Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes

Update Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes
Brent crude oil futures lost 93 cents, or 1.23 percent, to $74.70 a barrel by 5:15 p.m. Saudi time. Shutterstock Shutterstock
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Updated 08 November 2024
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Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes

Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes

LONDON: Oil prices fell on Friday on receding fears over the impact of Hurricane Rafael on oil and gas infrastructure in the US Gulf while investors also weighed up fresh Chinese economic stimulus.

Brent crude oil futures lost 93 cents, or 1.23 percent, to $74.70 a barrel by 5:15 p.m. Saudi time. US West Texas Intermediate crude was down $1.05, or 1.45 percent, at $71.31.

The benchmarks have reversed Thursday’s gains of nearly 1 percent, but Brent and WTI are still on track to finish 2 percent up over the week, with investors also examining how US President-elect Donald Trump’s policies might affect oil supply and demand.

Hurricane Rafael, which has caused 391,214 barrels per day of US crude oil production to be shut in, is forecast to weaken and move slowly away from US Gulf coast oilfields in the coming days, the US National Hurricane Center said.

Downward price pressure also came from data showing crude imports in China, the world’s largest oil importer, fell 9 percent in October — the sixth consecutive month to show a year-on-year decline.

“The weakening of oil imports in China is due to weaker demand for oil as a result of the sluggish economic development and rapid advance of e-mobility,” said Commerzbank analyst Carsten Fritsch.

China kicked off a fresh round of fiscal support on Friday, announcing a package that eases debt repayment strains for local governments.

The nation’s economy has faced strong deflationary pressures in the face of weak domestic demand, a property crisis and mounting financing strains on indebted local governments, limiting their investment capability.

“There were no additional stimulus measures targeting domestic demand, hence the disappointment weighing on prices,” UBS analyst Giovanni Staunovo told Reuters.

Prices had risen on Thursday on expected actions by the incoming Trump administration, such as tighter sanctions on Iran and Venezuela, which could limit oil supply to global markets.

“In the short-term, oil prices might rise if the new President Trump is quick on the draw with oil sanctions,” said PVM analyst John Evans.

US Federal Reserve Chair Jerome Powell said on Thursday that Trump’s proposed policies of broad-based tariffs, deportations and tax cuts would have no near-term impact on the US economy, but the Fed would begin estimating the impact of such policies on its goals of stable inflation and maximum employment.

The Fed cut interest rates by a quarter of a percentage point on Thursday.


Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent

Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent
Updated 7 min 3 sec ago
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Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent

Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent

RIYADH: Around 102,000 students in Saudi Arabia will learn Chinese annually in public schools, while three new institutions for the gifted will open as part of the Kingdom’s 2025 education plans. 

According to the Ministry of Finance’s budget report, the education sector has been allocated SR201 billion ($53.50 billion), representing 16 percent of the government’s expenditures for the coming year. 

According to Mansoor Ahmed, an independent adviser in various sectors including education: “Saudi Arabia’s higher education sector is the largest individual education market across the Arabian Gulf region with a staggering 2 million students enrolled in 2022.”

He said: “Notably, 95 percent of these students are enrolled in public and semi-public institutions, underlining a significant reliance on the public sector for higher education. This reliance is attributed to the perception of higher quality and job prospects offered by public institutions.”

According to Ahmed, the government’s funding allocation for this sector is expected to shift higher education demand towards fields like AI, robotics, and renewable energy, while focusing more on R&D to address skills gaps and align education with job market needs.

This funding aims to promote comprehensive education, enhance learning within families and communities, and equip individuals with the skills necessary for national development and workforce readiness. 

It was announced in September that Saudi Arabia had begun teaching the Chinese language to primary and middle school students to equip learners with valuable skills and promote cultural appreciation. 

Pupils are now learning Mandarin, with 175 educators teaching the language as part of an agreement between the Kingdom and China. The program aims to improve job prospects and academic opportunities, particularly for those interested in studying at Chinese universities.

The initiative aligns with Saudi Vision 2030 and China’s growing global influence, further strengthening the trade and cultural ties between the two nations, according to the Ministry of Education. 

The program started with pilot schools and will gradually expand to include high school students by 2029. Educators from both nations view the initiative as a “win-win,” promoting cultural exchange and enhancing communication between the two countries.

Key projects for Saudi Arabia’s education sector in 2025, as mentioned in the Kingdom’s budget for the coming fiscal year, include increasing kindergarten enrollment to 40 percent to help achieve the Vision 2030 target of 90 percent while addressing the need for specialized teaching staff. 

There are also plans to expand enrollment for students with disabilities and build sports halls for girls in public schools. 

According to Ahmed: “In Saudi Arabia, approximately 293,000 children are identified with various disabilities. The National Transformation Program 2020 aims to ensure that 200,000 children with disabilities aged 6-18 would benefit from specialized education programs and support services.”

Ahmed noted that under the Rights of Students with Disabilities and Equal Participation in Education or RSEPI, all children with disabilities in Saudi Arabia are guaranteed free and appropriate education, encompassing individual education plans, early intervention programs, and transition services.

He also highlighted the increasing private sector interest in this area, exemplified by Amanat’s acquisition of a 60 percent stake in the Human Development Co. for SR220.3 million. 

The company is a major provider of special education and care services in the Kingdom, operating nine schools, 22 daycare centers, and rehabilitation clinics across six provinces.

The Kingdom aims to raise the percentage of accredited training institutions to 39 percent while establishing three new academic facilities dedicated to nurturing gifted students in areas such as sports and technology, with one school set to open in Riyadh. 

Saudi Arabia’s focus on education and the significant investment in this sector reflects its commitment to diversifying its economy and empowering its youth to contribute to the Kingdom’s future growth. 

This emphasis on education is driven by the country’s long-term Vision 2030 goals, which seek to transition away from oil dependency and create a knowledge-based economy. 

Saudi Arabia has recognized that education plays a central role in shaping the future of its citizens, particularly the younger generation. This has led to a series of reforms aimed at improving the quality of schooling, increasing access to education, and fostering specialized skills. 

As the Kingdom seeks to boost industries beyond oil, there is a clear need for a skilled workforce in technology, renewable energy, healthcare, and entertainment sectors. 

The Saudi government has also been encouraging international collaboration in the education sector to enhance its global competitiveness. For example, opening branches of prestigious universities, such as Arizona State University, is part of a larger strategy to elevate the country’s standing in the global education rankings. 

This is intended to provide students with access to world-class education and attract international talent to the Kingdom.

Main 2024 achievements for education sector 

The Ministry of Finance’s budget report shows that the significant investment in the Kingdom’s education sector has played a key role in the sector’s notable achievements. 

For instance, three Saudi universities have now ranked among the top 200 globally, with King Saud University advancing into the top 100 in the prestigious Shanghai rankings.

In addition, the percentage of higher education graduates entering the workforce within six months of graduation has increased to 43 percent, a jump from 32 percent in 2023, highlighting the country’s efforts to improve job readiness among graduates. 

Saudi Arabia is also enhancing its educational institutions’ credibility, with four training facilities receiving institutional accreditation to support the Human Capability Development Program and raise the overall national education standard. 

On the infrastructure front, three Saudi cities—Madinah, Al-Ahsa, and King Abdullah City in Thuwal—have been included in UNESCO’s Network of Learning Cities. 

These cities aim to foster a more holistic and inclusive learning environment, offering educational opportunities for all ages and helping to equip citizens with the necessary skills for national development and workforce participation. 

Furthermore, Saudi Arabia is expanding its research and development capabilities with the establishment of 40 centers dedicated to innovation, technology, and creativity. 

These centers will promote research and entrepreneurship, fueling the growth of new ideas and inventions. In 2024, the Kingdom saw a 10 percent increase in the enrollment of gifted students, with 28,264 scholars now participating in the National Program for Gifted Identification. 

Additionally, the country achieved six international awards in areas such as technical activity, innovation, and education. 

In terms of physical infrastructure, Saudi Arabia is investing heavily in the construction of new educational facilities. A public-private partnership initiative is developing 30 schools in Madinah to create modern and efficient educational facilities. 

In November, PwC Middle East announced the acquisition of Emkan Education, a Saudi consultancy specializing in education and skills development advisory services. The partnership is seen as a significant step toward building a future-ready education system in the Kingdom. 

The acquisition adds Emkan’s experienced professionals, including three prominent Saudi female education leaders, to PwC’s Middle East schooling practice. 

This integration will strengthen PwC’s regional capabilities and support Saudi Arabia’s goal of fostering innovation, empowering citizens, and driving economic transformation.


S&P Global forecasts 4.7% GDP growth for Saudi Arabia in 2025

S&P Global forecasts 4.7% GDP growth for Saudi Arabia in 2025
Updated 28 November 2024
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S&P Global forecasts 4.7% GDP growth for Saudi Arabia in 2025

S&P Global forecasts 4.7% GDP growth for Saudi Arabia in 2025

RIYADH: S&P Global has projected steady growth for Saudi Arabia’s economy, forecasting a 0.8 percent gross domestic product increase in 2024 and a robust 4.7 percent in 2025. 

The agency’s adjustments to its earlier forecasts reflect a recalibration of oil production assumptions, now expected at 9.5 million barrels per day in 2025, down from 9.7 million.

The Kingdom’s non-oil sector continues to exhibit strong potential, supporting Saudi Arabia’s economic diversification efforts. 

S&P also anticipated low and stable inflation in the Kingdom, forecasting rates of 1.8 percent in 2024 and 1.7 percent in 2025, highlighting the country’s success in maintaining price stability amid global economic volatility. 

The agency reduced its real GDP growth forecasts for emerging markets by 10 basis points for both 2025 and 2026, now projecting growth rates of 4.3 percent and 4.4 percent, respectively.  

The Kingdom saw the largest downward revision for 2025, with a reduction of 60 bps, followed by Hungary and Mexico. 

“In Saudi Arabia, our revision reflects lower oil production assumptions than previously anticipated,” S&P stated. 

The report cited recent OPEC+ announcements and trends in global oil markets as factors behind the adjusted projections for Saudi oil output. 

S&P also revised its forecasts for other regions. South Africa’s GDP growth projections were raised to 1 percent in 2024 and 1.6 percent in 2025, driven by strong retail sales and a new pension scheme boosting household consumption. While infrastructure challenges remain, ongoing reforms could enhance long-term growth prospects. 

In Southeast Asia, S&P noted heightened uncertainty due to reliance on trade and slowing growth in China. 

However, domestic demand remains resilient, supported by sectors like IT, finance, and a recovering tourism industry. Manufacturing, particularly electronics, continues to perform well, and inflation is under control, enabling some central banks to ease monetary policy. 

S&P upgraded growth forecasts for Malaysia and Vietnam, citing strong electronics supply chains and resilient domestic demand. Vietnam also benefits from recovering financial and real estate sectors. India’s growth remains robust but is expected to moderate after April 2025 due to slowing consumer momentum and challenges in the rural economy. 

The Philippines is projected to see slightly slower growth due to softer consumption, though infrastructure investment will provide medium-term support. Indonesia and Thailand maintain stable outlooks, with emerging sectors like electric vehicles and fiscal stimulus driving development. 

S&P also highlighted downside risks to global growth, particularly from uncertainties in US trade policy under President-elect Trump.  

While the agency assumed a modest tariff increase between the US and China, it warned that more aggressive measures could significantly disrupt global trade and demand. 

Tariffs targeting additional countries could amplify these effects, increasing risk premia and tightening financial conditions for emerging markets, especially those with weaker fundamentals. 

Geopolitical risks remain elevated, particularly due to the Russia-Ukraine conflict, which has escalated with ballistic missile launches.

According to S&P, this uncertainty could heighten risk aversion toward emerging market assets and impact commodity prices.


Islamic banking in Kuwait and Oman stable amid favorable conditions: Fitch Ratings  

Islamic banking in Kuwait and Oman stable amid favorable conditions: Fitch Ratings  
Updated 28 November 2024
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Islamic banking in Kuwait and Oman stable amid favorable conditions: Fitch Ratings  

Islamic banking in Kuwait and Oman stable amid favorable conditions: Fitch Ratings  

RIYADH: The standalone credit profiles of Islamic banks in Kuwait are expected to remain stable in 2025, supported by favorable operating conditions, according to a recent analysis by Fitch Ratings. 

The report highlighted that Islamic banking remains a significant sector in Kuwait, accounting for 49 percent of total banking sector assets by the end of the first half of this year.  

This follows a similar forecast from Moody’s in September, which predicted faster growth for Islamic financing compared to conventional banking. Moody’s cited rising demand for Shariah-compliant products and the inherent stability of Islamic banks’ net profit margins as key drivers. 

Fitch Ratings noted that capital at Kuwaiti Islamic banks remains adequate, supported by moderate growth and steady profitability in 2024 and 2025. 

“As for conventional banks, we view Islamic banks’ profitability to have peaked, and we expect earnings to slightly decline in 2025 following expected rate cuts,” said Fitch Ratings.  

The credit rating agency noted that funding at Kuwaiti Islamic banks remains strong, with 80 percent sourced from customer deposits. 

The report also highlighted a slight increase in the average impaired financing ratio among Islamic banks in Kuwait, rising to 2 percent by the end of the first half, driven by pressure from higher rates and slower financing growth. 

“The average financing impairment charges/average gross financing ratio increased slightly in the first half of 2024 but remains well below the pandemic level. Relatively high real estate exposure and concentration are key risks to the bank’s asset quality. Fitch expects asset quality to be stable in 2024-2025,” added Fitch.  

Oman’s Islamic finance sector expanding 

In a separate report, Fitch Ratings indicated that Omani Islamic banks are benefiting from favorable economic conditions, improving asset quality, stable profitability, and reasonable liquidity.  

The total assets of Omani Islamic banks stood at $21.3 billion by the end of the third quarter of this year, with the Islamic banking sector holding a market share of 18.7 percent of the country’s total banking assets. 

Fitch pointed to several factors driving the growth of Islamic finance in Oman, including increasing public demand, deeper distribution channels, the use of sukuk by both the government and corporates, and regulatory initiatives. 

“The Central Bank of Oman addressed a structural gap in October 2024 with the introduction of the Bank Deposit Protection Law, which would protect Islamic banks’ deposits,” said Fitch. 

“We expect this will aid confidence in Oman’s Islamic banking sector as the previous deposits insurance scheme only covered conventional banks’ deposits,” it added.  

The report forecast that Oman’s Islamic finance sector will surpass $40 billion in the medium term, with Fitch estimating its total value at $30.9 billion by the end of September 2024. 

According to the analysis, the Omani debt capital market reached $45 billion in outstanding debt by the end of the third quarter. There is no expectation of a significant short-term surge, as the government continues to prepay more of its debt using the budget surplus generated by high oil prices. 

Fitch also highlighted Oman’s growing sukuk issuance, which increased by 86 percent year on year to $2 billion in the first nine months of 2024, outpacing conventional bond issuance, which rose 53 percent to $5.6 billion during the same period.  

Fitch stated: “The Omani Islamic finance sector remains one of the smallest in the GCC (Gulf Cooperation Council),” and pointed out that it continues to face several challenges. 

These challenges include “the lack of Islamic liquidity-management instruments and smaller capital bases compared to the conventional banks,” which, according to Fitch, “could restrict their involvement in major government financing projects.” 

However, Fitch emphasized the sector’s long-term growth potential, citing recent regulatory developments and Oman’s predominantly Muslim population as key factors supporting future expansion.


Saudi Aramco maintains propane, butane prices for December

Saudi Aramco maintains propane, butane prices for December
Updated 28 November 2024
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Saudi Aramco maintains propane, butane prices for December

Saudi Aramco maintains propane, butane prices for December

RIYADH: The Saudi Arabian Oil Co., also known as Saudi Aramco, kept its December contract prices unchanged month on month at $635 per tonne, according to an official statement

The company also maintained butane prices for the month at $630 per tonne.

Propane and butane are types of liquefied petroleum gas with different boiling points. LPG is commonly used as a fuel for vehicles, heating, and as a feedstock for various petrochemicals.

Aramco’s OSPs for LPG are used as a benchmark for contracts supplying the product from the Middle East to the Asia-Pacific region.

In winter, the demand for propane rises significantly due to its use in heating homes, which can lead to higher prices if supply struggles to keep up.

Such fluctuations are a normal part of the market and are expected during colder months. The increase in prices reflects the basic economic principle of supply and demand, with higher demand resulting in higher costs.


Mawani, Lloyd’s Register ink deal to streamline maritime operations

Mawani, Lloyd’s Register ink deal to streamline maritime operations
Updated 28 November 2024
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Mawani, Lloyd’s Register ink deal to streamline maritime operations

Mawani, Lloyd’s Register ink deal to streamline maritime operations

RIYADH: The Saudi Ports Authority has signed an agreement with the UK’s Lloyd’s Register to unify and streamline operational and maritime procedures across Saudi ports.

The deal is set to enhance efficiency by developing comprehensive manuals and guidelines, including quality and environmental procedure manuals that align with International Organization for Standardization standards, the Saudi Press Agency reported.

The collaboration aligns with Mawani’s efforts to improve operational excellence at ports and strengthen Saudi Arabia’s connectivity with global markets, thus boosting national exports. As part of the partnership, the Saudi Ports Authority aims to double the container throughput capacity at its ports, from 20 million containers to over 40 million.

This goal is part of Saudi Arabia’s broader vision to modernize its logistics infrastructure under the National Transport and Logistics Strategy, which targets increasing the sector's contribution to gross domestic from 6 percent to 10 percent.

The deal also seeks to define clear responsibilities through a code of good practices, ensuring compliance with updated International Maritime Organization agreements.

Additionally, the partnership will help secure international certifications such as ISO 9001:2015 for quality management and ISO 14001:2015 for environmental management, further enhancing operational efficiency, customer satisfaction, and sustainability practices.

As part of the cooperation, comprehensive training programs will be offered to port employees, including courses on ISO standards, maritime certifications, and the latest inspection and safety protocols. Digital solutions and cutting-edge technologies will also be integrated to support sustainable operations and improve overall port competence.

Lloyd’s Register, a renowned maritime classification society established over 260 years ago, is one of the most prestigious organizations in the global maritime sector. The company operates in 81 offices worldwide and serves over 40,000 clients across the maritime and logistics industries.