Oil prices extend losses after Saudi pledge to restore lost output - Reuters: Oil prices retreated about 2% on Wednesday, extending the previous day’s declines after Saudi Arabia said it would quickly restore full production following last weekend’s attacks on its facilities and as U.S. crude stockpiles rose unexpectedly.
Tension in the Middle East remained elevated, however, after the Saudi Defense Ministry held a news conference, displaying drone and missile debris it said was “undeniable” evidence of Iranian aggression. U.S. President Donald Trump on Wednesday said he ordered a major increase in sanctions on Iran in the latest U.S. move to pressure Tehran.
Iran has denied involvement in the strikes.
The United States wants to build a coalition of European and Arab partners to deter Iran after the attack on Saudi Arabia that Secretary of State Mike Pompeo described on Wednesday as “an act of war.”
Brent crude oil futures LCOc1 ended the session down 95 cents, or 1.5%, at $63.60 a barrel while U.S. West Texas Intermediate (WTI) crude CLc1 futures settled $1.23, or 2.1% lower, at $58.11.
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Wednesday 18 September 2019
Fed Rate Cuts Couldn't Be More Timely for Economies Across Gulf - Bloomberg
Fed Rate Cuts Couldn't Be More Timely for Economies Across Gulf - Bloomberg:
While not everyone agrees that interest-rate cuts are warranted in the U.S., monetary easing by the Federal Reserve is making looser policy possible where it’s long overdue.
Gulf Arab central banks, which largely move in lockstep with the U.S. to protect their currencies’ peg to the dollar, are set to follow the Fed again if, as widely expected, it reduces rates on Wednesday for a second straight meeting. After a wallop of economic uncertainty in the wake of the attack on oil infrastructure in Saudi Arabia, monetary relief could hardly come at a better time.
“It’s a gift from the gods of the Fed,” said Marcus Chenevix, an analyst at investment research firm TS Lombard in London. “They’re suddenly allowed to loosen when the U.S. probably shouldn’t.”
While not everyone agrees that interest-rate cuts are warranted in the U.S., monetary easing by the Federal Reserve is making looser policy possible where it’s long overdue.
Gulf Arab central banks, which largely move in lockstep with the U.S. to protect their currencies’ peg to the dollar, are set to follow the Fed again if, as widely expected, it reduces rates on Wednesday for a second straight meeting. After a wallop of economic uncertainty in the wake of the attack on oil infrastructure in Saudi Arabia, monetary relief could hardly come at a better time.
“It’s a gift from the gods of the Fed,” said Marcus Chenevix, an analyst at investment research firm TS Lombard in London. “They’re suddenly allowed to loosen when the U.S. probably shouldn’t.”
#Saudi Oil Attack Damages Kingdom’s Role as Guardian of Market - Bloomberg
Saudi Oil Attack Damages Kingdom’s Role as Guardian of Market - Bloomberg:
Saudi Arabia is fixing its energy infrastructure and restoring crude production, but the weekend’s attacks may have done irreparable damage to one of the kingdom’s greatest assets -- its role as guardian of global oil markets.
For decades, Riyadh has kept a buffer of spare production capacity that was used as shock-absorber during times of crisis from the Iraqi invasion of Kuwait in 1990 to the Libyan civil war of 2011. Even when dormant, the spare capacity is credited for keeping a lid on prices, amplifying Saudi Arabia’s influence over the global market.
That role was badly damaged by Saturday’s attack on the Abqaiq processing facility. Traders were alarmed by how easily a swarm of drones or missiles knocked out what was supposed to be the oil market’s last line of defense. As long as hostilities persist between Saudi Arabia and Iran -- blamed by U.S. officials for the Abqaiq strike -- there’s a chance it could happen again, according to consultants Petromatrix GmbH.
Saudi Arabia is fixing its energy infrastructure and restoring crude production, but the weekend’s attacks may have done irreparable damage to one of the kingdom’s greatest assets -- its role as guardian of global oil markets.
For decades, Riyadh has kept a buffer of spare production capacity that was used as shock-absorber during times of crisis from the Iraqi invasion of Kuwait in 1990 to the Libyan civil war of 2011. Even when dormant, the spare capacity is credited for keeping a lid on prices, amplifying Saudi Arabia’s influence over the global market.
That role was badly damaged by Saturday’s attack on the Abqaiq processing facility. Traders were alarmed by how easily a swarm of drones or missiles knocked out what was supposed to be the oil market’s last line of defense. As long as hostilities persist between Saudi Arabia and Iran -- blamed by U.S. officials for the Abqaiq strike -- there’s a chance it could happen again, according to consultants Petromatrix GmbH.
#SaudiArabia in talks with Lebanon about financial aid: Saudi finmin - Reuters
Saudi Arabia in talks with Lebanon about financial aid: Saudi finmin - Reuters:
Saudi Arabia is in discussions with the Lebanese government about providing financial support, Saudi Finance Minister Mohammed al-Jadaan said on Wednesday.
“We continue to believe and put our money and commitment in Lebanon, we’ll continue to support Lebanon and we are working with its government,” Jadaan said in an interview with Reuters.
A Lebanese official source said Prime Minister Saad al-Hariri “has been talking to the Kingdom of Saudi Arabia at a high level about support” and would stop in Riyadh on his way to France where he is due to meet President Emmanuel Macron on Friday.
Saudi Arabia is in discussions with the Lebanese government about providing financial support, Saudi Finance Minister Mohammed al-Jadaan said on Wednesday.
“We continue to believe and put our money and commitment in Lebanon, we’ll continue to support Lebanon and we are working with its government,” Jadaan said in an interview with Reuters.
A Lebanese official source said Prime Minister Saad al-Hariri “has been talking to the Kingdom of Saudi Arabia at a high level about support” and would stop in Riyadh on his way to France where he is due to meet President Emmanuel Macron on Friday.
#Saudi market regulator in talks with Aramco on IPO rules - Reuters
Saudi market regulator in talks with Aramco on IPO rules - Reuters:
Saudi Arabia’s Capital Market Authority (CMA) is in talks with Saudi Aramco and its advisers about the regulatory requirements for listing on the domestic stock exchange, its chairman Mohammed bin Abdullah Elkuwaiz told Reuters.
“We continue to have discussions with the company and its advisers on both their readiness, as well as our regulatory requirements for the market,” Kuwaiz said on Wednesday.
Asked whether there will be any waivers or exemptions for the company’s listing, Kuwaiz told Reuters in an interview that the CMA is “still having those discussions”.
Saudi Arabia’s Capital Market Authority (CMA) is in talks with Saudi Aramco and its advisers about the regulatory requirements for listing on the domestic stock exchange, its chairman Mohammed bin Abdullah Elkuwaiz told Reuters.
“We continue to have discussions with the company and its advisers on both their readiness, as well as our regulatory requirements for the market,” Kuwaiz said on Wednesday.
Asked whether there will be any waivers or exemptions for the company’s listing, Kuwaiz told Reuters in an interview that the CMA is “still having those discussions”.
Oil prices extend losses after #Saudi pledge to restore lost output - Reuters
Oil prices extend losses after Saudi pledge to restore lost output - Reuters:
Oil prices retreated about 2% on Wednesday, extending the previous day’s declines after Saudi Arabia said it would quickly restore full production following last weekend’s attacks on its facilities and as U.S. crude stockpiles rose unexpectedly.
Tension in the Middle East remained elevated, however, after the Saudi Defence Ministry held a news conference, displaying drone and missile debris it said was “undeniable” evidence of Iranian aggression. U.S. President Donald Trump on Wednesday said he ordered a major increase in sanctions on Iran in the latest U.S. move to pressure Tehran.
Iran has denied involvement in the strikes.
Oil prices retreated about 2% on Wednesday, extending the previous day’s declines after Saudi Arabia said it would quickly restore full production following last weekend’s attacks on its facilities and as U.S. crude stockpiles rose unexpectedly.
Tension in the Middle East remained elevated, however, after the Saudi Defence Ministry held a news conference, displaying drone and missile debris it said was “undeniable” evidence of Iranian aggression. U.S. President Donald Trump on Wednesday said he ordered a major increase in sanctions on Iran in the latest U.S. move to pressure Tehran.
Iran has denied involvement in the strikes.
Officials work to convince world #Saudi Aramco still a good bet | Financial Times
Officials work to convince world Saudi Aramco still a good bet | Financial Times:
When Saudi Arabia’s officials outlined plans to restore output to maximum capacity after attacks that set two major oil facilities ablaze on Saturday, they were also tasked with convincing the world that the national oil company Saudi Aramco was investable.
Energy minister Prince Abdulaziz bin Salman told reporters Saudi Aramco had “come out like a phoenix from the ashes”, while chief executive Amin Nasser said its swift recovery showed it to be “the most reliable company in the world”.
The message was aimed at potential investors in the long-awaited Saudi Aramco initial public offering, with Riyadh determined to float shares even after the largest attack on the country’s infrastructure.
When Saudi Arabia’s officials outlined plans to restore output to maximum capacity after attacks that set two major oil facilities ablaze on Saturday, they were also tasked with convincing the world that the national oil company Saudi Aramco was investable.
Energy minister Prince Abdulaziz bin Salman told reporters Saudi Aramco had “come out like a phoenix from the ashes”, while chief executive Amin Nasser said its swift recovery showed it to be “the most reliable company in the world”.
The message was aimed at potential investors in the long-awaited Saudi Aramco initial public offering, with Riyadh determined to float shares even after the largest attack on the country’s infrastructure.
MIDEAST STOCKS- #Saudi stocks gain on oil supply restoration hopes - Reuters
MIDEAST STOCKS-Saudi stocks gain on oil supply restoration hopes - Reuters:
Saudi Arabia's stock market rebounded on
Wednesday, on back of financial and petrochemical shares after
the kingdom's energy minister said that full oil production
would be restored by end of September.
Saudi Energy Minister Prince Abdulaziz bin Salman on Tuesday
sought to reassure markets, saying the kingdom would restore its
lost oil production by month-end, having returned supplies to
the levels they were prior to the weekend attacks on Aramco's
plants in Abqaiq and Khurais.
Aramco's chief executive said the state-owned oil giant was
able to supply the local market and would compensate local
refineries with additional feed in the next couple of days.
The Saudi Arabian index was 0.7% higher as Al Rajhi
Bank added 1.8% and Banque Saudi Fransi
advanced 2.6%.
Saudi Arabia's stock market rebounded on
Wednesday, on back of financial and petrochemical shares after
the kingdom's energy minister said that full oil production
would be restored by end of September.
Saudi Energy Minister Prince Abdulaziz bin Salman on Tuesday
sought to reassure markets, saying the kingdom would restore its
lost oil production by month-end, having returned supplies to
the levels they were prior to the weekend attacks on Aramco's
plants in Abqaiq and Khurais.
Aramco's chief executive said the state-owned oil giant was
able to supply the local market and would compensate local
refineries with additional feed in the next couple of days.
The Saudi Arabian index was 0.7% higher as Al Rajhi
Bank added 1.8% and Banque Saudi Fransi
advanced 2.6%.
#Qatar Petroleum and Shell in LNG marine fuel venture - Reuters
Qatar Petroleum and Shell in LNG marine fuel venture - Reuters:
Qatar Petroleum [QATPE.UL] and Shell (RDSa.L) agreed on Wednesday to establish a partnership to accelerate the development of liquified natural gas (LNG) fuelling infrastructure around the world.
“The joint venture between the two companies will invest in LNG marine fuelling, bunkering vessels and other infrastructure in key locations to meet the needs of marine customers and help to reduce emissions of the global shipping industry,” a Shell statement said.
“These locations will leverage existing Qatar Petroleum and Shell supply positions and complement current Shell marine LNG bunkering locations in Europe, Asia and North America.”
Qatar Petroleum [QATPE.UL] and Shell (RDSa.L) agreed on Wednesday to establish a partnership to accelerate the development of liquified natural gas (LNG) fuelling infrastructure around the world.
“The joint venture between the two companies will invest in LNG marine fuelling, bunkering vessels and other infrastructure in key locations to meet the needs of marine customers and help to reduce emissions of the global shipping industry,” a Shell statement said.
“These locations will leverage existing Qatar Petroleum and Shell supply positions and complement current Shell marine LNG bunkering locations in Europe, Asia and North America.”
UPDATE 1- #Qatar Airways annual loss widens to $639 mln amid lingering Gulf dispute - Reuters
UPDATE 1-Qatar Airways annual loss widens to $639 mln amid lingering Gulf dispute - Reuters:
Qatar Airways reported a loss of 2.3 billion Qatari riyals ($639 million) on Wednesday for the year ending March 31, as it grappled with the second year of an embargo by neighbours that has restricted its air routes and driven costs higher.
The results mark a steeper loss from the previous year when the company was $69 million in the red.
Group Chief Executive Akbar Al Baker said in a statement that the losses were attributable to “loss of mature routes, higher fuel costs and foreign exchange fluctuations” but said underlying fundamentals “remain extremely robust”.
Qatar Airways reported a loss of 2.3 billion Qatari riyals ($639 million) on Wednesday for the year ending March 31, as it grappled with the second year of an embargo by neighbours that has restricted its air routes and driven costs higher.
The results mark a steeper loss from the previous year when the company was $69 million in the red.
Group Chief Executive Akbar Al Baker said in a statement that the losses were attributable to “loss of mature routes, higher fuel costs and foreign exchange fluctuations” but said underlying fundamentals “remain extremely robust”.
Column: Hedge funds turned bullish on oil before #Saudi attacks - Reuters
Column: Hedge funds turned bullish on oil before Saudi attacks - Reuters:
Before the attacks on Saudi Arabia’s oil installations on Sept. 14, hedge fund managers had started to become more bullish, or at least less bearish, about the prospects for oil prices amid hope for a trade truce between the United States and China.
Hedge funds and other money managers purchased the equivalent of 122 million barrels of crude and fuels in the six most important futures and options contracts in the week to Sept. 10, the largest one-week increase for more than a year.
The jump came after five months in which fund managers had been mostly sold oil, suggesting the market had reached a turning point even before the attack on Abqaiq.
Before the attacks on Saudi Arabia’s oil installations on Sept. 14, hedge fund managers had started to become more bullish, or at least less bearish, about the prospects for oil prices amid hope for a trade truce between the United States and China.
Hedge funds and other money managers purchased the equivalent of 122 million barrels of crude and fuels in the six most important futures and options contracts in the week to Sept. 10, the largest one-week increase for more than a year.
The jump came after five months in which fund managers had been mostly sold oil, suggesting the market had reached a turning point even before the attack on Abqaiq.
Petrochem shares surge on #Saudi Tadawul on improved feedstock supplies | ZAWYA MENA Edition
Petrochem shares surge on Saudi Tadawul on improved feedstock supplies | ZAWYA MENA Edition:
Major petrochemical companies in Saudi Arabia announced an improvement in feedstock supplies, days after an attack on Aramco facilities, boosting petrochemical shares on Tadawul.
Saturday’s attacks on Aramco facilities in Abqaiq and Khurais cut the company's crude oil supply by around 5.7 million barrels per day or about 50 percent of its output.
On Tuesday, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman announced that the kingdom would restore its lost oil production by the month-end, having recovered supplies to customers to the pre-weekend attack levels.
Major petrochemical companies in Saudi Arabia announced an improvement in feedstock supplies, days after an attack on Aramco facilities, boosting petrochemical shares on Tadawul.
Saturday’s attacks on Aramco facilities in Abqaiq and Khurais cut the company's crude oil supply by around 5.7 million barrels per day or about 50 percent of its output.
On Tuesday, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman announced that the kingdom would restore its lost oil production by the month-end, having recovered supplies to customers to the pre-weekend attack levels.
UPDATE 1- #Saudi finmin sees weaker 2019 GDP growth due to OPEC-led cuts - Reuters
UPDATE 1-Saudi finmin sees weaker 2019 GDP growth due to OPEC-led cuts - Reuters:
Saudi Arabia’s economic growth in 2019 will be significantly less than the kingdom had expected because of OPEC-led oil output cuts, but the attack on Aramco had “zero” impact on revenue, the country’s finance minister said on Wednesday.
“Total GDP is going to be significantly less than what we have forecasted,” Mohammed al-Jadaan told Reuters in an interview in Riyadh, referring to internal estimates.
Jadaan said the oil-driven GDP is influenced by Saudi Arabia’s lower petroleum output in the wake of an OPEC-led supply deal to support oil markets.
Saudi Arabia’s economic growth in 2019 will be significantly less than the kingdom had expected because of OPEC-led oil output cuts, but the attack on Aramco had “zero” impact on revenue, the country’s finance minister said on Wednesday.
“Total GDP is going to be significantly less than what we have forecasted,” Mohammed al-Jadaan told Reuters in an interview in Riyadh, referring to internal estimates.
Jadaan said the oil-driven GDP is influenced by Saudi Arabia’s lower petroleum output in the wake of an OPEC-led supply deal to support oil markets.
MIDEAST STOCKS- #Saudi shares rise as oil supply disruption eases - Agricultural Commodities - Reuters
MIDEAST STOCKS-Saudi shares rise as oil supply disruption eases - Agricultural Commodities - Reuters:
Saudi Arabian stocks rose in early trade on Wednesday as oil supply fears eased after Riyadh said oil production lost as a result of weekend attacks on two Aramco plants would be restored by the end of September.
Yemen’s Iran-aligned Houthi group said it had attacked the plants, at the heart of Saudi Arabia’s oil industry on Saturday, knocking out about 5% of global supply.
Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.
Saudi Arabian stocks rose in early trade on Wednesday as oil supply fears eased after Riyadh said oil production lost as a result of weekend attacks on two Aramco plants would be restored by the end of September.
Yemen’s Iran-aligned Houthi group said it had attacked the plants, at the heart of Saudi Arabia’s oil industry on Saturday, knocking out about 5% of global supply.
Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.
UPDATE 1- #Saudi CMA says new capital market rules will permit other exchanges - Reuters
UPDATE 1-Saudi CMA says new capital market rules will permit other exchanges - Reuters:
The amendment to Saudi Arabia’s capital market law will allow other exchanges to be established alongside the government-owned Tadawul, the head of the Saudi Capital Market Authority (CMA) said on Wednesday.
“CMA plans to license other entities to provide activities of exchanges, depositories or clearing houses,” CMA Chairman Mohammed bin Abdullah Elkuwaiz told a conference.
Licensing new stock market operators would be a potential first step to privatising the bourse — the largest in the Middle East — as Riyadh moves to wean the economy off oil.
The amendment to Saudi Arabia’s capital market law will allow other exchanges to be established alongside the government-owned Tadawul, the head of the Saudi Capital Market Authority (CMA) said on Wednesday.
“CMA plans to license other entities to provide activities of exchanges, depositories or clearing houses,” CMA Chairman Mohammed bin Abdullah Elkuwaiz told a conference.
Licensing new stock market operators would be a potential first step to privatising the bourse — the largest in the Middle East — as Riyadh moves to wean the economy off oil.
Asset management industry in GCC to grow steadily: Moody's | ZAWYA MENA Edition
Asset management industry in GCC to grow steadily: Moody's | ZAWYA MENA Edition:
The asset management industry in GCC states is set for steady growth over the next decade, supported by the region's diversification away from oil and encouragement of foreign investment.
GCC asset management will grow with economic diversification and by new regulations designed to attract foreign investors, Moody's Investors Service said in a report published on Tuesday.
GCC investment managers had $260 billion of Assets Under Management (AUM) as of December last year. The largest market is Saudi Arabia, accounting for slightly less than half of regional AUM, followed by Kuwait, with an estimated $73 billion and Bahrain with $56 billion.
The asset management industry in GCC states is set for steady growth over the next decade, supported by the region's diversification away from oil and encouragement of foreign investment.
GCC asset management will grow with economic diversification and by new regulations designed to attract foreign investors, Moody's Investors Service said in a report published on Tuesday.
GCC investment managers had $260 billion of Assets Under Management (AUM) as of December last year. The largest market is Saudi Arabia, accounting for slightly less than half of regional AUM, followed by Kuwait, with an estimated $73 billion and Bahrain with $56 billion.
RPT-Costly #Saudi defences prove no match for drones, cruise missiles - Reuters
RPT-Costly Saudi defences prove no match for drones, cruise missiles - Reuters:
Billions of dollars spent by Saudi Arabia on cutting edge Western military hardware mainly designed to deter high altitude attacks has proved no match for low-cost drones and cruise missiles used in a strike that crippled its giant oil industry.
Saturday’s assault on Saudi oil facilities that halved production has exposed how ill-prepared the Gulf state is to defend itself despite repeated attacks on vital assets during its four-and-a-half year foray into the war in neighbouring Yemen.
Saudi Arabia and the United States have said they believe Iran, the kingdom’s arch-enemy, was probably behind the strike. On Tuesday, a U.S. official said Washington believed the attack originated in southwestern Iran. Three U.S. officials said it involved both cruise missils and drones.
Billions of dollars spent by Saudi Arabia on cutting edge Western military hardware mainly designed to deter high altitude attacks has proved no match for low-cost drones and cruise missiles used in a strike that crippled its giant oil industry.
Saturday’s assault on Saudi oil facilities that halved production has exposed how ill-prepared the Gulf state is to defend itself despite repeated attacks on vital assets during its four-and-a-half year foray into the war in neighbouring Yemen.
Saudi Arabia and the United States have said they believe Iran, the kingdom’s arch-enemy, was probably behind the strike. On Tuesday, a U.S. official said Washington believed the attack originated in southwestern Iran. Three U.S. officials said it involved both cruise missils and drones.
Oil slips after #SaudiArabia says to restore output but risks remain - Reuters
Oil slips after Saudi Arabia says to restore output but risks remain - Reuters:
Oil prices slipped on Wednesday, extending losses from the previous session after Saudi Arabia’s energy minister said the kingdom will restore lost oil production by the end of the month.
But investors remained cautious about Middle East tension after the United States said it believes the attacks that crippled Saudi Arabian oil facilities last weekend originated in southwestern Iran. Iran has denied involvement in the strikes.
Brent crude oil futures LCOc1 fell 15 cents, or 0.2%, to $64.40 a barrel by 0253 GMT, after tumbling 6.5% the previous session.
U.S. West Texas Intermediate (WTI) crude CLc1 futures declined 35 cents, or 0.6%, to $58.99 a barrel, after sinking by 5.7% on Tuesday.
Oil prices slipped on Wednesday, extending losses from the previous session after Saudi Arabia’s energy minister said the kingdom will restore lost oil production by the end of the month.
But investors remained cautious about Middle East tension after the United States said it believes the attacks that crippled Saudi Arabian oil facilities last weekend originated in southwestern Iran. Iran has denied involvement in the strikes.
Brent crude oil futures LCOc1 fell 15 cents, or 0.2%, to $64.40 a barrel by 0253 GMT, after tumbling 6.5% the previous session.
U.S. West Texas Intermediate (WTI) crude CLc1 futures declined 35 cents, or 0.6%, to $58.99 a barrel, after sinking by 5.7% on Tuesday.