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Saturday, 25 February 2012

Saudi interbank market calm despite exit of European banks from region

Top hedge fund manager confident about oil, gold and Saudi stocks and little else « ArabianMoney

Perhaps this is going to be a bumper year for GCC stock markets after all. Oil prices are heading up and the threat from Iran is both a blessing and a curse for the region in this regard.

Fund manager John Burbank, who manages about $4 billion in assets as founder and chief investment officer of Passport Capital spoke about his bearish view of the global economy and about his confidence in Saudi Arabia with Bloomberg TV’s Margaret Brennan.

Oil Rises to Almost $110 as S&P 500 Closes at Highest Level Since June ’08 - Bloomberg

Oil extended the longest rally in two years as tensions with Iran threatened supplies while signs of economic growth boosted the outlook for demand. The Standard & Poor’s 500 Index closed at the highest level since June 2008.
Crude for April delivery rose for a seventh day, increasing 1.8 percent to $109.77 a barrel, the highest settlement since May 3. The Standard & Poor’s 500 Index increased 0.2 percent to 1,365.74 after earlier rallying as much as 0.4 percent. The Dow Jones Industrial Average slipped 1.74 points to 12,982.95, retreating from an almost four-year high. The Dollar Index, a gauge of the currency against six major peers, lost 0.6 percent.
Financial firms and companies that rely on discretionary consumer spending were the biggest drag on the S&P 500 as the index trimmed an early advance triggered after sales of new homes exceeded economists’ forecasts and a gauge of consumer confidence topped estimates.

U.S., Saudi maneuver to contain Iran oil market threat | Reuters

Saudi Arabia has raised oil exports and the United States is considering releasing crude from its strategic reserves as oil prices hit nine-month highs on Friday and concerns deepened over Iran's nuclear program.

Brent crude surged to over $125 a barrel after the United Nation's nuclear watchdog issued a report flagging the potential military nature of Iran's nuclear program, following an aborted U.N. inspection mission to Iran this week.

The report heightened fears of a supply disruption and could stoke worries in Israel, which has threatened Iran with pre-emptive strikes on nuclear sites. That would send shockwaves across the region and almost certainly drive oil prices even higher.

UAE, Qatar, Oman to buy $2b electricity from Iran - Tehran Times

Iran will export up to $2 billion of electricity to the UAE, Qatar and Oman via subsea cables, Deputy Energy Minister Mohammad Behzad has said.

Last week, Iran Offshore Oil Company (IOOC) struck a $3.8 billion deal with Iran’s Power Projects Management Company (MAPNA) for the development of the Persian Gulf's Forouz B gas field and an associated gas-fired power project, of which most of the output will be exported to the Persian Gulf Arab states.

“The field will produce 3000 megawatts of electricity… which a little of it will be consumed at home and the rest will be exported to neighboring countries particularly (the United Arab) Emirates, Oman and Qatar,” Behzad told the Fars news agency.

The Saudis Need Those High Oil Prices - Businessweek

The world last year watched to see if Saudi Arabia would suffer the same instability that swept away other regimes in the Middle East. The question now is whether the world’s largest oil supplier needs to raise prices to sustain ramped-up spending intended to calm its citizens. Higher prices would be bad news for Western governments, which need affordable oil to nurture their economic recoveries.

The Saudis rarely spell out exactly what they are thinking on the topic, but there are signs their strategy has changed, and they are increasingly willing to raise prices. Still, they seem not inclined to let prices go sky-high. A year ago Saudi oil minister Ali Al-Naimi said oil at $70 to $80 a barrel was fair. Then on Nov. 21, Al-Naimi said he was “very happy” with current crude prices; on that day oil traded close to $98 a barrel. Prices are now around $106 a barrel.

Chart of the week: do companies or crude generate better investor returns? | beyondbrics –

This week has seen the oil price hit new highs in euros and sterling, with worries over Iran prompting bullish calls of $150 a barrel.

So oil is on the up. And emerging markets have oil – and lots of it. But does buying emerging markets oil and gas stocks give a better return than simply investing in Brent crude, or investing in the energy majors?

Chart of the week investigates.