY2025 amid fiscal reforms

Saudi Arabia projects $315.73bn revenue for FY2025 amid fiscal reforms

RIYADH: Saudi Arabia’s Ministry of Finance has released its pre-budget statement for fiscal year 2025, projecting total revenues to reach approximately SR1.18 trillion ($315.73 billion), marking a 4 percent decrease from previous forecasts.

These estimates are based on a baseline scenario positioned between low and high and developed to address the challenges and geopolitical risks impacting the global economy.

The ministry emphasized that this strategy allows the government to maintain a flexible fiscal framework.

Preliminary estimates for total expenditures are set at SR1.28 trillion, resulting in a projected budget deficit of SR101 billion, which is 38 percent higher than the FY2024 estimates.

This deficit, equivalent to 2.3 percent of gross domestic product, is considered expected and is anticipated to persist over the medium term due to ongoing expansionary spending policies.

Commenting on the outlook, Finance Minister Mohammed Al-Jaadan said: “The pre-budget statement for the fiscal year 2025 confirms that Saudi Arabia’s government will continue to focus its spending on essential services for citizens and residents, as well as on the execution of strategic projects to enhance economic growth and achieve sustainable development.”

The ministry also released revised estimates for FY 2024, indicating revenues of SR1.24 trillion, a 6 percent increase from previous forecasts.

Expenditures are projected to reach SR1.35 trillion, reflecting an 8 percent rise, resulting in a deficit of SR118 billion primarily due to increased spending.

The FY 2025 budget aligns with Saudi Vision 2030 by advancing fiscal and economic reforms. The government aims to balance its strong fiscal position, financial reserves, and low public debt while improving spending efficiency and prioritization.

Key focuses include accelerating projects that promote sustainable economic growth and adjusting others to stabilize and diversify the economy. The budget prioritizes enhancements in social services, social protection, and regulatory reforms.

Additionally, it emphasizes transformative spending, utilizing sovereign funds, and empowering the private and non-profit sectors. Significant initiatives under Vision 2030 are aimed at developing promising sectors, attracting investment, stimulating local industries, and expanding non-oil exports.

Noteworthy progress has been made in boosting tourism and entertainment, bolstered by the Public Investment Fund and national development funds, which are driving robust and sustainable growth in non-oil sectors and positioning the Kingdom for long-term economic resilience.

To support stability and balance in oil markets, Saudi Arabia and OPEC+ have implemented a reduction in oil supplies, bringing the Kingdom’s average production from the beginning of FY2024 until the end of July to 8.96 million barrels per day.

According to the ministry, OPEC+ countries have established a new production agreement for FY 2025, effective from January to December.

Several member nations, including Saudi Arabia, Russia, and the UAE, have agreed to extend voluntary production cuts. This includes a reduction of 1.65 million bpd, initially announced in April 2023 and now extended until December 2025, as well as an additional cut of 2.2 million bpd extended until November 2024.

The ministry noted that these reduced quantities will be gradually restored on a monthly basis until November 2025, with adjustments made according to market conditions to ensure stability.

The real GDP is expected to grow by 0.8 percent in 2024, supported by a projected growth of approximately 3.7 percent in non-oil activities, according to the official data.

Private consumption increased by 2.4 percent in the first half of 2024, fueled by growth in wholesale and retail trade, as well as restaurants and hotels. The facilitation of visit visa procedures and the expansion of eligible categories have also boosted visitor numbers to entertainment, cultural events, and tourist destinations.

The average consumer price index rose by 1.6 percent from the beginning of 2024 to August, compared to the same period last year. Preliminary forecasts suggest the consumer price index will reach approximately 1.7 percent for the entire year.

The Kingdom has maintained acceptable inflation levels relative to global standards, owing to ongoing improvements in economic conditions and proactive government measures to control rising prices, including price ceilings for gasoline and enhancements in food supply.

Financing plans

Saudi Arabia’s robust fiscal position, characterized by strong financial reserves and manageable public debt, enables the Kingdom to effectively navigate potential economic shocks and secure financing across the short, medium, and long term.

The Ministry of Finance, through the National Debt Management Center, develops an annual borrowing plan aimed at ensuring debt sustainability, diversifying financing sources, and accessing global markets. This strategy aligns with Saudi Vision 2030, promoting growth in the financial sector and deepening the domestic debt market.

The Kingdom is expanding its financing channels through bonds, sukuk, and loans, while also working to enhance its sovereign credit rating.

According to the ministry, controlled debt growth supports expansionary spending necessary to achieve Vision 2030 objectives, ensuring fiscal sustainability and resilience against future challenges.

Fitch Ratings reaffirmed Saudi Arabia’s A+ rating with a stable outlook, while Moody’s maintained its A1 rating with a positive outlook. Additionally, S&P Global Ratings upheld its A rating for the Kingdom, upgrading its outlook from stable to positive.

These ratings reflect the country’s ongoing economic transformation, driven by structural reforms and fiscal policies that prioritize sustainability and efficient financial planning.


Saudi Arabia set to unveil new tourist destinations in 2025: ASFAR CEO

Saudi Arabia set to unveil new tourist destinations in 2025: ASFAR CEO
Updated 30 September 2024
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Saudi Arabia set to unveil new tourist destinations in 2025: ASFAR CEO

Saudi Arabia set to unveil new tourist destinations in 2025: ASFAR CEO

DUBAI: The Public Investment Fund subsidiary ASFAR is set to launch new tourist attractions by early next year, reinforcing its commitment to economic growth and diversification, according to CEO Fahad bin Mushayt.

In an interview with Arab News during the Future Hospitality Summit in Dubai, Bin Mushayt said that the latest destination will debut in Al-Baha by the beginning of next year.

ASFAR, which has been operational for nearly two years, is collaborating with investors to enhance the Kingdom’s tourism sector by focusing on eight key destinations aligned with the Ministry of Tourism’s strategy.

While ASFAR does not directly develop these projects, it leverages its robust investment strategies and tourism expertise to partner with other companies, creating new opportunities in the sector. Among its projects are locations in Hail, Al-Baha, Yanbu, Al Hasa, Taif, and Al Jouf.

“Since we started, we are now active in five destinations,” the CEO stated.

In Al-Baha, ASFAR is developing two resorts, with a soft opening anticipated in the first quarter of 2025.

He said the company is “building almost 150 keys across two distinct locations, each offering unique experiences.” The top executive said one “caters to parents and couples, while the other targets the youth with an adventure park combined with hospitality.”

Describing Al-Baha as a “beautiful destination atop the mountains, known for its greenery and mild climate averaging around 20 degrees year-round.”

Bin Mushayt also highlighted plans for Taif, located two hours from Al-Baha, focusing on religious tourism due to its proximity to Makkah.

“We’re targeting religious tourism by building a wellness resort, allowing visitors to reaffirm their spiritual needs while enjoying the local scenery and mountains, just 30 to 40 minutes from Makkah,” he elaborated.

In Yanbu, a coastal city on the Red Sea about two hours from Jeddah, additional developments include a lifestyle hotel, beach club, beach resort, and tourism center featuring food and beverage options, retail, a diving academy, and marine activities. “Yanbu is known as one of the best diving areas in the world,” Bin Mushayt noted.

Further projects are also underway in Al Hasa and Hail, scheduled to open in 2025 and 2026.

Tourism is a key component of Saudi Arabia’s Vision 2030, aimed at diversifying the economy beyond oil revenues.

Bin Mushayt highlighted the sector's growth, stating, “Tourism is currently growing at nearly double-digit rates, contributing significantly to the GDP.”

ASFAR’s initiatives also aim to create jobs and stimulate the overall economy, with aspirations of generating around 250,000 jobs in the tourism sector by 2030.

The company is also investing in transportation, casual dining, and the development of destination management and tour operator companies to enhance visitor experiences.

Bin Mushayt emphasized the importance of local content and community involvement in these projects. “We prioritize using local materials and supporting small and medium enterprises within the destinations,” he said.

He further noted that “many family-oriented products and services will also be offered,” driving economic activity and development through tourism.

Expressing enthusiasm for Saudi Arabia’s goal of attracting 150 million annual visitors, he stated that ASFAR aims to welcome at least 5 million visitors to its destinations.


Millennium Hotels and Resorts eyes expansion across Saudi Arabia

Millennium Hotels and Resorts eyes expansion across Saudi Arabia
Updated 30 September 2024
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Millennium Hotels and Resorts eyes expansion across Saudi Arabia

Millennium Hotels and Resorts eyes expansion across Saudi Arabia

DUBAI: Millennium Hotels and Resorts is actively negotiating with multiple owners to expand its presence in Saudi Arabia, with plans to enter Riyadh soon and explore opportunities in other key cities beyond the major ones.

In an interview with Arab News at the Future Hospitality Summit in Dubai, COO William Harley-Fleming expressed the company’s intent to diversify its portfolio by tapping into the resort market, targeting key destinations and landmark projects across the Kingdom and the broader Middle East.

“We’re in discussions with several owners to explore how we can add value in regions of the Saudi market. As you know, Saudi Arabia is not just about Riyadh and Jeddah,” Harley-Fleming stated. “We’d like to get something in Riyadh, and we hopefully will have something there very soon, but we are also looking at other key cities within the Kingdom, which are just as important as the capitals.” 

Currently, Millennium operates a Grand Millennium hotel in Saudi Arabia but plans to introduce more of its 11 other brands, particularly its lifestyle-oriented social brand. “I think the Kingdom itself has been flooded with opportunities, but for us, it’s about having the right brand, with the right owners in the right locations. That’s why we believe the social brand is due for more than just midscale brands. We see opportunities now to develop that in some of the key locations,” he noted.

Harley-Fleming also announced plans for a new Copthorne hotel in Jeddah, set to open next year, which will be their second property in the city following the Millennium Hotel launched this year. The company is also in talks to introduce additional brands in Jeddah and expand to other areas.

“The development plan and growth plans are important to us, and we want to be part of that. I think the F&B scene is something that has really improved a lot within the Saudi market, and I think this is really a close collaboration with the tourism authorities and the government of Saudi (Arabia),” he said.

He revealed ongoing discussions with the government to expand into key locations that are considered secondary but are still attractive, such as Tabuk, Jazan, and Hail — regions outside of major cities that are seeing substantial development and interest.

“We’ve seen a big influx of not only consultants to the area but also people who want to experience Saudi Arabia itself. That’s why we want to see more of these remote locations, as we believe there’s so much more to offer in the Kingdom,” Harley-Fleming emphasized.

He added: “It’s not just about beaches and deserts; there’s so much more to offer. That's what we want to do — the cultural and heritage side. That’s where I think definitely a brand like ours ties in well because we work closely with the owners to make sure that anybody visiting their hotels also gets that element of localization.”

Millennium Hotels also supports the Saudization program, which promotes employing local talent, reinforcing its commitment to the country’s social and economic goals. Harley-Fleming noted plans to hire more Saudis to enhance the authentic Saudi experience for visitors.

As the Kingdom opens up to international tourism, the company aims to immerse guests in Saudi culture through language, local traditions, and cuisine. For instance, they plan to offer local honey and dates from nearby farmers in hotel lobbies.

Harley-Fleming underscored that localization is part of a broader sustainability initiative, which includes supporting local businesses and integrating cultural elements into the guest experience.


Rotana expands into Saudi Arabia’s secondary and tertiary cities

Rotana expands into Saudi Arabia’s secondary and tertiary cities
Updated 30 September 2024
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Rotana expands into Saudi Arabia’s secondary and tertiary cities

Rotana expands into Saudi Arabia’s secondary and tertiary cities

DUBAI: Rotana Hotels is set to expand its footprint in Saudi Arabia by establishing hotels in secondary and tertiary cities over the next two years.

CEO Philip Barnes outlined plans for nine additional hotels, reflecting a strategic shift toward less explored locations in the Kingdom.

“We’re looking to grow by probably another nine hotels over the course of the next two years,” Barnes shared with Arab News at the Future Hospitality Summit in Dubai, emphasizing the brand’s commitment to smaller, developing cities.

Barnes highlighted recent openings, including an Edge hotel in Riyadh and a new property in Madinah, but noted the focus is now on expanding into areas often overlooked by international chains. “We’re moving into what I would consider to be more tertiary and secondary cities within Saudi, which for us is tremendous because that’s what we want to be — a strong regional brand,” he explained.

While the specific locations of the new hotels are not yet disclosed, discussions with various developers and owners are in progress. This local-centric expansion aligns with Rotana’s deep regional roots. “We were born in the region. We’ve grown up in the region. We are the region,” Barnes stated, emphasizing the brand’s understanding of local culture as a key advantage.

“There’s a familiarity with owners and developers. We come in with a perspective unique to the region, not influenced by American, British, or French models,” he added. This cultural awareness is crucial for developers, as Rotana’s insights into local markets enhance their comfort level. “We know how things work in the region, and that’s become more important for a lot of developers,” Barnes noted.

As Saudi Arabia positions itself on the global tourism map, Barnes sees the country rapidly emerging as a key player in the hospitality sector. He reflected on the improvements in accessibility and infrastructure since his earlier experiences in the Kingdom. “Back in 2019, I had to go to the embassy to get a visa. Now, the visa is automatically online. The whole transition is becoming easier,” he remarked.

Saudi Arabia is making strides to establish itself as a world-class destination, boasting a rich cultural heritage, which is vital for attracting international visitors. Barnes shared his impressions of Riyadh’s transformation: “Driving down the street at 10 at night in Riyadh, I could have been anywhere in the world. The streets were packed, the restaurants were busy. There was life, energy, and passion.”

This vibrancy, combined with a strategic push to showcase cultural heritage, is driving investment and tourism. “People are getting a lot more comfortable with Saudi. It has the history, it has the culture. As Saudi (Arabia) puts itself more on the world stage, you’re going to see more of that,” he explained.

Barnes compared Saudi Arabia’s growth to that of successful tourism destinations in the past, noting a similar pattern emerging in the Middle East. “People are looking for new and interesting places that have culture and history, and Saudi has all of that to offer,” he remarked, predicting that Saudi (Arabia) will make a significant impact on the global tourism landscape in the next few years.

Looking forward, Barnes acknowledged the increasing role of technology and artificial intelligence in hospitality, while underscoring the importance of human interaction.

“AI is becoming more prominent. We’ve appointed a CIO who is well-versed in AI and is looking at how we can enhance the guest experience,” he noted, highlighting the use of AI for streamlining processes like booking and customer service. However, he stressed that technology cannot replace the personal touch.

“The hospitality industry is about people. AI can’t replace the doorman who gives you a warm smile and greets you by name. It’s the human touch that makes you feel special, and AI won’t do that,” Barnes concluded.

As Rotana advances its expansion plans in Saudi Arabia, the company’s deep understanding of local markets and commitment to guest experience positions it well to benefit from the country’s tourism boom, playing a central role in the rapidly growing hospitality sector.