Oil Updates – prices climb after Israel strikes Gaza, truce talks continue

Brent crude futures were up 9 cents, or 0.11 percent, at $83.42 per barrel at 9:35 a.m. Saudi time. Shutterstock

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Updated 12 May 2024

Reuters

May 07, 2024 10:53

Oil Updates – prices climb after Israel strikes Gaza, truce talks continue

Updated 12 May 2024

Reuters

May 07, 2024 10:53

SINGAPORE: Oil prices edged higher on Tuesday after Israel struck Rafah in Gaza, while negotiations for a ceasefire with Hamas continued without resolution, according to Reuters.

Brent crude futures were up 9 cents, or 0.11 percent, at $83.42 per barrel at 9:35 a.m. Saudi time, while US West Texas Intermediate crude futures rose 7 cents, or 0.09 percent, to $78.55 a barrel.

“Oil prices opened up this morning, with some roadblocks in the ceasefire talks between Israel and Hamas leading market participants to price for geopolitical tensions to potentially drag for longer,” said Yeap Jun Rong, market strategist at IG.

Market participants will be looking ahead to upcoming US crude inventories data releases, Yeap added.

US crude oil and product stockpiles were expected to have fallen last week, a preliminary Reuters poll showed on Monday. The crude inventories could have on average fallen by about 1.2 million barrels in the week to May 3, based on analyst forecasts.

During the session, a stronger dollar capped gains in oil futures as it makes crude more expensive for traders holding other currencies. The dollar index, which measures the greenback against six major peers, was last up at 105.25.

Oil prices had settled higher on Monday, partially reversing last week’s declines. Both contracts had posted the steepest weekly losses in three months as the market focused on weak US jobs data and the possible timing of a Federal Reserve interest rate cut.

Palestinian militant group Hamas on Monday agreed to a Gaza ceasefire proposal from mediators, but Israel said the terms did not meet its demands and pressed ahead with strikes in Rafah while planning to continue negotiations on a deal.

Israeli forces struck Rafah on Gaza’s southern edge from the air and ground and ordered residents to leave parts of the city, which has been a refuge for more than 1 million displaced Palestinians.

The absence of a settlement between the parties in the now seven-month long conflict has supported oil prices, as investors worry regional escalation of the war will disrupt Middle Eastern crude supplies.

Saudi Arabia’s move to raise the official selling prices for its crude sold to Asia, Northwest Europe and the Mediterranean in June also supported prices, signalling expectations of strong demand this summer.

The world’s top exporter hiked its flagship Arab Light crude oil price to Asia to $2.90 a barrel above the Oman/Dubai average in June, the highest since January and at the upper end of traders’ expectations in a Reuters survey.

Topics: energy Oil OPEC

EBRD supports Africa’s largest onshore wind project in Egypt with $275m loan

Updated 57 min 38 sec ago

MOHAMMED AL-KINANI

December 24, 2024 14:35

EBRD supports Africa’s largest onshore wind project in Egypt with $275m loan

1.1 GW wind farm in Egypt will reduce annual CO2 emissions by more than 2.2 million tonnes
Loan to Suez Wind consists of $200 million A loan from the EBRD and $75 million in B loans from Arab Bank and Standard Chartered

Updated 57 min 38 sec ago

MOHAMMED AL-KINANI

December 24, 2024 14:35

JEDDAH: The European Bank for Reconstruction and Development is supporting Egypt in launching Africa’s largest wind farm, backed by a $275 million syndicated loan.

The loan to Suez Wind consists of a $ 200 million A loan from the EBRD and $ 75 million in B loans from Arab Bank and Standard Chartered, the international financial institution said in a press release.

It added that the initiative is being co-financed by the African Development Bank, British International Investment, and Deutsche Investitions- und Entwicklungsgesellschaft, as well as the OPEC Fund for International Development and the Arab Petroleum Investments Corporation.

The wind farm in the Gulf of Suez will have an installed capacity of 1.1 gigawatts, delivering clean, renewable energy at a lower cost than conventional power generation. It is expected to produce over 4,300 GWh of electricity annually and reduce CO2 emissions by more than 2.2 million tons per year, supporting Egypt’s energy sector alignment with its commitments under the Paris Agreement.

Rania Al-Mashat, Egypt’s minister of planning, economic development, and international cooperation, said that her country is committed to advancing its renewable energy ambitions, aiming to derive 42 percent of its energy mix from renewable sources by 2030, in line with their nationally determined contributions.

“Through our partnership with the EBRD, a key development partner within the energy sector of Egypt’s country platform for the NWFE program, we are mobilizing blended finance to attract private-sector investments in renewable energy,” said Al-Mashat, who also serves as governor of the north African country to the EBRD

The minister added: “So far, funding has been secured for projects with a capacity of 4.7 gigawatts, and we are working collaboratively to meet the program’s targets to reduce Egypt’s fuel consumption and expand clean energy projects.”

Managing Director of the EBRD’s Sustainable Infrastructure Group, Nandita Parshad, expressed pride in the bank’s role as the largest financier of the landmark 1,100-megawatt wind farm in the Gulf of Suez, which is also the largest onshore wind farm in EBRD’s operational countries to date.

“Egypt continues to be a trailblazer for large-scale renewables in Africa: first with the largest solar farm and now the largest windfarm on the continent. Great to partner on both with ACWA power and to bring new partners in this project, Hassan Allam Utilities and Meridiam,” she said.

Suez Wind is a special project company jointly owned by Saudi energy giant ACWA Power and HAU Energy, a recently established renewable energy equity platform that the EBRD is investing in alongside Hassan Allam Utilities and Meridiam Africa Investments.

The EBRD, of which Egypt is a founding member, is the principal development partner in the republic’s energy sector under the Nexus of Water, Food, and Energy program, launched at COP27. This wind farm is one of the first projects within NWFE’s energy pillar, advancing progress toward the country’s 10-gigawatt renewable energy goal.

It plays a vital role in supporting Egypt’s efforts to decarbonize its fossil fuel-dependent power sector and achieve its ambitious renewable energy targets.

Since the EBRD began operations in Egypt in 2012, the bank has invested nearly €13.3 billion in 194 projects across the country. These investments span various sectors, including finance, transport, and agribusiness, as well as manufacturing, services, and infrastructure, with a particular emphasis on power, municipal water, and wastewater projects, according to the same source.

Last month, EBRD announced it was supporting the development and sustainability of Egypt’s renewable-energy sector by extending a $21.3 million loan to Red Sea Wind Energy.

The loan was established to fund the development and construction of a 150-megawatt expansion to the 500-megawatt wind farm currently being constructed in the same region.

Topics: Egypt European Bank for Reconstruction and Development (EBRD) Wind Power Green And Blue

UAE non-oil sectors push GDP growth to 4% in 2024: CBUAE

Updated 36 min 9 sec ago

Nour El-Shaeri

December 24, 2024 13:38

UAE non-oil sectors push GDP growth to 4% in 2024: CBUAE

Growth is projected to accelerate to 4.5% in 2025 and 5.5% in 2026
Non-oil GDP growth is forecast to remain robust, expanding by 4.9% in 2024 and 5% in 2025

Updated 36 min 9 sec ago

Nour El-Shaeri

December 24, 2024 13:38

RIYADH: The UAE economy is expected to grow by 4 percent in 2024, driven by robust performance across key non-oil sectors, according to official projections.

The Central Bank of the UAE’s Quarterly Economic Review for December indicates that growth will be supported by sectors including tourism, transportation and financial services, as well as insurance, construction, real estate, and communications.

Looking ahead, growth is projected to accelerate to 4.5 percent in 2025 and 5.5 percent in 2026, as the country continues to benefit from economic diversification policies aimed at reducing its dependence on oil revenues.

Non-oil GDP growth is forecast to remain robust, expanding by 4.9 percent in 2024 and 5 percent in 2025.

The report attributed this growth to strategic government policies aimed at attracting foreign investment and promoting economic diversification.

In the second quarter, non-oil GDP grew by 4.8 percent year on year, compared to 4.0 percent in the first quarter, supported by manufacturing, trade, transportation and storage, and real estate activities.

In September, the CBUAE revised its GDP growth forecast for the year upward by 0.1 percentage points, citing expected improvements in the oil sector.

Initially projecting a 3.9 percent growth for 2024, the central bank adjusted the figure to 4 percent. In its second-quarter economic report, the CBUAE forecasted a growth rate of 6 percent for 2025.

The UAE’s 16 non-oil sectors continued their steady growth in the third quarter of the year, with wholesale and retail trade, manufacturing, and construction being key contributors.

The manufacturing sector has benefited from increased foreign direct investment, aligning with both federal and emirate-level strategies.

The first nine months of the year also saw strong performance in the construction sector, reflecting significant investment in infrastructure and development projects.

Non-oil trade exceeded 1.3 trillion dirhams ($353.9 billion) in the first half of the year, representing 134 percent of the country’s GDP, a 10.6 percent year-on-year increase.

This growth underscores the success of the UAE’s economic diversification agenda and its comprehensive economic partnership agreements with various countries, which have strengthened trade relationships and driven exports.

The UAE has set ambitious economic targets to diversify its economy and reduce dependence on oil revenues.

Under the We the UAE 2031 vision, the country aims to double its GDP from 1.49 trillion dirhams to 3 trillion dirhams, generate 800 billion dirhams in non-oil exports, and raise the value of foreign trade to 4 trillion dirhams.

Additionally, the UAE plans to increase the tourism sector’s contribution to GDP to 450 billion dirhams.

Oil production averaged 2.9 million barrels per day in the first 10 months of the year and is forecasted to grow by 1.3 percent for the year, with further acceleration to 2.9 percent in 2025.

The fiscal sector also performed strongly in the first half of the year, with government revenue rising 6.9 percent on a yearly basis to 263.9 billion dirhams, equivalent to 26.9 percent of GDP.

This increase was fueled by a significant 22.4 percent rise in tax revenues. Meanwhile, the fiscal surplus reached 65.7 billion dirhams, or 6.7 percent of GDP, marking a 38.8 percent increase from the 47.4 billion dirhams surplus, or 5.1 percent of GDP, recorded in the first half of 2023.

Government capital expenditure surged by 51.7 percent year on year to 11 billion dirhams, reflecting the UAE’s commitment to advancing large-scale infrastructure projects and enhancing the country’s economic and investment landscape.

In the private sector, economic activity remained robust, with the UAE’s Purchasing Managers’ Index reaching 54.1 in October this year, signaling continued optimism among businesses driven by sustained demand and sales growth.

Dubai’s PMI stood at 53.2 in October, closely aligning with the national average, indicating consistent growth in the emirate’s non-oil private sector.

Employment and wages also showed strong performance, with the number of employees covered by the CBUAE’s Wages Protection System rising by 4 percent year-on-year in September.

Average salaries increased by 7.2 percent yearly during the same period, reflecting strong domestic consumption and sustainable GDP growth.

Topics: Central Bank of the UAE UAE economy UAE

Saudi Arabia, Iraq to propel digital cooperation amid top ministerial meeting

Updated 34 min 9 sec ago

REEM WALID

December 24, 2024 13:00

Saudi Arabia, Iraq to propel digital cooperation amid top ministerial meeting

Discussions focused on exploring new opportunities for joint investments in the field
Two parties shed light on importance of integrating efforts to develop the digital environment, empower capabilities, and raise the level of collaborations

Updated 34 min 9 sec ago

REEM WALID

December 24, 2024 13:00

RIYADH: Digital partnerships between Saudi Arabia and Iraq are on track to prosper after a top ministerial meeting between the two countries.

Saudi Arabia’s Minister of Communications and Information Technology, Abdullah Al-Swaha, met with his Iraqi counterpart, Hayam Al-Yasiri, during her visit to Saudi Arabia. The discussions focused on exploring new opportunities for joint investments in the field, according to the Saudi Press Agency.

The meeting also tackled ways to further stimulate entrepreneurship that supports innovation and encourages the growth of the digital economy.

This falls in line with the Kingdom’s objective to position itself as a global leader in artificial intelligence and digital transformation under Vision 2030. Goals include increasing the digital economy’s gross domestic product contribution from 14 percent in 2022 to 19.2 percent by 2025, digitizing 92 percent of government services, and raising the information and communication technology sector’s GDP share to 4 percent.

It also aligns with Iraq’s ongoing efforts to develop a digital transformation strategy to support the private and public sectors and drive economic growth.

During the meeting, the two parties also shed light on the importance of integrating efforts to develop the digital environment, empower capabilities, and raise the level of collaborations in priority areas such as AI as well as infrastructure development.

Earlier this month, as officials convened in Riyadh during the 19th Internet Governance Forum, Saudi Arabia also explored partnership opportunities with Germany, Japan, and France in emerging technologies, AI, and digital infrastructure.

Held from Dec. 15 to 19 at the King Abdulaziz International Conference Center, the UN-organized forum assembled global leaders to endorse global digital cooperation and address emerging challenges related to Internet governance.

At the forum’s opening at the time, the Kingdom revealed the Riyadh Declaration, a commitment to developing inclusive and responsible AI technologies in an attempt to address global challenges and drive economic value.

In November, Saudi senior tech diplomat Deemah Al-Yahya, the secretary-general of the multilateral Digital Cooperation Organization, held talks with Iraq’s prime minister, Mohammed Shia’ Al-Sudani, about support for Baghdad’s plans to develop its digital business and AI sectors.

The two sides discussed Iraq’s digital transformation strategy and the need to create and develop a workforce with the tech skills required to help grow the Iraqi economy effectively, SPA said at the time.

Topics: Saudi-Iraq ties digital economy

Aramco secures prime ratings for $10bn commercial paper program from Moody’s and Fitch

Updated 31 min 28 sec ago

Nirmal Narayanan

December 24, 2024 12:48

Aramco secures prime ratings for $10bn commercial paper program from Moody’s and Fitch

Moody’s assigned a Prime-1 short-term issuer rating to the energy giant
Fitch Ratings awarded an F1+ short-term rating

Updated 31 min 28 sec ago

Nirmal Narayanan

December 24, 2024 12:48

RIYADH: Saudi Aramco’s robust financial standing has been reaffirmed by Moody’s and Fitch, with the agencies assigning strong ratings to the energy giant’s newly established $10 billion US Commercial Paper Program.

Moody’s assigned a Prime-1 short-term issuer rating to the energy giant and reaffirmed its Aa3 long-term issuer rating with a stable outlook, reflecting the company’s ability to meet financial obligations.

Meanwhile, Fitch Ratings awarded an F1+ short-term rating, highlighting Aramco’s strong intrinsic capacity for timely payments and financial resilience.

Aramco has established a $10 billion US Commercial Paper Program to issue notes with maturities of up to 270 days.

Commercial paper is an unsecured, short-term debt instrument issued by corporations, typically used to cover receivables or meet short-term financial obligations, such as funding new projects.

“Aramco has excellent liquidity. Its consolidated cash balance and operational cash flow are more than sufficient to meet the group’s debt maturities, investment commitments and dividends over the next 12 to 18 months,” said Moody’s.

As of Sept. 30, the company had $69 billion of cash and cash equivalents.

The credit rating agency also projected that Aramco is expected to generate $180 billion in funds from operations through March 2026, sufficient to cover $16 billion in debt maturities, $85 billion in capital spending, and $140 billion in dividends over the same period.

The report also noted that the energy company maintains undrawn $10 billion multi-tranche revolving credit facilities, set to expire in April 2029.

Fitch echoed similar confidence, noting that Aramco’s financial profile is bolstered by its conservative financial policies, low production costs, and strong pre-dividend free cash flow.

“Its business profile is characterized by large-scale production, vast reserves, low production costs and expansion into downstream and petrochemicals,” said Fitch Ratings.

It added: “We expect state support to be forthcoming, although historically the company’s robust financial position has not necessitated government support. Saudi Arabia has provided support to other government-related entities in the past.”

Assigning an Aa3 baseline credit assessment rating to Aramco, Moody’s stated that the positive rating reflects the company’s proven track record in executing large-scale projects, significant downstream integration, conservative financial policy, and strong financial flexibility, supported by its low production costs.

“These characteristics provide resilience through oil price cycles and also help balance carbon transition risk, which is a material credit consideration for oil and gas companies,” added Moody’s.

Both agencies emphasized the strong link between Aramco’s ratings and those of the Saudi government.

Moody’s highlighted that Aramco’s Aa3 rating reflects the Kingdom’s solid credit standing, recently upgraded to Aa3 by Moody’s in November. The agency added that any changes in the sovereign rating would directly impact Aramco’s ratings.

Moody’s gives Aa3 ratings to countries which have a very low credit risk and hold the best ability to repay short-term debt.

“An upgrade of the sovereign rating would likely lead to an upgrade of Aramco’s rating if it maintains prudent financial policies and robust credit metrics. Negative pressure on the sovereign rating will lead to negative pressure on Aramco’s rating,” said Moody’s in the latest report.

Similarly, Fitch noted that Saudi Arabia’s A+ sovereign rating, affirmed in February, underscores the Kingdom’s strong capacity for financial commitments and its ability to provide support to Aramco if needed.

Both agencies acknowledged Aramco’s capacity to adapt to market conditions, particularly its ability to adjust dividend commitments in response to oil price fluctuations. In 2024, Aramco delivered a base dividend of $81.2 billion, supported by its strong operating cash flow.

Topics: Aramco Fitch Ratings Moody's

Oil Updates — prices rise in thin pre-Christmas trade

Updated 24 December 2024

Reuters

December 24, 2024 11:04

Oil Updates — prices rise in thin pre-Christmas trade

Solid economic prospects for the US are also supporting prices

Updated 24 December 2024

Reuters

December 24, 2024 11:04

LONDON: Oil prices rose on Tuesday, reversing the prior session’s losses, buoyed by slightly positive market outlooks for the short term and stronger US economic data, despite thin trade ahead of the Christmas holiday.
Brent crude futures were up 33 cents, or 0.5 percent, to $72.96 a barrel, and US West Texas Intermediate crude futures rose 29 cents, or 0.4 percent, to $69.53 a barrel at 07:22 a.m. Saudi time.
FGE analysts said they anticipated the benchmark prices would fluctuate around current levels in the short term “as activity in the paper markets decreases during the holiday season and market participants stay on the sidelines until they get a clearer view of 2024 and 2025 global oil balances.”
Supply and demand changes in December have been supportive of their current less-bearish view so far, the analysts said in a note.
“Given how short the paper market is on positioning, any supply disruption could lead to upward spikes in structure,” they added.
Some other analysts also pointed to signs of a positive outlook for oil over the next few months.
“The year is ending with the consensus from major agencies over long 2025 liquids balances starting to break down,” said Neil Crosby, Sparta Commodities’ assistant vice president of oil analytics, in a note. “The EIA’s STEO (short-term energy outlook) recently shifted their 2025 liquids to a draw despite continuing to bring back some OPEC+ barrels next year.”
Solid economic prospects for the US, the world’s largest oil consumer, are also supporting prices.
New orders for key US-manufactured capital goods surged in November amid strong demand for machinery, while new home sales also rebounded, in a sign that the US economy is on a solid footing toward the year-end.
In the shorter term, traders are looking for indications of US demand from the crude oil and fuel stockpiles data due from the American Petroleum Institute industry group later on Tuesday.
Analysts polled by Reuters estimated on average that crude inventories fell by about 2 million barrels in the week to Dec. 20 in a sign of healthy demand. The Energy Information Administration is due to release its data on Friday.

Topics: Oil Updates oil prices Oil market Brent crude

Oil Updates – prices climb after Israel strikes Gaza, truce talks continue

Oil Updates – prices climb after Israel strikes Gaza, truce talks continue

Saudi Aramco’s net profit hits $27.27bn in Q1

EBRD supports Africa’s largest onshore wind project in Egypt with $275m loan

EBRD supports Africa’s largest onshore wind project in Egypt with $275m loan

Terminal 4 at Cairo International Airport to boost Egypt’s aviation and tourism sectors

Saudi Arabia and Egypt ink supply chain deal to boost industrial ties

UAE non-oil sectors push GDP growth to 4% in 2024: CBUAE

UAE non-oil sectors push GDP growth to 4% in 2024: CBUAE

UAE’s ADNOC boosts drilling capabilities with 2 new jack-up rigs

UAE’s AD Ports Group doubles credit facility to $2.13bn

Saudi Arabia, Iraq to propel digital cooperation amid top ministerial meeting

Saudi Arabia, Iraq to propel digital cooperation amid top ministerial meeting

Saudi Arabia accelerates digital transformation with new transport initiatives

‘Common Ground’ festival celebrates Saudi Arabia and Iraq cultures

Aramco secures prime ratings for $10bn commercial paper program from Moody’s and Fitch

Aramco secures prime ratings for $10bn commercial paper program from Moody’s and Fitch

Fitch revises Oman’s outlook to positive, downgrades Egypt’s economic outlook

Moody’s upgrades ratings for 11 Saudi banks

Oil Updates — prices rise in thin pre-Christmas trade

Oil Updates — prices rise in thin pre-Christmas trade

Oil Updates — prices stable as data offsets surplus concerns

Oil Updates – crude falls on demand growth concerns, robust dollar

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Oil Updates – prices climb after Israel strikes Gaza, truce talks continue

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