Saudi Arabia's $750 Billion Bet Drives Brent Oil Below $54:
"With Brent crude oil falling on Monday below $54 a barrel for the first time in more than five years, it is clear that Saudi Arabia is making a massive $750 billion bet in 2015 that the oil kingdom can endure lower oil prices longer than other major oil producing countries both within and outside OPEC, even including American shale.
A flood of new oil from U.S. shale producers and Canadian tar sands companies coupled with softening demand from China may have set the stage, but Saudi Arabia is now firmly driving the process that has seen oil prices plunge in a matter of months. Starting in October, Saudi Arabia indicated to global markets that it would not materially cut production alone and would restrain itself from cutting production unless other major oil producing countries also joined in such an effort.
“The most important thing for the Saudis is market share,” says Prof. F. Gregory Gause, a Saudi expert at Texas A&M University. “They are not going to sacrifice it, they will play chicken with other producers, whether Iranian or American shale producers in order not to lose market share and the only way they will cut production is if they get an agreement with a broad array of OPEC and non-OPEC producers to take a fair amount of oil off the market.”"
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Monday, 5 January 2015
MIDEAST STOCKS-Gulf markets slide as oil hits fresh low | Reuters
MIDEAST STOCKS-Gulf markets slide as oil hits fresh low | Reuters:
"Gulf stock markets extended their declines in broad sell-offs on Monday as the price of Brent crude oil fell below $55 per barrel for the first time since 2009.
Brent futures tumbled more than 3 percent as data showed that Russian oil output and Iraq's oil exports had hit their highest levels in decades.
Saudi Arabia, Dubai and Oman have announced large state budgets in the past couple of weeks, suggesting that lower oil revenues will not translate into spending cuts and that economic growth in the region will stay strong."
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"Gulf stock markets extended their declines in broad sell-offs on Monday as the price of Brent crude oil fell below $55 per barrel for the first time since 2009.
Brent futures tumbled more than 3 percent as data showed that Russian oil output and Iraq's oil exports had hit their highest levels in decades.
Saudi Arabia, Dubai and Oman have announced large state budgets in the past couple of weeks, suggesting that lower oil revenues will not translate into spending cuts and that economic growth in the region will stay strong."
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Iran ‘Won’t Give In’ After 60% Decline in Oil Exports - Bloomberg
Iran ‘Won’t Give In’ After 60% Decline in Oil Exports - Bloomberg:
"Iran’s oil exports have fallen 60 percent to 1 million barrels a day, the Tehran-based Shargh newspaper reported, citing comments by Oil Minister Bijan Namdar Zanganeh.
Iran, constrained by international sanctions on its energy and financial industries, “won’t give in over 1 million barrels a day,” the paper reported Zanganeh as saying yesterday at a conference in Tehran. The minister didn’t elaborate, nor did he specify dates for the 60 percent cut in the nation’s exports, according to Shargh.
U.S. and European sanctions on Iran over its nuclear program have curbed foreign investment and hindered development of the Persian Gulf state’s oil and natural gas reserves. Iran produced 2.77 million barrels a day of oil in December, down from an average of 3.58 million in 2011, data compiled by Bloomberg show. Oil exports are its main source of income."
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"Iran’s oil exports have fallen 60 percent to 1 million barrels a day, the Tehran-based Shargh newspaper reported, citing comments by Oil Minister Bijan Namdar Zanganeh.
Iran, constrained by international sanctions on its energy and financial industries, “won’t give in over 1 million barrels a day,” the paper reported Zanganeh as saying yesterday at a conference in Tehran. The minister didn’t elaborate, nor did he specify dates for the 60 percent cut in the nation’s exports, according to Shargh.
U.S. and European sanctions on Iran over its nuclear program have curbed foreign investment and hindered development of the Persian Gulf state’s oil and natural gas reserves. Iran produced 2.77 million barrels a day of oil in December, down from an average of 3.58 million in 2011, data compiled by Bloomberg show. Oil exports are its main source of income."
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Get Ready for Corporate Sukuk Boom After Sovereign Rush - Bloomberg
Get Ready for Corporate Sukuk Boom After Sovereign Rush - Bloomberg:
"The busiest year on record for sovereign Islamic bond sales is poised to be eclipsed as a revival in corporate issuance takes hold in 2015.
Companies in the U.K. and Hong Kong may be among those selling sukuk this year as they follow debut issues from their governments, according to National Bank of Abu Dhabi PJSC, the biggest Middle Eastern underwriter of Islamic bonds in 2014. Corporates in the Gulf Cooperation Council will be encouraged to tap the market as bank liquidity and credit conditions deteriorate amid declining oil prices, Moody’s Investors Service said last month.
Islamic bond investors have been starved of options as established corporate issuers, led by those in the six-nation GCC, which accounts for about a third of all global sales, opted for bank loans over public debt. That’s in contrast to sovereign borrowers, which raced to tap an industry whose assets may climb to $2.6 trillion by 2017, according to PricewaterhouseCoopers LLP. Government borrowers sold 215 Shariah bonds last year as the number of company sales dropped to the lowest since 2004."
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"The busiest year on record for sovereign Islamic bond sales is poised to be eclipsed as a revival in corporate issuance takes hold in 2015.
Companies in the U.K. and Hong Kong may be among those selling sukuk this year as they follow debut issues from their governments, according to National Bank of Abu Dhabi PJSC, the biggest Middle Eastern underwriter of Islamic bonds in 2014. Corporates in the Gulf Cooperation Council will be encouraged to tap the market as bank liquidity and credit conditions deteriorate amid declining oil prices, Moody’s Investors Service said last month.
Islamic bond investors have been starved of options as established corporate issuers, led by those in the six-nation GCC, which accounts for about a third of all global sales, opted for bank loans over public debt. That’s in contrast to sovereign borrowers, which raced to tap an industry whose assets may climb to $2.6 trillion by 2017, according to PricewaterhouseCoopers LLP. Government borrowers sold 215 Shariah bonds last year as the number of company sales dropped to the lowest since 2004."
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Will oil price drop weaken Qaboos? - Al-Monitor: the Pulse of the Middle East
Will oil price drop weaken Qaboos? - Al-Monitor: the Pulse of the Middle East:
"Tumbling oil prices are upsetting political equations all over the globe, especially for governments that depend heavily on oil revenue to provide services for their populations. Prominent petrostates like Russia and Venezuela have been hit particularly hard, but certain governments in the oil-rich Middle East are also being forced to tighten their belts.
The slide in oil prices from $115 a barrel to below $60 over the last six months is proving particularly challenging for the Sultanate of Oman. With prices likely to remain low for the near to medium term, Omani officials are scrambling to find alternative sources of revenue outside the oil industry, on which Oman depends for 83% of its income.
The sultanate’s vulnerability to falling oil prices was underscored late last year when Standard & Poor’s cut its outlook for Oman’s sovereign rating from stable to negative."
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"Tumbling oil prices are upsetting political equations all over the globe, especially for governments that depend heavily on oil revenue to provide services for their populations. Prominent petrostates like Russia and Venezuela have been hit particularly hard, but certain governments in the oil-rich Middle East are also being forced to tighten their belts.
The slide in oil prices from $115 a barrel to below $60 over the last six months is proving particularly challenging for the Sultanate of Oman. With prices likely to remain low for the near to medium term, Omani officials are scrambling to find alternative sources of revenue outside the oil industry, on which Oman depends for 83% of its income.
The sultanate’s vulnerability to falling oil prices was underscored late last year when Standard & Poor’s cut its outlook for Oman’s sovereign rating from stable to negative."
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Predictions for 2015: Optimism but volatility expected in UAE property and equities | The National
Predictions for 2015: Optimism but volatility expected in UAE property and equities | The National:
"This year will be a good one, analysts predict, but it is not without its potholes. Housing supply, emerging-market currencies and oil are all things to keep an eye on"
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"This year will be a good one, analysts predict, but it is not without its potholes. Housing supply, emerging-market currencies and oil are all things to keep an eye on"
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Massar to list Dh576m IPO on Abu Dhabi stock exchange | The National
Massar to list Dh576m IPO on Abu Dhabi stock exchange | The National:
"Massar Solutions, a vehicle rental and supply chain solutions company, said today that it plans to list 40 per cent of its shares on Abu Dhabi Securities Exchange.
The firm, formerly known as Al Wathba Company for Central Services, plans to sell 240 million ordinary shares at Dh2.4 each between January 11 and January 25, it said in a statement.
This would value the initial public offer at Dh576 million."
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"Massar Solutions, a vehicle rental and supply chain solutions company, said today that it plans to list 40 per cent of its shares on Abu Dhabi Securities Exchange.
The firm, formerly known as Al Wathba Company for Central Services, plans to sell 240 million ordinary shares at Dh2.4 each between January 11 and January 25, it said in a statement.
This would value the initial public offer at Dh576 million."
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Rosneft Sinks in New York as Oil Output Surges Amid Glut - Bloomberg
Rosneft Sinks in New York as Oil Output Surges Amid Glut - Bloomberg:
"OAO Rosneft posted the longest streak of weekly declines since March 2013 as Russian energy producers sank after the country boosted oil output amid a global supply glut that has pushed prices to five-and-a-half-year low.
The state-run producer tumbled for a sixth week, dropping 3.1 percent to close at $3.49 in New York on Jan. 2. A Bloomberg index of the most-traded Russian stocks in the U.S. retreated 5.6 percent during the period. OAO Surgutneftegas (SGTPY) slid 9.1 percent to $5.21. OAO Lukoil (LUKOY) dropped 5.7 percent to $38.95.
Crude, Russia’s top export and a major source of budget revenue, last year capped its worst annual decline since 2008 as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut. The oil company stocks retreated as Energy Ministry data showed Russian output rose 0.3 percent in December to a post-Soviet record of 10.667 million barrels a day."
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"OAO Rosneft posted the longest streak of weekly declines since March 2013 as Russian energy producers sank after the country boosted oil output amid a global supply glut that has pushed prices to five-and-a-half-year low.
The state-run producer tumbled for a sixth week, dropping 3.1 percent to close at $3.49 in New York on Jan. 2. A Bloomberg index of the most-traded Russian stocks in the U.S. retreated 5.6 percent during the period. OAO Surgutneftegas (SGTPY) slid 9.1 percent to $5.21. OAO Lukoil (LUKOY) dropped 5.7 percent to $38.95.
Crude, Russia’s top export and a major source of budget revenue, last year capped its worst annual decline since 2008 as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut. The oil company stocks retreated as Energy Ministry data showed Russian output rose 0.3 percent in December to a post-Soviet record of 10.667 million barrels a day."
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