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Sunday, 9 December 2018

Why oil’s ‘big three’ just got bigger: Saudi Arabia, Russia and the US are still calling the shots

Why oil’s ‘big three’ just got bigger: Saudi Arabia, Russia and the US are still calling the shots:

The meeting of the Organization of Oil Exporting Countries (OPEC) in Vienna last week confirmed what some in the oil industry have been saying for a while: A new global energy dynamic is being created by the three-way relationship between Saudi Arabia, Russia and the US.

After a first day of deadlock over the output reduction needed to stabilize global crude prices, it took a second-day intervention by Russia to back up Saudi calls for a substantial cut, which was duly delivered.

That brought to a conclusion probably the most controversial OPEC meeting of recent times, with a crop of geopolitical factors — Qatar’s planned withdrawal from the organization, sanctions on Iran and the threat of global trade wars — all in evidence.

Gulf economies stand to lose if Huawei row reignites trade war | Arab News

Gulf economies stand to lose if Huawei row reignites trade war | Arab News:

A global trade war was apparently averted over dinner in Buenos Aires a couple of weeks ago when President Donald Trump and his Chinese counterpart Xi Jinping called a cease-fire in the escalating commercial confrontation between the world’s two biggest economies.

Now that cease-fire has been threatened by the arrest in Canada — on a warrant from the US — of Meng Wanzhou, the chief financial officer of Huawei, China’s flagship technology company.

The US is seeking her extradition for trial on allegations of breaching sanctions against Iran.

S&P revises outlook on Qatar to ‘stable’

S&P revises outlook on Qatar to ‘stable’:

S&P Global Ratings has revised its outlook on Qatar to ‘stable’ from ‘negative’ on the strength of the country’s macroeconomic resilience. The premier ratings agency also affirmed Qatar’s sovereign credit ratings at ‘AA-/A-1+’.

In its overview released yesterday, S&P said Qatar has “effectively managed” the ongoing blockade’s impact on diplomatic ties and trade and transport links.

“We expect economic growth to accelerate and external accounts to remain in surplus from 2018-2021, except in the event of larger declines in oil prices,” S&P said.

Saudis Are Said to Review Expat Fees as Economy Feels Sting - Bloomberg

Saudis Are Said to Review Expat Fees as Economy Feels Sting - Bloomberg:

Saudi Arabia is reviewing its policy of imposing fees on expatriate workers after rising costs inflicted economic pain and contributed to an exodus of foreigners, according to four people familiar with the matter.

While it’s unlikely the fees will be canceled altogether, a ministerial committee is looking at modifying or restructuring them, one of the people said. A decision is expected within weeks, two of the people said. They all spoke on condition of anonymity because the information isn’t public yet.

Awwad Alawwad, the Saudi minister of media, denied the fee is being reviewed, the government’s Center for International Communication said in an email.

ADFG's Goldilocks raises stake in Dubai-listed insurance firm Salama | Reuters

ADFG's Goldilocks raises stake in Dubai-listed insurance firm Salama | Reuters:

Goldilocks Investment Company, an indirect subsidiary of Abu Dhabi Financial Group (ADFG), has increased its beneficial ownership in Dubai-listed Islamic Arab Insurance Company, known as Salama, to 14.1 percent, it said on Sunday.

The move reflected Goldilocks’ and ADFG’s bullish outlook on the insurance sector in the United Arab Emirates, Goldilocks said.

Goldilocks raised its stake from 9.9 percent via a share finance facility, it said. Combined, Goldilocks and ADFG continue to hold around 29.9 percent of Salama’s issued shares.

MIDEAST STOCKS-Gulf markets close mostly lower; Egypt falls again | Reuters

MIDEAST STOCKS-Gulf markets close mostly lower; Egypt falls again | Reuters:

Gulf markets closed mainly in the red on Sunday, with market heavyweights Emaar Properties and Emirates NBD dragging Dubai’s index lower and Egypt’s market falling to fresh lows for the year.

After plunging to its lowest level in more than five years on Thursday, the Dubai index regained ground in early trading before closing 1.2 percent lower.

The market has fallen 24.3 percent this year, partly due to concerns about the health of Dubai’s real estate sector and wider economy.

Qatar's Commercial Bank to raise up to $1 billion in debt next year -CEO | Reuters

Qatar's Commercial Bank to raise up to $1 billion in debt next year -CEO | Reuters:

Qatar’s Commercial Bank could raise up to $1 billion in debt next year by tapping a range of various debt instruments, as the country’s third-largest lender by assets aims to further diversify its funding sources, the bank’s chief executive said.

Qatari banks, traditionally reliant on foreign funding, have sought to tap a larger variety of investors since June last year when Qatar became locked in a diplomatic dispute with Saudi Arabia, the United Arab Emirates, Egypt and Bahrain.

Commercial Bank has around $750 million in debt maturing next year, including bonds and loans, and plans to refinance that debt as “normal course of business,” said Joseph Abraham, who added that total debt issuance next year could go up to $1 billion.

ADNOC awards 4% interest in onshore concession to China ZhenHua | ZAWYA MENA Edition

ADNOC awards 4% interest in onshore concession to China ZhenHua | ZAWYA MENA Edition:

Abu Dhabi's ADNOC awarded China ZhenHua a 4 percent stake in its onshore oil concession, previously held by CEFC China Energy Company Limited, it said in a statement on Sunday.

China ZhenHua Oil is 100 percent indirectly owned by the Assets Supervision and Administration Commission of the State Council, a Chinese government agency that supervises and manages over a hundred state-owned assets and enterprises in a variety of sectors, including oil and petrochemicals and transport, it said.

Qatar Emir Said to Snub Saudi Summit Invite as Gulf Rift Festers - Bloomberg

Qatar Emir Said to Snub Saudi Summit Invite as Gulf Rift Festers - Bloomberg:

The invitation from Saudi Arabia’s King Salman to his Qatari counterpart to attend Sunday’s gathering of Gulf monarchies, after 18 months as a regional pariah, wasn’t enough to build a bridge between the feuding countries.

The overture, which Emir Tamim Bin Hamad Al Thani rejected, according to a Gulf official, comes as Saudi Arabia seeks to defuse pressure over the killing of a vocal critic in Istanbul. Saudi Arabia’s leadership is also under pressure from the U.S. Congress to mend regional divisions and end its war in Yemen.

Plus, the rifts that prompted the Saudi-led boycott of Qatar in June 2017 haven’t gone away. If anything, they’ve deepened as the six-nation Gulf Cooperation Council meets.

#Qatar finance minister says budget for 2019 will project surplus | ZAWYA MENA Edition

Qatar finance minister says budget for 2019 will project surplus | ZAWYA MENA Edition:

Qatar's national budget for 2019 will show a forecast for a surplus, its finance minister Ali Shareef al-Emadi told a conference on Sunday.

He reiterated that the financial statements for the first half of 2018 confirm the strength of its economy and the country has overcome the "blockade" imposed by Saudi Arabia and its allies.

He said non-oil sector economic growth for the first half of the year was over 5 percent.

Abu Dhabi's Senaat sees potential for a bond next year -CEO | Reuters

Abu Dhabi's Senaat sees potential for a bond next year -CEO | Reuters:

Abu Dhabi’s Senaat, a state-owned investor in the emirate’s industrial sector, sees potential for it to issue a bond next year, its chief executive said on Sunday.

The company last month issued $300 million in sukuk, or Islamic bonds, a document by one of the banks leading the deal showed.

“Yes there is potential [for 2019]. We wanted to test the market and the response was very good” Jamal al-Dhaheri told reporters.

#Qatar's Commercial Bank remains committed to Turkey -CEO | Reuters

Qatar's Commercial Bank remains committed to Turkey -CEO | Reuters:

Qatar’s Commercial Bank remains committed to Turkey, where the bank has a presence, its chief executive Joseph Abraham, said on Wednesday.

Commercial Bank owns Alternatifbank in Turkey and said earlier this year it is deploying more capital and focusing more on Turkey to benefit from closer political ties.

Ankara has emerged as a strong ally as Qatar faces off against Saudi Arabia, United Arab Emirates, Bahrain and Egypt in a regional diplomatic and commercial rift. Speaking about the outlook of the Qatar banking sector at a conference, he said: “We’ve sort of reached the trough of any sort of concerns or risks, therefore there is more upside [in Qatar] over the next 12 months.”

MIDEAST-STOCKS-Saudi rises on Ma'aden starting output at new plant | Reuters

MIDEAST-STOCKS-Saudi rises on Ma'aden starting output at new plant | Reuters:

Saudi Arabian Mining Company (Ma’aden) helped Saudi Arabia’s stock index gain ground in early trading on Sunday, while Dubai’s market remained flat after falling to its lowest level in more than five years last week.

Ma’aden was up 2.6 percent after the company said on Dec. 6 that the firm will start commercial production on Sunday at its plant producing aluminium flat rolled products. Ma’aden Rolling Company is 74.9 percent owned by Ma’aden and 25.1 percent owned by Alcoa.

Al Rajhi Bank gained 0.1 percent, while Jabal Omar Development Co added 0.6 percent.

Saturday, 8 December 2018

Long-term outlook for Dubai takes another turn down

Long-term outlook for Dubai takes another turn down:

Regardless of the shortened three-day trading week, the bear market continued in Dubai with the Dubai Financial Market General Index (DFMGI) falling 88.39 or 3.31 per cent to end at 2,580.27. This is the second week in a row where the index fell more than 3.0 per cent. There were only five positive issues, while 30 declined. Weekly volume fell given the shorter week. For the year, the index has fallen 23.4 per cent, and it is down 31.2 per cent from its 2017 peak of 3,738.69.

Of greater significance than last week’s performance however, is the fact that the DFMGI has not only closed below the prior long-term swing low support of 2,590.72 from January 2016, but it has closed below it on a weekly basis. As the index fell last week there was no sign of support at the 2016 lows. This is contrary to the clear support seen in 2016 as the index quickly turned higher back then and moved into a sustained rally. Technically, last week’s action is long-term bearish a continuation of the decline that began off the 2014 highs has been triggered. Therefore, the possibility of an acceleration in downside momentum has increased. Further, any chance for a recovery has been extended into the future as there is no sign of a bottom.

Looking back at previous price action, there may first be some degree of support seen around the monthly price area of 2,409. That’s where resistance was seen at the peak from October 2009 and now it may be a support area. Nevertheless, there is no further evidence for the potential significance of that price zone and therefore it is not likely an area that will hold for the long-term.

#Qatar’s Opec exit signals future course of action - The Peninsula Qatar

Qatar’s Opec exit signals future course of action - The Peninsula Qatar:

Qatar’s surprise announcement to exit Opec on January 1 after 57 years, citing the country’s emphasis on expanding its natural gas production is a message that the country remains committed to pursuing an independent path and focusing on a sector where it is already vying for position as the world’s largest producer, rather than remaining in an organization that it sees as irrelevant to its growth plan, Institute of International Finance (IIF) said yesterday.

Qatar has ample physical and financial resources to withstand the blockade tensions; apart from the sovereign wealth fund, the central bank continues to amass foreign reserves, IIF noted in its ‘Qatar Country Report.’ IIF believes that the regional rift has been a blessing in disguise in a way, since it has spurred the government to reaffirm its objectives of diversification and private sector development and to accelerate its reforms. It is gradually moving forward with legislation to permit 100 percent foreign ownership of firms in most sectors and favorable tax treatment in a bid to attract FDI, as well as fostering the growth of SMEs by expanding their access to financing and opportunities for participation in PPPs. It is partnering with prominent universities to expand its human capital and gradually encouraging greater participation of women in higher education and visible positions in leadership. In addition, it is developing plans to ensure that the construction associated with the World Cup pays long-term dividends even after the games are over.

IIF expects Qatar’s growth to pick up from 1.6 percent in 2017 to 2.2 percent in 2018. Construction activity, funded through years of accumulated oil and gas proceeds and overwhelmingly reliant on a migrant workforce, is likely to remain strong and the main driver of non-hydrocarbon growth, with significant work still underway to complete the infrastructure necessary for the 2022 World Cup.

OPEC-Plus Deal Is Worth The Risk Of Trump Tweets - Bloomberg

OPEC-Plus Deal Is Worth The Risk Of Trump Tweets - Bloomberg:

If Friday’s last-minute deal by the OPEC-plus group sparks a big rally in oil prices, then it and Saudi Arabia, especially, can probably expect a few holiday tweets from a certain president. Judging from comments made by Khalid Al-Falih, the country’s energy minister, they seem to expect as much.

OPEC says it will cut 800,000 barrels a day of production starting in January, while its 10 partner countries have pledged to take out 400,000 a day. Oil prices jumped, erasing the plunge that followed Thursday’s inconclusive meeting. Even so, Brent crude oil is still only at $63 a barrel. That could change, however, if Saudi Arabia follows through on comments made by Al-Falih at Friday’s press conference.

While the group didn’t give specific quotas for each member, the overall figure implies a cut of 3 percent versus October production except for the three countries exempted (Iran, Libya and Venezuela). That would mean Saudi Arabia going from about 10.6 million barrels a day to 10.3 million. However, Al-Falih said the country produced 11.1 million barrels in November and guided for 10.2 million barrels a day in January, when the cuts are due to begin. So rather than cutting 300,000 barrels a day, Saudi Arabia may be taking out three times that amount in the near term, more than OPEC’s entire pledge.

Qatar's Emir Won't Join Gulf Summit in Riyadh: Turkey's AA - Bloomberg

Qatar's Emir Won't Join Gulf Summit in Riyadh: Turkey's AA - Bloomberg:

The Qatari Emir, Tamim Bin Hamad Al Thani, will not join the Gulf Cooperation Council Summit to be held in Riyadh on Sunday, Turkey’s Anadolu Agency reported late Saturday, citing a Qatari official it didn’t identify.

A state minister will represent the country at the meeting instead, AA reported. Saudi Arabia’s King Salman bin Adbulaziz invited Qatar’s ruler to attend the regional summit in a sign of a potential thaw between the nations.

The invitation, which was extended on Dec. 4, was seen as a way for Saudi Arabia to start to overcome international condemnation for the killing of journalist Jamal Khashoggi and its conduct in the Yemen war, and diffuse tensions with its neighbor.

#Qatar Petroleum to buy stake in ExxonMobil Mozambique blocks | Reuters

Qatar Petroleum to buy stake in ExxonMobil Mozambique blocks | Reuters:

Qatar Petroleum said on Saturday it had agreed to buy a 10 percent participating interest in three of ExxonMobil’s offshore exploration blocks in Mozambique’s Angoche and Zambezi basins.

It will be part of a consortium made up of affiliates of ExxonMobil with a 50 percent stake, Empresa Nacional de Hidrocarbonetos with 20 percent, Rosneft with 20 percent interest, and Qatar Petroleum with 10 percent.

Qatar and the United States plan to strengthen “energy partnerships,” the emirate’s minister of state for energy affairs, Saad Al-Kaabi, said in a statement after a meeting in Doha with his U.S. counterpart Rick Perry.

UPDATE 1-Saudi oil exports seen down 1 mln bpd in Jan from Nov levels - sources | Reuters

UPDATE 1-Saudi oil exports seen down 1 mln bpd in Jan from Nov levels - sources | Reuters:

Saudi Arabia’s crude oil exports are expected to drop next month by some 1 million barrels per day (bpd) from November levels, two sources familiar with the matter said on Saturday.

The world’s top oil exporter is expected to ship about 7.3 million bpd in January, one of the sources said, due to softening seasonal demand and as Riyadh follows through on a global deal to cut output to prevent a build up in oil supplies.

The sources did not give a figure for December oil exports.

Saudi Arabia Juggles Iran and U.S. Shale to Deliver OPEC Deal - Bloomberg

Saudi Arabia Juggles Iran and U.S. Shale to Deliver OPEC Deal - Bloomberg:

Saudi Arabia’s energy minister emerged from days of heated OPEC talks joking that he wasn’t an easy man to be friends with.

Yet, the deal Khalid Al-Falih hammered out to reduce production by 1.2 million barrels a day, which sent oil prices soaring on Friday, was based on Saudi Arabia shouldering the lion’s share of the cuts. It also relied, to an unprecedented extent, on Russia to broker an agreement between the Saudis and their archrivals, Iran, and acknowledged implicitly that there’s little the kingdom could do to hurt surging U.S. oil shale without causing itself pain.

“Saudi economic self-interest trumps Trump,’’ said Mike Rothman, president of Cornerstone Analytics Ltd., a veteran of three decades of OPEC meetings.

Friday, 7 December 2018

Leaner Shale Likes But Won't Need OPEC Cut to Keep Growing - Bloomberg

Leaner Shale Likes But Won't Need OPEC Cut to Keep Growing - Bloomberg:

U.S. shale’s response to OPEC’s decision to cut supply and boost prices: We’ll take it, but we don’t need it.

In 2014, the U.S. oil industry’s fate seemed to rest in the hands of OPEC ministers who were flooding the market with cheap oil in a push to obliterate them. Now, the cartel is in full retreat, agreeing to cut output to keep their own economies healthy even as U.S. production continues to surge.

The move came in a week in which oil fell to near $50 a barrel, a price that four years ago would have panicked U.S. drillers. But since then, shale explorers have cut costs, boosted fracking efficiency and made wells longer and more productive. The result: Break evens for a 30 percent profit have been almost halved to just $45 a barrel in the prolific Permian Basin.

Meet the New Permian, It's Double the Size of the Old One - Bloomberg

Meet the New Permian, It's Double the Size of the Old One - Bloomberg:

The U.S.’s fastest growing oil field may have even more to give.

The Permian’s Delaware Basin, the less drilled part of the giant West Texas and New Mexico oil field, holds more than twice the amount of crude as its sister, the Midland Basin, the U.S. Geological Service said Thursday.

The Wolfcamp Shale and Bone Spring rock formations in the Delaware hold an estimated 46.3 billion barrels, the scientists said in their first assessment of the area. In addition, it holds about 281 trillion cubic feet of natural gas, about 18 times the amount in the Midland Basin, which is more heavily drilled and better known.

Crude Climbs as OPEC and Allies Finalize Production Limitations - Bloomberg

Crude Climbs as OPEC and Allies Finalize Production Limitations - Bloomberg:

Oil in New York jumped after OPEC and allied crude exporters surprised traders with a larger-than-expected output reduction. Futures advanced more than 2 percent in New York and London on Friday. The Organization of Petroleum Exporting Countries and aligned nations will collectively curb production by 1.2 million barrels a day, 20 percent more than previously discussed.

“It’s been a volatile October and November, but this is a nice Christmas present into December,” said Chris Kettenmann, chief energy strategist at Macro Risk Advisors LLC. OPEC “stepped up and delivered this year and we should see volatility come in.”

Crude oil has steadily dropped since early October amid concern over growing supplies and the American government’s go-slowly approach by sanctions against Iran. OPEC and allies ended meetings in Vienna on Friday with an agreement for the cartel to reduce output by 800,000 barrels a day and other producers to cut by 400,000 barrels a day. Iran secured an exemption from the deal.

OPEC Meeting 2018: Larger-Than-Expected Oil Cut Agreed On - Bloomberg

OPEC Meeting 2018: Larger-Than-Expected Oil Cut Agreed On - Bloomberg:

OPEC finally broke an impasse over production curbs, agreeing on a larger-than-expected cut with allies after two days of fractious negotiations in Vienna.

The cartel and its partners agreed to remove 1.2 million barrels a day from the market, with OPEC itself shouldering 800,000 barrels of the burden. Iran emerged as a winner from the contentious talks, saying it’s secured an exemption from cuts as it suffers the effects of U.S. sanctions.

Crude surged as much as 5.8 percent in London, raising the risk that the deal could anger U.S. President Donald Trump, who had urged the group to keep the taps open and prices low.

Oil Declines as OPEC Resumes Talks in Hunt for Production Deal - Bloomberg

Oil Declines as OPEC Resumes Talks in Hunt for Production Deal - Bloomberg:

Oil extended losses near $51 a barrel after OPEC entered a second day of talks in an attempt to draw up a deal to cut output.

New York futures slipped as much as 1.7 percent, falling for a third session. Saudi Energy Minister Khalid Al-Falih said Thursday in Vienna that he isn’t confident of an agreement when the Organization of Petroleum Exporting Countries meets again with its allies on Friday. OPEC is discussing a proposal that would see the group reduce output by 650,000 barrels a day, with a further 350,000 barrel a day contribution from its allies, including Russia, delegates said.

Oil has plunged more than 30 percent from a four-year high in October as concern over oversupply was fueled by waivers given for some buyers of Iranian oil and growing crude inventories and production in the U.S. While Saudi Arabia’s energy minister said Wednesday that output cuts of 1 million barrels a day were adequate to balance the market, there’s still uncertainty over whether the amount would be enough to shift current bearish market sentiment and prop up prices.

Riyadh to host GCC Summit Sunday | ZAWYA MENA Edition

Riyadh to host GCC Summit Sunday | ZAWYA MENA Edition:

The leaders of Gulf Cooperation Council (GCC) will hold the 39th session of the GCC Supreme Council in Riyadh on Sunday. Custodian of the Two Holy Mosques King Salman will chair the summit, according to GCC Secretary General Abdullatif Al-Zayani.

Al-Zayani expressed his pride and gratitude to King Salman for entrusting him to extend the invitation to the GCC leaders to attend the summit. “The GCC leaders will discuss a number of important issues pertaining to the GCC joint action, and the achievements so far made in the framework of the GCC integration and cooperation in political, defense, economic and legal fields. They will examine the reports and recommendations submitted by relevant specialized ministerial committees and the General Secretariat,” he said.

The GCC chief said that the session would also review the latest regional and international political developments and security situations in the region, the Saudi Press Agency reported.

Oil edges higher after #Russia indicates larger output cut | Reuters

Oil edges higher after Russia indicates larger output cut | Reuters:

Brent oil futures edged higher on Friday after Russia seemed likely to contribute a bigger output cut to an OPEC and non-OPEC deal, but Saudi Arabia voiced pessimism on whether an agreement could be reached as Iran insisted on an exemption.

International Brent crude oil futures LCOc1 fell below $60 per barrel in early trade, but firmed to $60.17 a barrel by 1041 GMT, up 11 cents from the close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 18 cents at $51.3 per barrel.

The slight recovery came after crude slumped by almost 3 percent the previous day, with the Organization of the Petroleum Exporting Countries (OPEC) ending a meeting at its headquarters in Vienna, Austria, on Thursday without announcing a decision to cut crude supply.

#Dubai’s developers looking elsewhere for funds

Dubai’s developers looking elsewhere for funds:

Off-plan sales and launches not going well? Don’t worry, developers in Dubai are actively working on their Plan B. 


First, use whatever funds are available to them to get their current projects up to and past the 50 per cent construction mark. The new sentiment among most developers is that just touching the 20 per cent level will not cut much ice with potential buyers.

The Dubai Land Department (DLD) requirement is that developers need to have fully paid up the land and reached 20 per cent, to formally launch sales. But these days “the whole requirement of buyers have changed — they want to buy when the project is visible,” said Ali Tumbi, CEO of Aqua Properties, which started as a brokerage firm and now has a development portfolio as well.

Saudi economy has proved resilient — but now comes the challenge | Arab News

Saudi economy has proved resilient — but now comes the challenge | Arab News:

As the decision makers in Vienna got down to the nitty gritty on Thursday, the economic policymakers back home were looking through the range of oil price variables to see how the OPEC deliberations will effect their budget calculations for 2019.

Though it is still too early to say where the oil price will settle after Vienna, especially after the recent volatility in global crude prices amid a wave of geopolitical forces pulling it this way and that, the economic background is relatively benign — or at least less unpredictable than it has been for several years.

The risk is that those same mercurial geopolitics can throw off course even the best laid plans, and that Saudi Arabia — the biggest of the regional oil-exporting economies — finds itself contending with more variables than policymakers would ideally like.

Thursday, 6 December 2018

#Dubai's Slide Goes Deeper as Stocks Drop to Lowest Since 2013 - Bloomberg

Dubai's Slide Goes Deeper as Stocks Drop to Lowest Since 2013 - Bloomberg: Shares listed in the biggest city of the United Arab Emirates tumbled 2 percent Thursday to the lowest in more than five years as a slump in real estate stocks showed no signs of abating.

Dubai’s DFM General Index has fallen 23 percent this year, making the gauge the worst performer globally, with Emaar Properties PJSC, Damac Properties PJSC and Union Properties PJSC losing at least 40 percent of their market value.

With hopes for a short-term recovery faltering, Dubai shares trade cheaper when compared to peers in other emerging markets. Emaar Properties, the developer of the world’s tallest tower and which fell 4.3 percent on Thursday, is trading at 4.5 times estimated earnings for the next 12 months, the lowest since 2010.

US Is Net Oil Exporter For First Time in 75 Years - Bloomberg

US Is Net Oil Exporter For First Time in 75 Years - Bloomberg:

America turned into a net oil exporter last week, breaking 75 years of continued dependence on foreign oil and marking a pivotal -- even if likely brief -- moment toward what U.S. President Donald Trump has branded as "energy independence."

The shift to net exports is the dramatic result of an unprecedented boom in American oil production, with thousands of wells pumping from the Permian region of Texas and New Mexico to the Bakken in North Dakota to the Marcellus in Pennsylvania.

While the country has been heading in that direction for years, this week’s dramatic shift came as data showed a sharp drop in imports and a jump in exports to a record high. Given the volatility in weekly data, the U.S. will likely remain a small net importer most of the time.

OPEC Talks End Without Oil-Cuts Deal as Russia Holds Back - Bloomberg

OPEC Talks End Without Oil-Cuts Deal as Russia Holds Back - Bloomberg:

OPEC ended talks without a deal on oil production cuts for the first time in nearly five years as Russia flexed its muscles by so far refusing to commit to the big output curb that Saudi Arabia is demanding.

After two days of talks in Vienna, Saudi Energy Minister Khalid Al-Falih said he isn’t confident of an agreement when the Organization of Petroleum Exporting Countries meets again with its allies on Friday. A proposal for a combined OPEC and non-OPEC cut of 1 million barrels a day was left dangling in uncertainty.


“Not everybody is ready to cut equally,” Al-Falih told reporters in Vienna. “Russia is not ready for a substantial cut.”

Abu Dhabi meets bond investors in non-deal roadshow, sources say | Reuters

Abu Dhabi meets bond investors in non-deal roadshow, sources say | Reuters:

Abu Dhabi held meetings with international bond investors in a so-called non-deal roadshow before a potential bond issue next year, sources familiar with the matter said, as a recent drop in oil prices might prompt Gulf countries to borrow soon. 


Governments in the Gulf Cooperation Council region have raised billions of dollars in the international debt markets over the past few years to offset budget deficits caused by lower oil prices.

Representatives of the Abu Dhabi government met investors in Frankfurt, London, Boston and New York about a week ago, said one of the sources. A non-deal roadshow is a series of investor meetings not tied to a specific transaction.

#Kuwait to be added to S&P DJI Global Benchmark Indices with EM classification | Reuters

Kuwait to be added to S&P DJI Global Benchmark Indices with EM classification | Reuters:

Kuwait’s stock market will be added to S&P Dow Jones Indices’ Global Benchmark Indices with an emerging market classification, Kuwait’s market regulator said on Thursday, citing the index provider.

It is the latest piece of good news for Kuwait, one of the standout performers in Gulf markets this year, and comes ahead of MSCI’s decision next year on whether to reclassify its Kuwait index from the current frontier-market status to its widely used emerging-market benchmark.

In a statement, cited by the Capital Markets Authority, S&P DJI said it recognised the progress Kuwait had made in trade clearing and settlement, including changing to a T+3 settlement cycle, meaning trades are settled within three days of execution, and establishing a delivery versus payment system.

Saudi's Saad Group and creditors select advisers in bid to resolve debt dispute | Reuters

Saudi's Saad Group and creditors select advisers in bid to resolve debt dispute | Reuters:

Saad Group and bank creditors of the Saudi Arabian conglomerate have both selected advisers in a bid to try to reach a deal that could help end the kingdom’s largest and longest-running debt dispute, financial sources said on Thursday.

The appointments of London-based Orchard Corporate Strategy by Saad and EY by creditors, is the latest attempt to reach an agreement that will be complicated by an ongoing auction of the company’s assets.

One of the sources said creditors were seeking to engage with the court overseeing an auction process to try to avoid a fire sale of assets and disorderly liquidation of the company in order to secure a better deal for creditors.

OPEC tentatively agrees to oil cut, waits for Russia to commit | Reuters

OPEC tentatively agrees to oil cut, waits for Russia to commit | Reuters:

OPEC tentatively agreed to an oil output cut on Thursday but was waiting for a commitment from non-OPEC heavyweight Russia before deciding the exact volumes for a production reduction aimed at propping up crude prices, two sources from the group said.

Russian Energy Minister Alexander Novak flew home from Vienna earlier for talks with President Vladimir Putin in St Petersburg. Novak returns to Austria’s capital for discussions among Saudi-led OPEC and the group’s allies on Friday.

The price of crude has fallen almost a third since October but U.S. President Donald Trump has demanded the Organization of the Petroleum Exporting Countries make oil even cheaper by refraining from output cuts.

MIDEAST STOCKS- #Dubai plummets to multi-year lows, oil trips up Saudi | Reuters

MIDEAST STOCKS-Dubai plummets to multi-year lows, oil trips up Saudi | Reuters:

Dubai’s stock market plunged to its lowest level in more than five years on Thursday as real estate stocks continued to slide while weak oil prices pressured the Saudi market.

Oil lost nearly 5 percent after producer group OPEC signalled that it may agree to a smaller output cut than expected and as concern over the economic impact of trade tensions hit global stocks.

The Dubai index slumped 2 percent to its lowest since September 2013, with its largest listed-developer, Emaar Properties, dropping 4.3 percent. The stock has lost a third of its value this year.

Brent oil price sinks under 60 on Saudi comments

Brent oil price sinks under 60 on Saudi comments:

Brent oil prices sank under $60 on Thursday after Saudi Arabia made remarks that were deemed overly cautious by analysts ahead of OPEC's latest output decision.
   

London's Brent North Sea oil sank $2.94 to $58.62 per barrel at 1035 GMT, compared with Wednesday's close, after Saudi Arabia's oil minister Khalid al-Falih said OPEC was seeking a "sufficient" cut in output to prop up prices. (AFP) AMS
AMS

#Dubai's Biggest Developer Can't Shake Off Real Estate Woes - Bloomberg

Dubai's Biggest Developer Can't Shake Off Real Estate Woes - Bloomberg:

Emaar Properties PJSC may have the backing of analysts but investors aren’t buying it, deterred by the gloomy prospects for Dubai’s real estate market.

Shares of the developer of the iconic Burj Khalifa skyscraper have lost 39 percent this year, bringing its estimated price-to-earnings ratio for the next 12 months to the lowest level since late 2009. The valuation has prompted six analysts to update their view with either a buy or overweight recommendation. So far to no avail.

A recovery of the local real-estate market doesn’t appear to be happening any time soon with rival developers predicting a difficult year ahead. Demand is faltering as the oversupply has become more evident mostly in the residential market.

As OPEC Meets, New Energy ETFs Spy Opportunity in Oil's Decline - Bloomberg

As OPEC Meets, New Energy ETFs Spy Opportunity in Oil's Decline - Bloomberg:

Cushing Asset Management has a lot riding on the meeting of OPEC in Vienna Thursday -- specifically, the success of its first exchange-traded funds.

On the heels of the worst month for crude since 2008, the Dallas-based investment firm, which manages about $3.3 billion in energy-related portfolios, is listing four sector ETFs connected to petroleum. The funds -- which focus on energy, utilities, transportation and the energy supply chain -- will look to deliver extra yield by investing some of their assets in companies set up as master limited partnerships.

It’s either terrible timing, or a stroke of genius. With oil having lost 22 percent in November and now trading at around $54 a barrel, OPEC could put a floor under the price by cutting its production. But with President Donald Trump pushing for lower prices, there’s a chance that exporters could let the price hold at this level, or slide even further.

Piggy Banks and Punishment: How the Ruble's Oil Link Came Apart - Bloomberg

Piggy Banks and Punishment: How the Ruble's Oil Link Came Apart - Bloomberg:

The last time crude fell off a cliff in late 2015, it took the currency of the world’s biggest energy exporter along for the ride. As Brent lurched below $30 a barrel, Russia’s ruble plummeted to its weakest level on record.

Last month, with oil charting its steepest drop in a decade, a comparable move in the ruble was nowhere to be seen.

A multitude of factors -- from central bank measures to sanctions -- have contributed to the shift. Below is a summary of the biggest contributors and how they have eroded the link.

London's MENA Capital and Dubai's Al Mal agree collaboration deal | ZAWYA MENA Edition

London's MENA Capital and Dubai's Al Mal agree collaboration deal | ZAWYA MENA Edition:

A tie-up between a London-based investment manager and Dubai's Al Mal Capital will see the former's managing partner, Khaled Abdel Majeed, move to Dubai and manage an enlarged team responsible for the investment strategy of a series of funds owned by both organisations.

MENA Capital said in a press release issued on Monday that Al Mal Capital had appointed Abdel Majeed as its lead portfolio manager for all of its MENA equities products including the Al Mal UAE Equity Fund launched in April 2006 and a new AZ Al Mal MENA Equities UCITS Fund, due to be launched early next year alongside Italian asset management firm Azimut.

In a telephone interview with Zawya on Wednesday, MENA Capital managing partner Roger Allen explained that Abdel Majeed, with whom he co-founded MENA Capital in 2004, would be directly employed by Al Mal Capital, but would also continue to run MENA Capital's own MENA Admiral hedge fund - a long-short fund launched in March 2006 - and the long-only MENA Alchemy Fund launched in August 2010.

Mideast Stocks: #Dubai suffers real estate slide, other markets steady | ZAWYA MENA Edition

Mideast Stocks: Dubai suffers real estate slide, other markets steady | ZAWYA MENA Edition:

Dubai's stock market fell sharply on Thursday, as real estate stocks fell further following a property price slide, while most major Middle Eastern markets remained steady.

Trading in other markets was tepid in the countdown to an OPEC-meeting expected to result in a supply cut, but the Dubai index  slipped 1.3 percent, after falling to its lowest in nearly three years in the previous trading session.

Property developer Emaar Properties was down 3.2 percent, while Deyaar Properties lost 2.6 percent.

UAE says Gulf Arab bloc still strong despite Qatar row | Reuters

UAE says Gulf Arab bloc still strong despite Qatar row | Reuters:

The United Arab Emirates said on Thursday the Gulf Cooperation Council remained valid despite a bitter row with Qatar that has fractured the bloc ahead of an annual summit next week.

Saudi Arabia, the UAE, Bahrain and non-GCC member Egypt have imposed a diplomatic and economic boycott on Qatar since June 2017 over allegations Doha supports terrorism. Qatar denies the charges and says the boycott aims to curtail its sovereignty.

“The main success of the council is in its economic aspects and the creation of a Gulf common market,” UAE Minister of State for Foreign Affairs Anwar Gargash tweeted.

OPEC waiting for Russia before deciding how much oil to cut | Reuters

OPEC waiting for Russia before deciding how much oil to cut | Reuters:

OPEC has made a planned cut in oil output effectively conditional on the contribution from non-OPEC producer Russia, delegates said on Thursday as the group gathered in Vienna for a meeting aimed at supporting battered oil prices. 

Five delegates said the group was waiting for news from Russia as Energy Minister Alexander Novak had flown back from Vienna for a possible meeting with President Vladimir Putin.

Novak returns to Vienna on Friday for talks between OPEC and its allies, following discussions among OPEC producers on Thursday.

Wednesday, 5 December 2018

#Dubai index hits new low as heavyweights extend losses

Dubai index hits new low as heavyweights extend losses:

Selling pressure grew on the Dubai Financial Market (DFM) general index as heavyweight counters such as Emaar Properties and Damac extended losses on Wednesday.

The index touched an intra-day low of 2,624.94 before recovering slightly to close at 2,632.15, down 1.63 per cent from the previous close.

On a declining trend, the index is down an average 7.1 per cent from the November 8 high of 2,833, and has formed continuous lows over the last week.

#UAE widens scope of penal code to fight corruption

UAE widens scope of penal code to fight corruption:

President His Highness Shaikh Khalifa Bin Zayed Al Nahyan has decreed changes to the UAE Penal Code that boost the country’s anti-corruption legislation.

The penal code is now more wide-ranging than before, covering both foreign and domestic acts of bribery. The decree covers both the public and private sectors, as well as international organisations.

The amendments to the penal code, which take effect immediately, have brought anti-corruption regulations in the UAE more in line with other jurisdictions, with the inclusion of foreign public officials.

Oil slips as Saudis says Opec deal still unresolved

Oil slips as Saudis says Opec deal still unresolved:

Oil retreated after the biggest two-day gain since June as investors grapple with doubts over whether the Organisation of Petroleum Exporting Countries (Opec) and its allies will curb production.

Futures slipped as much as 2.1 per cent in New York, paring gains of 4.6 per cent in the previous two sessions. Saudi Energy Minister Khalid Al Falih said it’s “premature” to say whether the producer group will agree on efforts to stabilise the oversupplied market and walked back recent statements about the size of any supply reduction.

Meanwhile, industry data signalled crude stockpiles in America expanded last week.

Brent likely to average $70 next year, says American bank

Brent likely to average $70 next year, says American bank:

Brent crude is expected to average $70 per barrel in 2019 according to an energy sector outlook from Bank of America Merrill Lynch (BAML).

It expects the WTI grade to average around $59, helped both by demand growth and a production cut from OPEC and some of its allies.

OPEC is due to meet today in Vienna, followed by talks with allies such as Russia on Friday.

Shale's growing profits at the mercy of OPEC cuts and Trump's tweets | Reuters

Shale's growing profits at the mercy of OPEC cuts and Trump's tweets | Reuters:

The recent nosedive in crude oil prices came just as shale producers had started delivering healthy returns after years of heavy spending to boost production and market share.

The shift has pleased investors who had grown weary of waiting for a payoff while watching the frenetic west Texas shale boom make the United States the world’s top oil producer and a major exporter.

The 29 percent drop in U.S. crude oil prices CLc1 since October now threatens those improved margins, and sustained prices below $50 per barrel could dent the value of shale reserves, which banks use to determine borrowing power.

#Qatar banks’ outlook for 2019 remains stable: Moody’s - The Peninsula Qatar

Qatar banks’ outlook for 2019 remains stable: Moody’s - The Peninsula Qatar:

With improving operating conditions, solid loan performance and strong capital, Qatar banks have stable outlook for 2019.

Moody’s Outlook for ‘GCC Banks for 2019’ showed Qatar’s banking system showed stability in all the seven components of credit drivers, including operating environment, asset risks, capital, profitability & efficiency, funding & liquidity and government support. Qatar is among the two countries in the region which ticked all these boxes as ‘stable’ in Moody’s Outlook for the GCC Banks.

The rating agency noted Qatari banks are most reliant on confidence-sensitive foreign funding, along with Bahrain, in the region. The 2019 Outlook expresses the rating agency’s expectation of how banks’ creditworthiness will evolve over the next 12 to 18 months in the GCC.

‘Made in #Qatar’ offers new co-operation ties with #Oman, says Qatar Chamber chairman

‘Made in Qatar’ offers new co-operation ties with Oman, says Qatar Chamber chairman:

The ‘Made in Qatar’ Oman edition, which concludes today (December 6) in Muscat, has opened new opportunities for Qatar and Oman to strengthen co-operation ties in a wide range of sectors, Qatar Chamber chairman Sheikh Khalifa bin Jassim al-Thani has said.

Sheikh Khalifa lauded the staging of the four-day exhibition, which was held for the second time outside Qatar, for its ability to attract thousands of visitors, especially major Omani investors.

He said the exhibition aims to promote Qatari industries and explore the needs of the Qatari market in new industries that meet local demand and supports Qatari industrial exports by encouraging Qatari businessmen and foreign investors to establish industrial projects in Qatar and take advantage of the incentives provided by the State to encourage investment in industrial sectors.

OPEC+ Recommends Oil Cuts, But No Deal Yet on Size of Reductions - Bloomberg

OPEC+ Recommends Oil Cuts, But No Deal Yet on Size of Reductions - Bloomberg:

A meeting of Saudi Arabia, Russia and other members of the OPEC+ group recommended an oil production cut, defying a Twitter plea from President Donald Trump to keep the taps open, but didn’t agree on how big any reduction should be.

The group secured Russia’s participation in six months of output curbs starting in January, Oman’s Oil Minister Mohammed Al Rumhy told reporters in Vienna as he left the meeting on Wednesday. Although the committee didn’t discuss specific cuts, there’s still time to agree on numbers and the final deal could remove about 1 million barrels a day from the market, he said.

Ministers from the core OPEC group, which doesn’t include Russia, will now meet tomorrow to seek a consensus on exactly who will cut and by how much. While Saudi Arabia, the group’s biggest producer, will shoulder most of the burden, the kingdom wants commitments from other countries before committing to a final deal.

#Kuwait's Jazeera to decide between Airbus, Boeing order next year | ZAWYA MENA Edition

Kuwait's Jazeera to decide between Airbus, Boeing order next year | ZAWYA MENA Edition:

Kuwait's Jazeera Airways will by the end of February ask Airbus AIR.PA and Boeing to pitch to supply up to 25 narrow-body jets, its chief executive told Reuters on Wednesday.

The discount airline previously said it was likely to place an order by the end of 2018 but had not said how many aircraft it would take.

Jazeera is likely to decide on the order "very quickly" after it issues a request for proposal (RFP) for between 20 and 25 aircraft, CEO Rohit Ramachandran said in a phone interview.

EU pushes for broader global use of euro to challenge dollar | Reuters

EU pushes for broader global use of euro to challenge dollar | Reuters:

The European Commission published on Wednesday non-binding proposals to boost the role of the euro in international payments and its use as a reserve currency to challenge the dominance of the dollar.

The move follows the decision by the United States to withdraw from an agreement with Iran on its nuclear program. That has forced many European companies to stop trading with Iran to avoid U.S. sanctions.

The European Commission called on companies and states to increase their use of the euro in energy contracts. It said it would study possible measures to promote the European Union currency in financial and commodity markets.

OPEC, Russia moving closer to agreeing oil cuts for 2019 | Reuters

OPEC, Russia moving closer to agreeing oil cuts for 2019 | Reuters:

A key monitoring committee of OPEC and its allies, including Russia, agreed on Wednesday on the need to cut oil output in 2019, two sources familiar with the decision said, adding that debates about volumes and the baseline for cuts were ongoing.

The committee, known as the Joint Ministerial Monitoring Committee that includes Saudi Arabia and Russia, met in Vienna on Wednesday, a day before the meeting of members of the Organization of the Petroleum Exporting Countries.

Saudi Arabia has been seeking to persuade Russia to cut oil production substantially with OPEC next year in a bid to halt a decline in the price of crude and prevent another global glut.

#Dubai's ruler snubs #Kuwait request to release frozen funds: letter | Reuters

Dubai's ruler snubs Kuwait request to release frozen funds: letter | Reuters:

Dubai’s ruler has resisted efforts by Kuwait to release nearly $500 million in frozen funds at the heart of a money laundering probe straining relations between the two Gulf allies, according to correspondence seen by Reuters.

The investigation is taking place as the United Arab Emirates tightens financial regulations to fight a perception among some foreign investors that it is a hot spot for illicit money flows owing to its free trade zones and proximity to Iran, the target of U.S. sanctions.

The frozen funds belong in part to the Kuwait government and have been frozen at Dubai’s state-owned Noor Bank since late 2017, when the emirate’s public prosecutor, in collaboration with Kuwait’s prosecutors, started probing the lawfulness of their transfer to Dubai from the Philippines.

Mideast Stocks: #Dubai dives on real estate, oil hurts major Gulf markets | ZAWYA MENA Edition

Mideast Stocks: Dubai dives on real estate, oil hurts major Gulf markets | ZAWYA MENA Edition:

The Dubai stock market fell to its lowest in nearly three years on Wednesday, pulled down by real estate stocks, while most major Middle Eastern markets slid on falling oil prices.

Oil prices were pulled down by a decline across financial markets, as concern about global growth and evidence of greater crude supply wiped out half of this week's gains.

"Both weak oil and uncertain near term outlook, be it real estate outlook in Dubai or geopolitics currently, are acting as a drag for many of these markets," said Nishit Lakhotia, head of research at SICO in Bahrain.

Bond-Market Bargain or Pariah? Oil Clouds Bahrain's Outlook - Bloomberg

Bond-Market Bargain or Pariah? Oil Clouds Bahrain's Outlook - Bloomberg:

Bahrain went from being a bond-market pariah to a darling this year after its Gulf neighbors came to the rescue to ward off any default. But falling oil prices have put the island kingdom’s finances under scrutiny again.

After outperforming Gulf peers in the third quarter, Bahrain’s dollar debt has been hurt by crude’s slump in the past two months. Investors are concerned about the government’s ability to put an austerity plan into action, with oil prices below what it needs to balance the budget. Bahrain’s cost-cutting targets, aimed at eliminating the budget deficit by 2022, are ambitious, Fitch Ratings said in October.

“Gulf Cooperation Council loans will help pull Bahrain back from the brink, but without meaningful fiscal reform, they just kick the can down the road,” said Brett Rowley, the Los Angeles-based managing director for emerging markets at TCW Group Inc, which holds about $198 billion. In addition, “a sharp drop in oil prices could jeopardize recently pledged assistance,” he said.

Oil Halts Advance as Al-Falih Says OPEC Deal Remains Unresolved - Bloomberg

Oil Halts Advance as Al-Falih Says OPEC Deal Remains Unresolved - Bloomberg:

Oil retreated after the biggest two-day gain since June as investors grapple with doubts over whether OPEC and its allies will curb production.

Futures slipped as much as 2.1 percent in New York, paring gains of 4.6 percent in the previous two sessions. Saudi Energy Minister Khalid Al-Falih said it’s “premature” to say whether the producer group will agree on efforts to stabilize the oversupplied market and walked back recent statements about the size of any supply reduction. Meanwhile, industry data signaled crude stockpiles in America expanded last week.

Crude breached $53 a barrel for the first time in almost two weeks after Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman agreed they would cooperate on managing the oil market. But in talks between officials after that meeting, Saudi Arabia argued Russian proposals, which implied Moscow would cut by a maximum of 150,000 barrels a day, would leave the kingdom shouldering too much of the burden.

Khashoggi Murder: How Graham Plans to Punish Saudis - Bloomberg #MBS

Khashoggi Murder: How Graham Plans to Punish Saudis - Bloomberg:

Give Lindsey Graham credit. When it comes to regime change, at least he is consistent. The Republican senator from South Carolina has supported the removal of dictators from U.S. adversaries such as Iraq and Libya, and now he wants new leadership for a crucial U.S. ally: Saudi Arabia. 

Crown Prince Mohammed bin Salman “is a wrecking ball,” Graham said at a press conference Tuesday after he and a small group of senators had received a CIA briefing on the October murder of Washington Post journalist Jamal Khashoggi. “If the Saudi government is going to be in the hands of this man for a long time to come, I find it very difficult to be able to do business because I think he’s crazy, I think he’s dangerous and he has put this relationship at risk.”

The pontifications of senators on foreign policy usually don’t count for much. Most of the constitutional power is invested in the executive branch. Senators get to advise and consent on treaties, diplomatic nominations and generals, but statecraft is left to the president and his advisers.

OPEC Deal in Balance as Saudi Arabia, Russia Meet for Talks - Bloomberg

OPEC Deal in Balance as Saudi Arabia, Russia Meet for Talks - Bloomberg:

As ministers from OPEC and its allies arrive in Vienna for crucial talks, all have made clear they agree on the need for a cut in oil production. But none have explained how they’ll turn that desire into a reality.

With just a day to go before a critical OPEC summit, Saudi Arabia and Russia are set to meet Wednesday for make-or-break preparatory talks that’ll set the direction for the oil market. The stakes are high after prices suffered their largest monthly drop since the global financial crisis in November, and politicians including Donald Trump call on OPEC to keep energy prices in check.

“There is little disagreement among OPEC members over the need to cut, but there is not yet consensus over how much,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. “Communicating a large cut, if one can be agreed upon, will still be fraught with challenges given complicated U.S.-Saudi relations.”

Etihad discusses rescue deal for India's Jet Airways with bankers: sources | Reuters

Etihad discusses rescue deal for India's Jet Airways with bankers: sources | Reuters:

Abu Dhabi-based Etihad Airways, the second largest shareholder of Jet Airways Ltd (JET.NS), is holding talks with the debt-laden Indian carrier and its bankers on a rescue plan, two sources aware of the matter told Reuters. 

Shares in Jet Airways rose as much as 3 percent on Wednesday while the overall Mumbai market .BSESN was down 0.6 percent.

Executives from Etihad, which owns a 24 percent stake in Jet, and the Indian carrier have met some of the airline’s bankers from State Bank of India (SBI) (SBI.NS) in Mumbai in recent days to discuss ways to address its cash flow issues and evaluate the carrier’s future business plan, the sources said.

UAE economy to grow more than 3 percent in 2019: official | Reuters

UAE economy to grow more than 3 percent in 2019: official | Reuters:

The United Arab Emirates economy will grow between 2.5 and 3 percent in 2018, before rising to more than 3 percent in 2019, its economy minister, Sultan bin Saeed al-Mansouri, told reporters on Wednesday.

The latest projections are in line with forecasts made by the International Monetary Fund, which said in October it expects the Arab world’s second biggest economy is likely to expand 2.9 percent this year and 3.7 percent next year.

Iran won't discuss its OPEC quota while under sanctions: agency | Reuters

Iran won't discuss its OPEC quota while under sanctions: agency | Reuters:

Iran will not discuss its OPEC quota as long as it is under sanctions, Iranian Oil Minister Bijan Zanganeh was quoted by the state news agency IRNA as saying on Wednesday.

“As long as Iran is under sanctions, the Islamic Republic’s OPEC quota will not be discussed with anyone,” Zanganeh said, speaking ahead of a meeting of the Organization of the Petroleum Exporting Countries.

MIDEAST STOCKS-Dubai hits near 3-year low, weak oil prices weigh on Gulf | Reuters

MIDEAST STOCKS-Dubai hits near 3-year low, weak oil prices weigh on Gulf | Reuters:

Saudi Arabia’s stock market slid on Wednesday, as falling oil prices weighed on its banks and petrochemical stocks, while Dubai fell to its lowest in nearly three years, hurt by a drop in property stocks.

Oil prices fell 2 percent overnight, pulled down by swelling U.S. inventories and a plunge in global stock markets as China’s government warned of increasing economic headwinds.

The Saudi Arabian index lost 0.7 percent, with Al Rajhi Bank falling 0.5 percent and top petrochemical producer Saudi Basic Industries Corporation (SABIC) shedding 0.7 percent.

#Qatar Can Annoy Saudi Arabia More by Staying in Gulf Alliance - Bloomberg

Qatar Can Annoy Saudi Arabia More by Staying in Gulf Alliance - Bloomberg:

Qatar’s surprise decision to leave OPEC, announced for maximum effect ahead of the organization’s meeting this week in Vienna, has inevitably raised questions about whether it might also quit the Gulf Cooperation Council. The GCC’s annual summit is Dec. 9 in Riyadh, and a similar announcement would undoubtedly irritate and embarrass Saudi Arabia. Tempting as this might be, the Qataris would do well to stay put.

The explanations offered by Qatar for its withdrawal from the Organization of the Petroleum Exporting Countries after 57 years could easily — indeed, more convincingly — be used to justify an exit from the GCC.

Sheikh Hamad bin Jassim bin Jaber Al Thani, Qatar’s former prime minister, has tweeted that OPEC “is only being used for purposes aimed at harming our national interest.” That goes double for the GCC, where two of its six members — Saudi Arabia and the United Arab Emirates — are prime movers in the economic blockade of Qatar. (The blockade has been going on for 18 months and counting, and it stems from Saudi accusations that Qatar is destabilizing the region by cozying up to Iran, charges Doha contests.)

Foreign Flows Favor Qatar Over Saudi Stocks as Gulf Spat Lingers - Bloomberg

Foreign Flows Favor Qatar Over Saudi Stocks as Gulf Spat Lingers - Bloomberg:

Foreign stock investors have made clear which side of the Saudi Arabia-versus-Qatar conundrum they favor, at least in 2018.

Overseas institutional investors were net buyers of about $2.3 billion of shares traded on Doha’s bourse this year, more than triple the foreign flows into Riyadh, according to stock-exchange data compiled by Bloomberg.

Inflows have picked up in Qatar this year after several large-cap companies announced they were easing limits on foreign ownership, prompting an adjustment of their weighting in benchmarks used by emerging-market fund managers. In Saudi Arabia, overseas investors were net buyers of as much as $3 billion at a peak in June, but that figure fell to around $700 million after a sell-off following the murder of newspaper columnist Jamal Khashoggi at the Saudi consulate in Istanbul in October.

Tuesday, 4 December 2018

Abu Dhabi index surges post MSCI rebalancing

Abu Dhabi index surges post MSCI rebalancing:

The Abu Dhabi index jumped the most in a year as markets adjusted post the MSCI rebalancing of FAB and Etisalat shares even as trading remained thin in other stocks.

The Abu Dhabi Securities closed 2.68 per cent higher at 4,898.15. FAB shares closed 3.68 per cent higher at Dh14.10. Etisalat shares closed 3.37 per cent higher at Dh17.18. The rest of the market remained tight with marginal gains. Abu Dhabi Commercial Bank closed 3.82 per cent higher at Dh8.15. Traded value was placed at Dh880 million. Dana Gas closed 0.54 per cent higher at Dh0.93.

The Dubai Financial Market general index closed 0.27 per cent higher at 2,675.87, Emaar Properties closed 1.78 per cent higher at Dh 4.58. Dubai Investments closed 4 per cent lower at Dh1.29. Dubai Islamic Bank closed half a per cent higher at Dh5.27.

Is there a need for a supply cap in Dubai’s real estate market?

Is there a need for a supply cap in Dubai’s real estate market?:

When the 2007 global financial downturn started in the US, there were talks about the “too-big-to-fail” banks that made the economy fragile. In the US context such failure was disastrous to the greater economy, and, therefore, the government stepped in to support and bail them out.

Now let’s look at the “too-big-to-fail” concept in the context of the Dubai real estate market. With the low barrier to the entry of players, many developers have been attracted to launch projects in Dubai. Capitalising on the off-plan model, they managed to grow in size in a short time. Launching projects on a monthly basis became a standard feature in Dubai, especially in the last few years. The trust in Dubai real estate laws and regulations as well as great off-plan deals boosted the supply of units in the market. But this means there is a systemic risk to the real estate system.

Apart from the abilities of developers, and their capabilities to take on these projects, there is the constant threat of oversupply. With more than 400 real estate developers in Dubai, the issue of oversupply is always there. Some of these developers have boasted a huge portfolio of off-plan projects and a failure to deliver would naturally impact the property market by hitting people’s confidence in off-plan. We were lucky to have the off-plan market revived and become attractive in the last few years given the affordability and flexibility in payments provided. We need to keep people’s trust in this model and thus there is a need to make sure that there are enough tools to make developers deliver on time and the quality promised.

Banks’ financial profiles should stay stable in 2019: S&P Global - The Peninsula Qatar

Banks’ financial profiles should stay stable in 2019: S&P Global - The Peninsula Qatar:

GCC (Gulf Cooperation Council) banks’ financial profiles should remain stable in 2019, absent any unexpected geopolitical shock. However, the recent drop in oil prices does not bode well for these banking sectors, S&P Global said in its “Global Banks 2019 Outlook”, yesterday.

The Bank lending growth should stabilise at around 5 percent in 2019, as stronger public investments raise economic growth in the region overall.

“We expect profitability to stabilise--with a return on assets at about 1.6 percent and a net interest margin at 3 percent in 2018-- benefitting from the higher interest rates and significant non-interest-bearing deposits,” the global ratings agency said.

QFC committed to Islamic finance development: CEO

QFC committed to Islamic finance development: CEO:

Chief executive officer of Qatar Financial Centre (QFC) Yousuf Mohamed al-Jaida affirmed that the centre recognises the importance of endowments and Islamic finance in general and is committed to supporting the development of these two sectors through the QFC platform.

He said in a speech at the opening session of the global conference on Awqaf that the prestigious position of Qatar qualifies it to become a leading country in the field of Islamic finance and the management of Waqf institutions, which correspond to the pillars of economic and social development in the Qatar National Vision 2030.

He pointed out that the Awqaf institutions have a historic part in the ancient Islamic heritage, in addition to the possibilities and capabilities made them envisage a future of greater success and prosperity, indicating that the need now is urgent for the existence of active and effective Waqf institutions.

OPEC Oil Production Cuts Still Up in the Air: Reality Check - Bloomberg

OPEC Oil Production Cuts Still Up in the Air: Reality Check - Bloomberg:

Saudi Energy Minister Khalid Al-Falih said he saw an oversupplied oil market but that it’s “premature” to say what OPEC and its allies will agree in Vienna this week. The comments come just days after Russia and Saudi Arabia agreed to extend their cooperation to balance the oil market into 2019.

In an interview with Bloomberg, Al-Falih said Moscow backs output curbs “in principle,” but that all the members of the so-called OPEC+ group, which includes Russia and Kazakhstan, needed to come together for a cut to go ahead.

The OPEC advisory committee recommended a cut of 1.3 million barrels a day last week, but since then the group got an unexpected hand from Canada’s 325,000 barrels a day reduction.

#Qatar Petroleum cuts November land crude price to $66.95 | ZAWYA MENA Edition

Qatar Petroleum cuts November land crude price to $66.95 | ZAWYA MENA Edition:

Qatar Petroleum cut the price for November land crude oil to $66.95 a barrel from $81.25 in October, a 17.6 percent drop, according to Qatar News Agency (QNA).

It cut the price for November marine crude oil to $65.90 from $79.90 in October, a 17.5 percent drop, QNA said.

UAE and India sign 35 billion rupees currency swap agreement | Reuters

UAE and India sign 35 billion rupees currency swap agreement | Reuters:

India and the United Arab Emirates on Tuesday signed a currency swap agreement to boost investment and enable direct trade without using dollars or other international currencies.

The swap is for 2 billion dirhams or 35 billion Indian rupees ($496 million), depending on which central bank requests the amount, an Indian embassy statement said.

“The bilateral currency swap agreement between India and the UAE is expected to reduce the dependency on hard currencies like the U.S dollar,” the statement said, adding that the two central banks had agreed the deal.

#Qatar's emir receives Saudi invite to attend GCC summit: Qatar News Agency

Qatar's emir receives Saudi invite to attend GCC summit: Qatar News Agency:

Qatar’s emir, Tamim bin Hamad Al Thani, has received an invitation from Saudi Arabia’s King Salman to attend a summit of the Gulf Cooperation Council on Dec. 9, Qatar News Agency said on Tuesday.

Qatar has not confirmed what level of representation it would be sending to the summit yet.

Saudi cites national security to block WTO case brought by #Qatar | Reuters

Saudi cites national security to block WTO case brought by Qatar | Reuters:

Saudi Arabia has told the WTO that national security concerns mean it cannot allow the world trade body to settle an intellectual property dispute with Qatar, according to a transcript seen by Reuters. 

Qatar launched the dispute in October, saying Saudi Arabia was blocking Qatari-owned broadcaster beIN and refusing to take effective action against alleged piracy of beIN’s content by “beoutQ”, a sophisticated pirating operation.

It is unclear who owns beoutQ or where it is based. Saudi officials say Riyadh is committed to fighting piracy - in June they said the kingdom had confiscated 12,000 pirating devices.

OPEC has problems with some oil producers, reasons for Qatar's exit must be examined: Iran oil minister | Reuters

OPEC has problems with some oil producers, reasons for Qatar's exit must be examined: Iran oil minister | Reuters:

OPEC has problems with some oil producers, and the reasons for Qatar’s exit from the organization must be examined, Iranian Oil Minister Bijan Zanganeh said on Tuesday, according to the Islamic Republic News Agency (IRNA).

Qatar said on Monday it will quit OPEC to focus on gas in a swipe at Saudi Arabia, the de facto leader of the oil exporting group which is trying to show unity in tackling an oil price slide.

“Examining the reasons for Qatar’s exit from OPEC is a necessity,” Zanganeh said. He added, “OPEC has big problems from some oil producers which Qatar is not a part of.”

Mideast Stocks: Egypt hits 18-month low, FAB lifts Abu Dhabi | ZAWYA MENA Edition

Mideast Stocks: Egypt hits 18-month low, FAB lifts Abu Dhabi | ZAWYA MENA Edition:

Egypt's blue-chip index slumped to an 18-month low on Tuesday, weighed down by Commercial International Bank (COMI) and concern over a proposed law on taxation of Treasury holdings, while Abu Dhabi rose on banking sector gains.

The Egyptian index dropped 2.4 percent, with 26 of 30 stocks falling. The country's biggest lender, COMI, fell for a third straight day, losing 2.5 percent.

COMI and the index have been dented by the proposed legal changes, which could result in a larger tax bill for banks on despite the nominal tax rate remaining unchanged, said Amr Hussein Elalfy, head of research at Shuaa Securities Egypt.

Opec: why Trump has Saudi Arabia over a barrel | Financial Times

Opec: why Trump has Saudi Arabia over a barrel | Financial Times:

ReneĆ© Earls has lived her whole life in west Texas, and watched oil booms come and go, but she has never seen anything like the buzz of activity in the industry today. “We are a hopping spot,” she says. “If you’re not working here, that’s because you’re not looking for a job, or you are unemployable . . . If you have a skill and want to work, you can name your price.”

Ms Earls is chief executive of the chamber of commerce in Odessa, in the heart of the Permian basin, the shale formation stretching from west Texas into New Mexico that is the red-hot centre of the latest US oil boom. Production in the region rose by 1m barrels a day in the year to August, contributing to a record-breaking 2.1m b/d increase in US output that has made the country the world’s largest crude producer.

The shale boom has not only transformed once rundown towns deep in the west Texas desert; it is increasingly reshaping the landscape of international politics. The emergence of the US as a born-again energy superpower — one of the key factors in the recent fall in oil prices — has led politicians in Washington to weigh how it might reshape some of its oldest alliances, raising uncomfortable questions for the oil producers of the Middle East .

$11 Trillion Emerging-Market Lure That Heralds 2019 Revival - Bloomberg

$11 Trillion Emerging-Market Lure That Heralds 2019 Revival - Bloomberg:

First, the bad news: corporate earnings across emerging markets aren’t as good as analysts hoped.

In four out of every five emerging economies, company finances have fallen short of estimates that were made 12 months ago, according to a study of 25 benchmarks. That’s even after analysts cut their forecasts by 6 percent since a peak in April.

Now the good news. Stocks across developing nations aren’t as risky as their U.S. counterparts, and they’re good value for money. And thanks to a sell-off this year, $11 trillion of equities are about the cheapest since the financial crisis.

Saudi Minister Says Premature to Say If OPEC+ to Cut Output - Bloomberg

Saudi Minister Says Premature to Say If OPEC+ to Cut Output - Bloomberg:

Three days after Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman sent crude prices surging with an agreement to extend cooperation on oil, the kingdom’s top energy official made clear that the terms of a deal remain unresolved.


In an interview with Bloomberg, Saudi Energy Minister Khalid Al-Falih said he saw an oversupplied market, but cautioned that all the members of the OPEC+ group, which includes allies such as Russia and Kazakhstan, needed to come together for a cut to go ahead.

Moscow backs output curbs “in principle,” but it’s “premature” to say what they will agree in Vienna this week, Al-Falih said. He also walked back previous statements about the size of any supply reduction, saying the group is likely to cut but still needs to “figure out what needs to be done and by how much.”

Qatar's OPEC Exit Shows Growing Sway of Moscow-Riyadh Oil Axis - Bloomberg

Qatar's OPEC Exit Shows Growing Sway of Moscow-Riyadh Oil Axis - Bloomberg:

When Qatar shocked the oil world on Monday by announcing plans to quit the OPEC cartel after 57 years, its energy minister said the decision was made for "technical" reasons.

That story didn’t last long. A few hours later, a leading member of the country’s ruling family used Twitter to blast the Organization of Petroleum Exporting Countries, a group where Qatar was once a diplomatic force despite being a relative minnow in oil production terms, accounting for less than 2 percent of total output.

"The withdrawal of Qatar from OPEC is a wise decision, as this organization has become useless and does not bring us anything," said former prime minister Hamad bin Jassim bin Jaber Al Thani. "It is just being used for purposes that harm our national interest.”

OPEC works on deal to cut output, still needs Russia on board | Reuters

OPEC works on deal to cut output, still needs Russia on board | Reuters:

OPEC and its allies are working towards a deal this week to reduce oil output by at least 1.3 million barrels per day, four sources said, adding that Russia’s resistance to a major cut was so far the main stumbling block.

OPEC meets on Thursday in Vienna, followed by talks with allies such as Russia on Friday, amid a drop in crude prices caused by global economic weakness and fears of an oil glut due largely to a rise in U.S. production.

The producer group’s de facto leader, Saudi Arabia, has indicated a need for steep reductions in output from January but has come under pressure from U.S. President Donald Trump to help support the world economy with lower oil prices.

Mideast Stocks: FAB boosts Abu Dhabi sharply, Gulf mostly gains | ZAWYA MENA Edition

Mideast Stocks: FAB boosts Abu Dhabi sharply, Gulf mostly gains | ZAWYA MENA Edition:

The Abu Dhabi stock market rose sharply on Tuesday on the back of banks, enjoying its biggest one-day gain in two years, while real estate stocks buoyed Dubai.

The United Arab Emirates markets did not trade for two days because of a national holiday. When they reopened, the Abu Dhabi index .ADI jumped 2.6 percent, with the emirate's largest lender, First Abu Dhabi Bank, adding 4.4 percent in low volume after sliding for three sessions.

Tuesday is the bank's first trading day after its weighting in MSCI's emerging markets index doubled, and some passive funds linked to the index may have entered the stock on Tuesday. Meanwhile, Abu Dhabi Commercial Bank added 2.3 percent.

Dubai property prices sink 7.4 percent as UAE jobs growth slows | Reuters

Dubai property prices sink 7.4 percent as UAE jobs growth slows | Reuters:

Prices for Dubai’s residential real estate sank 7.4 percent in the third quarter of 2018 from a year earlier, with the drop accelerating from a 5.8 percent fall in the second quarter, the United Arab Emirates central bank said in a report on Tuesday.

Prices have been falling quarter-on-quarter almost continually since the start of 2017 because of a worsening supply/demand balance. The central bank quoted the REIDIN residential sales price index, which showed prices fell 2.5 percent from the previous quarter in July-September.

Residential real estate prices in neighboring Abu Dhabi, the other big emirate in the UAE, dropped 6.1 percent year-on-year in the third quarter after a 6.9 percent slide in the second quarter.

Oil jumps 2 percent on expectations of production cuts | Reuters

Oil jumps 2 percent on expectations of production cuts | Reuters:

Oil prices rose more than 2 percent on Tuesday, extending gains ahead of expected output cuts by producer cartel OPEC and a mandated reduction in Canadian supply. 

Brent crude oil LCOc1 rose $1.55 or 2.5 percent to a high of $63.24 by 0955 GMT. U.S. light crude CLc1 was $1.25 higher at $54.20.

Both benchmarks climbed around 4 percent on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed at a meeting of the Group of 20 industrialized nations (G20) to pause an escalating trade dispute.

Monday, 3 December 2018

Why would Doha choose to leave Opec now? - The National

Why would Doha choose to leave Opec now? - The National:

As delegates descend on Vienna, the city of diplomatic intrigue, for Thursday’s Opec meeting, one member is making its last trip. Saad Al Kaabi, Qatar’s minister for energy affairs, announced on Monday that the country would leave the oil exporters’ organisation in January.

Qexit is a surprise, but not a severe blow, after tumultuous change at Opec over the past three years. The big questions are why would Doha choose to leave now? And what does it mean for the group’s future?

Qatar is not a founder member, but it was the first to join the original five of September 1960, entering in 1961. It is the first Middle Eastern member to depart. There are, though, precedents for countries leaving the organisation.

Dubai’s developers find their comfort levels in ready projects

Dubai’s developers find their comfort levels in ready projects:

Developers in Dubai have every reason to be cautious with their offplan forays. In the year to end November, offplan sales are down 27 per cent and with limited opportunities in December to narrow the gap with last year.

But these developers are learning to adjust to such sentiments — some of the big names are taking feelers from potential buyers and, where possible, locking in their interest. This way they do not have to make a great deal of marketing noise or spend heavily on promotions. Instead they are dipping into their buyer databases and uploading eye-catching sales brochures of their latest project.

As soon as they get sufficient sales numbers going on these projects via private sales, they can then make the switch to an official launch and all of the accompanying razzmatazz. But for now, it’s working the phone lines and sending those mails using every possibility in their databases.

QSE benchmark index jumps on historic Opec announcement day - The Peninsula Qatar

QSE benchmark index jumps on historic Opec announcement day - The Peninsula Qatar:

Qatar’s stock market rose sharply yesterday, the day the country made the surprise announcement to quit from the Organization of the Petroleum Exporting Countries (Opec). The world’s largest liquefied natural gas exporter announced that it would be focusing more on gas.

The QSE benchmark index rose 1.30 percent or 134.37, supported by banks and industrials. Oil prices jumped by more than 5 percent yesterday after the US and China agreed to a 90-day truce in a trade dispute, and ahead of a meeting this week of Opec that is expected to cut supply.

The banking sector rose 1.55 percent with Commercial Bank rising the most by 2.20 percent. QNB gained 1.77 percent as QIB and QIIB added 1.80 percent and 1.56 percent, respectively. Bellwether Industries Qatar (IQ) advanced 1.92 percent. Telecom giant Ooredoo gained 1.81 percent.

Qatar to continue seeking oil deals abroad: Al-Kaabi

Qatar to continue seeking oil deals abroad: Al-Kaabi:

Qatar will continue to produce oil and seek deals in countries including Latin America’s top oil producer Brazil, said HE the Minister of State for Energy Affairs Saad bin Sherida al-Kaabi.

“We are not saying we are going to get out of the oil business, but gas production would remain Qatar’s top priority,” al-Kaabi said at a press conference yesterday, where he announced Qatar’s decision to withdraw from the Organisation of the Petroleum Exporting Countries (Opec) in January, 2019. 

“As you all know, Qatar has worked diligently during the past few years to develop a future strategy in the oil and gas sector based on growth and expansion, both in its activities in Qatar and internationally.

Why the Breach Between Saudis, Qataris Goes On and On: QuickTake - Bloomberg

Why the Breach Between Saudis, Qataris Goes On and On: QuickTake - Bloomberg:

When four Arab states led by Saudi Arabia cut diplomatic ties and transportation links with Qatar in June 2017, there were expectations that the rulers would resolve the spat quietly among themselves, as they did a similar dispute three years earlier. Instead, Saudi Arabia issued tough demands, Qatar refused to kowtow to its powerful Arab neighbor, and the breach hardened. Now, Qatar has said it will leave OPEC in the new year in a rare rupture of the Saudi-dominated oil cartel.

1. What’s the meaning of Qatar quitting OPEC? 

Qatar says it’s leaving to focus on production of liquefied natural gas, a much bigger market for the country than oil. Qatar is the world’s largest exporter of LNG and accounts for less than 2 percent of OPEC’s output. Despite the official explanation, Qatar’s move was widely seen as resulting from its feud with Saudi Arabia and its allies.

#Qatar Leaving OPEC Is An Ominous Sign For OPEC - Bloomberg

Qatar Leaving OPEC Is An Ominous Sign For OPEC - Bloomberg:

The immediate question raised by Qatar leaving OPEC is, of course, what to call this? Qatarexit, or even Qatexit, sound wrong. Qatar-ta-for-now has a nice ring to it, even if it’s a tad unwieldy. Maybe just go with Qatout.

While that one is a little aggressive, it at least conveys one of the factors likely behind the move. Saudi Arabia has been gunning for Qatar, launching a blockade last year aimed at bringing the Gulf state to heel on issues such as its relations with Iran. With OPEC’s de facto leader having pushed Qatar out into the cold already, the diplomatic benefits of membership can hardly seem that compelling in Doha.

In purely mathematical terms, Qatar’s decision to leave makes little difference: It accounts for less than 2 percent of OPEC’s crude oil output. The country’s clout in energy markets stems from something outside of OPEC’s purview, namely Qatar’s status as the world’s largest exporter of liquefied natural gas. Yet the symbolism of a long-standing, Middle Eastern member leaving is inescapable.

Iran Warns Oil Will Slump to $40 If OPEC Fails to Cut Production - Bloomberg

Iran Warns Oil Will Slump to $40 If OPEC Fails to Cut Production - Bloomberg:

Oil prices will slump to $40 a barrel unless OPEC and its allies cut output significantly, and the group is unlikely to succeed in reviving the market, an Iranian official said.

Production will need to be reduced by at least 1.4 million barrels a day to prevent oversupply, Iranian OPEC Governor Hossein Kazempour Ardebili said in an interview. While the Islamic Republic itself won’t participate in any cuts while U.S. sanctions on its exports remain in place, Kazempour said the group may be unable to reach an agreement to curb supply when it meets in Vienna later this week.

The comments show the divisions within OPEC as it seeks consensus on next year’s supply policy, with crude having slumped into a bear market last month. While Saudi Arabian Crown Prince Mohammed bin Salman agreed with Russian President Vladimir Putin to continue managing the market, Qatar in a surprise move on Monday said it will exit the producers’ cartel in 2019, threatening its cohesion. OPEC decisions need to be unanimous to be implemented.

Qatar's Departure From OPEC Suggests Gulf Rift Is Here to Stay - Bloomberg

Qatar's Departure From OPEC Suggests Gulf Rift Is Here to Stay - Bloomberg:

The campaign to isolate Qatar, launched 18 months ago by Saudi Arabia and three other Arab nations, may have peaked with a tweet in August.

That’s when Saud al-Qahtani, a top aide to Saudi Arabia’s Crown Prince Mohammed bin Salman, told his 1.36 million followers that he was “waiting eagerly” for news on a 40-mile canal construction project which would turn Qatar into an island and place a radioactive waste dump on its border, changing the geopolitical map of the Gulf forever.

Nothing has been heard since of the project, which was never officially confirmed, and al-Qahtani was demoted in the wake of the Oct. 2 murder of Washington Post columnist Jamal Khashoggi at the Saudi consulate in Istanbul. Yet Monday’s announcement by Qatar that it will leave the Saudi-dominated Organization of Petroleum Exporting Countries, or OPEC, on Jan. 1 suggests that the proposal’s underlying threat -- of a permanent rift in the Gulf -- is happening anyhow.

Double trouble: #UAE real estate firms defenceless against oversupply and interest rates | ZAWYA MENA Edition

Double trouble: UAE real estate firms defenceless against oversupply and interest rates | ZAWYA MENA Edition:

The United Arab Emirates’ real estate market has been experiencing an oversupply of units across all real estate categories, ranging from residential to commercial. Over a span of two years, property prices have plummeted, weighing on developers’ profit margins and squeezing their cash flows.

Initially, lower margins were considered the cost of doing business in a saturated market whilst attempting to maintain market share. However, as interest margins contracted, global macros took another swing at property developers through the steady, but sharp, climb in interest rates, making borrowing costs significantly higher.

“Pure-play” developers have managed to manoeuvre through lower margins and oversupply by ramping up credit sales in attempt to secure future cash flows and reduce their exposure to the realty market by reducing inventory and focusing on receivables.

Saudi's AHAB turns to new bankruptcy law to settle with creditors | Reuters

Saudi's AHAB turns to new bankruptcy law to settle with creditors | Reuters:

Conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) has become the first company to file for a settlement under Saudi Arabia’s new bankruptcy law, seeking to resolve the kingdom’s longest-running and largest debt dispute.

The company hopes the move will help to bring a conclusion to creditor talks that have rumbled on since AHAB and Saad Group defaulted on about $22 billion of debt in 2009.

The law, which came into effect in August 2018, is the latest of the kingdom’s reforms aimed at attracting foreign investment and reducing the economy’s dependence on oil.

Oil surges almost 4 percent on trade truce, expected supply cuts | Reuters

Oil surges almost 4 percent on trade truce, expected supply cuts | Reuters:

Oil prices jumped nearly four percent on Monday after the United States and China agreed to a 90-day truce in a trade dispute and Canada’s Alberta province ordered a production cut, while exporter group OPEC looked set to reduce supply. 

Brent crude futures rose $2.23 to settle at $61.69 a barrel, a 3.75 percent gain. U.S. West Texas Intermediate (WTI) crude futures gained $2.02 to settle at $52.95 a barrel, a 3.97 percent increase.

Both benchmarks surged more than 5 percent earlier in the session.

#UAE says #Qatar's decision to leave OPEC admission of decline of Doha's role | Reuters

UAE says Qatar's decision to leave OPEC admission of decline of Doha's role | Reuters:

The United Arab Emirates said on Monday Doha’s decision to leave OPEC was a reflection of the decline of its influence.

“The political aspect of Qatar’s decision to quit OPEC is an admission of the decline of its role and influence in light of its political isolation,” Anwar Gargash, UAE minister of state for foreign affairs, said in a tweet.

Doha, one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter, said earlier on Monday it was quitting OPEC from January to focus on its gas ambitions.

Breakingviews - #Qatar’s OPEC exit is a deft way to irritate Saudi | Reuters

Breakingviews - Qatar’s OPEC exit is a deft way to irritate Saudi | Reuters:

Qatar has found a new way to irritate Saudi Arabia. Since June last year, the tiny gulf state of 2.6 million people has dealt with a hair-raising blockade by its neighbour with relative insouciance. Now it is equally nonchalantly leaving the Organization of the Petroleum Exporting Countries, the once all-powerful club of which Saudi is the de facto leader.

Qatar has good reasons to do so. For one, it can afford to. In October Doha provided only 600,000 barrels per day of OPEC’s 33 million bpd output level, whereas Saudi provided 10.7 million bpd. Developing its huge, lower-carbon natural gas reserves should push output in barrel-of-oil-equivalent terms from 4.8 million boe to 6.5 million boe during the next decade. And OPEC membership hasn’t stopped Saudi and fellow member United Arab Emirates cutting off economic links.

Indonesia, Gabon and Ecuador have all suspended membership since OPEC’s 1960 formation. But the departure of Qatar, on board since 1961, comes at a time when there are more and more reasons for smaller members of the group to question its benefits. They often get a raw deal anyway, because spare production capacity is largely concentrated in Saudi hands. In the summer, for example, OPEC’s decision to pump more oil allowed Riyadh to grab both market share and huge profits.