OPEC+ doing ‘noble’ job of balancing oil market, says UAE

OPEC+ doing ‘noble’ job of balancing oil market, says UAE
Suhail Al-Mazrouei. AFP/File
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OPEC+ doing ‘noble’ job of balancing oil market, says UAE

OPEC+ doing ‘noble’ job of balancing oil market, says UAE

FUJAIRAH: UAE Energy Minister Suhail Al-Mazrouei said on Wednesday OPEC+ was doing a noble job of balancing the oil market even if does not produce the majority of oil in the world.

“OPEC+ has sacrificed more than others but the critical element is that it is staying together,” Mazrouei said at an industry event in the emirate of Fujairah.

“I would like you to imagine the world without this group. We would be in chaos,” Mazrouei said speaking hours before a planned virtual meeting of an OPEC+ committee.

His comments echo those of Russian Deputy Prime Minister Alexander Novak who said on Monday that OPEC+ was strategically reducing oil supply and ceding market share with a long-term aim that producing countries secure enough investments and oil prices to suit producers and consumers.

Output from OPEC+, which groups OPEC and allies such as Russia, equates to 48 percent of world oil supply, according to Reuters calculations based on figures from the International Energy Agency.

Mazrouei would not comment on the outlook for oil in 2025, saying that there were many moving parts, including geopolitics.

Oil prices jumped by over a dollar on Wednesday due to rising concerns Middle East tensions could escalate, potentially disrupting crude output from the region, following Iran’s biggest military blow against Israel to date. Brent crude stood at $74.56 a barrel at 6:30 a.m. Saudi time.

“I would refer you to the OPEC outlook because I stopped personally commenting on the short term,” the minister said.

“I think there are so many moving parts of the world, including geopolitics, that put us all on pause when we predict the future. We hope for peace, we hope for prosperity, but facts of life are facts of life.”

Ministers from OPEC+ will hold an online joint ministerial monitoring committee meeting on Wednesday at 3:00 p.m. Saudi time.

Oil prices have fallen in 2024, with Brent crude last month slipping below $70 a barrel for the first time since 2021, pressured by expectations of weaker global demand and rising supply outside OPEC+.

OPEC+ has cut output by around 5.7 percent of global demand in a series of steps agreed since late 2022.

The JMMC meeting on Wednesday is unlikely to recommend any changes to a current plan to start unwinding some cuts from December, five sources from the producer group told Reuters.

In September, OPEC+ agreed to delay a planned gradual oil output increase to December from October, saying it could further pause or reverse the hikes if needed. 


Oil Updates – prices jump more than $1 as Middle East tensions escalate

Oil Updates – prices jump more than $1 as Middle East tensions escalate
Updated 17 sec ago
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Oil Updates – prices jump more than $1 as Middle East tensions escalate

Oil Updates – prices jump more than $1 as Middle East tensions escalate

SINGAPORE: Oil prices jumped by over a dollar on Wednesday due to rising concerns Middle East tensions could escalate, potentially disrupting crude output from the region, following Iran’s biggest ever military blow against Israel.

Brent futures leapt $1.08, or 1.47 percent, to $74.64 a barrel, while US West Texas Intermediate crude spiked $1.12, or 1.6 percent, to $70.95 at 9:50 a.m. Saudi time. 

During trading on Tuesday, both crude benchmarks surged more than 5 percent.

Oil markets were largely focusing on the narrative of a weakening global economic outlook denting demand for fuel, said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“Still, the scale quickly turned toward fears of oil supply disruptions in the Middle East after Iran fired ballistic missiles at Israel,” Sachdeva said.

Iran said early on Wednesday that its missile attack on Israel was over barring further provocation, while Israel and the US promised to retaliate against Tehran as fears of a wider war intensified.

Tehran said any Israeli response to the attack, which Israel said involved more than 180 ballistic missiles, would be met with “vast destruction.”

The UN Security Council scheduled a meeting about the Middle East for Wednesday, and the EU called for an immediate ceasefire.

The direct involvement of Iran, an OPEC member, raises the prospect of disruptions to oil supplies, ANZ analysts said in a note, adding that the country’s oil output rose to a six-year high of 3.7 million barrels per day in August.

“A major escalation by Iran risks bringing the US into the war,” Capital Economics said in a note. “Iran accounts for about 4 percent of global oil output, but an important consideration will be whether Saudi Arabia increases production if Iranian supplies were disrupted.”

A panel of ministers from the OPEC and allies, together called OPEC+, meets later on Wednesday to review the market, with no policy changes expected. From December, OPEC+, which includes Russia, is set to raise output by 180,000 barrels per day (bpd) monthly.

“Any suggestion that production hikes will proceed could offset concerns of supply disruptions in the Middle East,” ANZ’s note said.

US stockpile data was mixed: crude oil and distillate inventories fell last week while gasoline inventories rose, market sources said, citing American Petroleum Institute figures on Tuesday.

Oil investors will also be closely watching Friday’s US jobless claims data as it is expected to influence projections of the Federal Reserve’s monetary easing, which may aid long-term oil demand by stimulating overall economic activity, Phillip Nova’s Sachdeva said. 


Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs
Updated 01 October 2024
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Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

RIYADH: Interest rate cuts and their impact on the global and Saudi economies were a central focus of discussions during a virtual meeting of the Council of Economic and Development Affairs. 

A report from the Ministry of Economy and Planning on the international economic outlook for September highlighted how reductions in interest rates have affected major and emerging economies, with specific implications for the Kingdom, as reported by the Saudi Press Agency.

The council also reviewed the quarterly Vision 2030 performance report, presented by the Strategic Management Office, which outlined significant accomplishments in the three pillars of the undertaking: a vibrant society, a thriving economy, and an ambitious nation. The study showcased the continued progress made during the second quarter of this year.

Additionally, the National Center for Performance Management, also known as Adaa, presented its findings on public sector performance, focusing on efforts to support government agencies in meeting their targets.

Strategies for improving future performance and enhancing government effectiveness were also discussed.

Additional reports reviewed by the council included an analysis of consumer and wholesale price indices for July and a summary of Saudi Arabia’s trade performance for June.

“The council made decisions and recommendations based on these insights, furthering the Kingdom’s commitment to economic growth and development,” according to SPA.

Key indicators of progress toward Vision 2030 include a drop in the Saudi nationals’ unemployment rate to 7.1 percent in the second quarter of 2024, the lowest in the country’s history, nearing the 7 percent Vision 2030 target. 

Foreign direct investment inflows reached approximately SR19.4 billion ($5.1 billion) in the three months to the end of June, with a net inflow of SR11.7 billion, marking a 23.4 percent increase from the first quarter.

Non-oil exports also grew significantly, rising by 19 percent in July compared to the same period in 2023, reflecting Saudi Arabia’s efforts to diversify its economy. 

The Ministry of Justice exceeded its e-services target, reaching 108 percent in the second quarter of 2023, while public sector performance in achieving Vision 2030 goals hit 83 percent.

Eight years since its launch, the social reform and economic diversification blueprint is quickly fulfilling its promise, with 87 percent of its 1,064 initiatives deemed completed or on track.

By the end of 2023, some 197 of Vision 2030’s 243 key performance indicators had been fully achieved. Of those, 176 exceeded their targets. 

A similar trend is evident across various socio-economic domains, prompting the nation to reconsider and set higher ambitions and targets for 2030. 


RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA
Updated 01 October 2024
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RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

DUBAI: A new wellness-focused Ritz-Carlton destination is set to open in Saudi Arabia as Red Sea Global inked a strategic agreement with Marriott International.     

The new destination will be part of the luxury wellness spot AMAALA development and marks the fourth collaboration between the two organizations.     

Scheduled to open in 2025, the Ritz-Carlton will be situated at the northernmost point of Triple Bay, a key area within the AMAALA project.     

The new property will feature 391 guestrooms, with 80 percent of these offering water-facing views, alongside a mix of Marina Village, sea, and mountain views.     

In an interview with Arab News during the Future Hospitality Summit in Dubai, Lindsay Madden-Nadeau, senior director of wellness strategy at Red Sea Global, emphasized the importance of collaboration in shaping the wellness portfolio of the AMAALA project.     

“We’re constantly looking at different brands and experiences that will help enhance and leverage our already existing wellness portfolio,” Madden-Nadeau said. “I think the power of collaboration goes a long way these days,” she added.     

The new destination's design, created by Foster + Partners, seeks to blend in with the natural sand dune landscape, which has been preserved to offer shaded areas. The resort is designed to provide various views of the sea from multiple locations.   

The announcement builds on recent partnership successes, including the opening of the St. Regis Red Sea Resort and Nujuma, a Ritz-Carlton Reserve, as well as the signing of The Red Sea EDITION.     

The new resort’s architecture will reflect the local design influences of Al Wajh, a nearby seaside town, and will incorporate elements of traditional craftsmanship, blending them with contemporary features.     

Madden-Nadeau highlighted the unique position of AMAALA as a destination and how each operator brings a distinctive advantage to the location.     

The new Ritz-Carlton will include a range of leisure and wellness amenities, such as multiple culinary venues, including sunset-facing restaurants, a spa, fitness and recreational centers, adult and family pools, and a rock pool.   

The property will offer expansive event facilities, including a ballroom and meeting spaces capable of accommodating up to 1,500 guests, suitable for weddings, conferences, and corporate events.     

The AMAALA project is focused on delivering a wellness and luxury tourism experience, with the first phase of the Triple Bay masterplan set to welcome its guests in 2025.     

This initial phase will include eight resorts with over 1,400 hotel keys. Once complete, AMAALA will encompass more than 4,000 hotel rooms across 30 hotels, in addition to approximately 1,200 luxury residential units, including villas, apartments, and estate homes, alongside retail, dining, and recreational facilities.     

Madden-Nadeau also spoke about the upcoming additions to their wellness offerings. “In general, over the next six months, we hope to be able to announce three additional brands. Two of them will be dedicated wellness operators that really complement the already existing assets and operators that are there,” she said.     

“We’re also looking at developing our own wellness brand, and we’re in exploratory phases of that right now. And we have another asset that we’re working on, something that’s new to the market, something that’s a bit disruptive, and so we’re exploring that as well,” she added.


Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 

Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 
Updated 01 October 2024
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Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 

Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 

RIYADH: Saudi Arabia’s assets under management are expected to reach $300 billion within the next two years, driven by regulatory reforms and expanding equity and debt capital markets, according to Fitch Ratings. 

In its latest report, the credit rating agency stated that AUM in the Kingdom’s asset management industry grew by 13.5 percent year on year by the end of the first half of 2024, surpassing $250 billion. 

The growth of the asset management industry, or AMI, in the second half of this year and in 2025 will be fueled by an increasing number of high-net-worth individuals seeking these services in Saudi Arabia. 

The Kingdom has the largest AMI in the Gulf Cooperation Council region and ranks fifth among countries in the Organization of Islamic Cooperation. Fitch further noted that Saudi Arabia is the second-largest public Islamic funds market globally. 

Bashar Al-Natoor, global head of Islamic Finance at Fitch Ratings, said: “We expect Saudi Arabian AUM to cross $300 billion within a couple of years, driven by Vision 2030’s Financial Sector Development Program. There is strong demand for Islamic products, with around 95 percent of mutual funds being shariah-compliant.”  

He added: “The industry’s AUM reached 22 percent of gross domestic product in 2023, with private funds three times larger than public funds. Saudi bank-affiliated managers held 63 percent of industry revenues, but competition from international managers is rising as the government attracts them to Saudi Arabia.” 

According to the report, the net income of all capital market institutions increased by 29 percent year on year to $1.1 billion in the first half of 2024. 

Fitch also noted that private funds’ AUM has doubled since 2020, with 43 percent allocated to equities and 40.5 percent to the real estate sector. 

About 28 percent of public funds are invested in money markets, followed by equities at 25.6 percent, Real Estate Investment Trusts at 18.7 percent, and debt at 16 percent. 

The report concluded that rising initial public offerings and the improving performance of the Tadawul All Share Index are attracting equity funds to the Kingdom. 

In April, Abdullah bin Ghannam, deputy for listed companies and investment products at Saudi Arabia’s Capital Market Authority, highlighted the significant growth in the AMI. 

He noted that asset management activity revenues for capital market institutions in Saudi Arabia reached $1.12 billion in 2023, reflecting a 58.6 percent increase over the past four years. 


Arab countries urged to adopt decisive policies amid economic challenges

Arab countries urged to adopt decisive policies amid economic challenges
Updated 01 October 2024
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Arab countries urged to adopt decisive policies amid economic challenges

Arab countries urged to adopt decisive policies amid economic challenges

RIYADH: The global economy presents promising growth opportunities, but emerging challenges could disrupt predictability, complicating the landscape for investors and policymakers, according to the Saudi Central Bank governor. 

Addressing the opening session of the 48th Council of Governors of Arab Central Banks and Monetary Authorities in Cairo, Ayman Al-Sayari emphasized the need for collaborative efforts to navigate ongoing economic turbulence. 

He acknowledged the crucial role central banks play in managing monetary policies amid shifting global dynamics, particularly regarding inflation, debt management, and evolving financial technologies.  

“The recent interest rate cuts by several central banks signal the start of a monetary easing cycle. This is expected to gradually reduce borrowing costs and public debt risks, while also stimulating investment and enhancing economic activity,” he said in his address. 

He noted that recent years have seen the Saudi economy experience accelerating growth, driven by significant transformation and economic diversification efforts. 

“In this context, Saudi Arabia continues to uphold a balanced and robust economy that can absorb external shocks, even as many economies worldwide are affected by external factors and geopolitical tensions,” added Al-Sayari. 

These issues were further emphasized by Fahad Al-Turki, director general and chairman of the board of directors of the Arab Monetary Fund, who noted that the region’s unemployment rate was alarmingly high at 10.9 percent by the end of last year — double the global average, according to World Bank figures. 

He underscored the importance of adopting policies that would address this issue and meet the economic aspirations of the region’s populations. 

He also pointed out that rising debt levels remain a significant concern for Arab economies in light of current global conditions, emphasizing the need for effective debt management to ensure sustainable financial health. 

Despite these challenges, Al-Turki expressed optimism for the future, citing AMF projections that predict an improvement in the region's economic growth rate. 

The Arab economies are expected to grow by 2.8 percent this year, with a forecasted rise to 4.5 percent in 2024, compared to a modest 0.3 percent growth last year. 

Inflation, which remains a concern, is also expected to decrease over the next two years. The AMF anticipates inflation across Arab countries to drop from 13.2 percent last year to around 11 percent in 2023, and further to 7.8 percent in 2024. 

However, these projections exclude certain Arab nations experiencing extraordinary inflation due to internal challenges. 

Al-Turki noted that financial safety indicators in the Arab region show an average capital adequacy ratio of 17.4 percent by the end of last year — well above the Basel III requirements. 

Additionally, liquid assets made up 34 percent of total assets in the sector, while loan provisions covered over 90 percent of non-performing loans in Arab banks. 

On the technology front, he pointed out that opportunities presented by artificial intelligence offer significant potential for Arab countries but stressed the need for robust regulations and risk management frameworks to fully harness its benefits. 

He called for enhanced economic resilience across Arab nations to better withstand potential global shocks.