Oil Eases Losses After U.S., China Sign Phase One of Trade Deal - Bloomberg

Oil Eases Losses After U.S., China Sign Phase One of Trade Deal - Bloomberg:

Oil erased some of the losses that followed the U.S. inventory report after the U.S. and China inked the first phase of a broader trade pact on Wednesday.

Futures in New York settled 0.7% lower after falling as much as 1.5% earlier. China agreed to buy $52.4 billion of additional U.S. energy products as part of a landmark trade deal signed by the world’s two top economic superpowers. But a bearish US government report that showed swelling fuel inventories held back further gains from the newly minted deal.

Oil rebounded from a low because of the signing of the initial U.S.-China trade deal, said Bart Melek, head of global commodity strategy at TD Bank in Toronto. “This agreement could pave the way for global demand to improve after nearly two years into the dispute.”

Morgan Stanley Is Biggest Aramco Bear as Banks Begin Ratings - Bloomberg

Morgan Stanley Is Biggest Aramco Bear as Banks Begin Ratings - Bloomberg:

A month after the world’s largest initial public offering, Saudi Aramco’s investment banks aren’t exactly bullish, with most recommending investors avoid the stock as they kicked off research coverage.

Of the 13 banks tracked by Bloomberg that have begun following the stock, two recommend buying, seven have hold ratings and four say sell. The average 12-month price target is 32.64 riyals, a 5.9% drop from current levels, with Morgan Stanley, at 28.10 riyals, the lowest among the banks that arranged the sale.

The offering was hampered by investors’ unwillingness to value the company at $2 trillion, as sought by Saudi Crown Prince Mohammed bin Salman. Investment banks’ estimates ran from $1.1 trillion to $2.5 trillion, but when fund managers balked at the high end, the kingdom scrapped a planned international offering and sold shares only on the domestic market.

The stock price already reflects Aramco’s strengths, such as its low production costs, long reserve life and strong free cash flow, according to Morgan Stanley, which has an underperform rating.

#Oman's new sultan faces 'balancing act' as credit crunch looms - Reuters

Oman's new sultan faces 'balancing act' as credit crunch looms - Reuters:

Holders of more than $20 billion of Oman’s dollar bonds want the new sultan to push through urgent reforms to ward off a credit crunch in the Gulf’s worst performing economy.

The swift appointment of Haitham bin Tariq al-Said after the death on Friday of Sultan Qaboos bin Said reassured investors, as some had feared a protracted succession that could have exposed Oman to external interference.

While world leaders welcomed Haitham’s promise to uphold a balanced foreign policy, analysts said he needed to tackle unemployment and strained public finances in the indebted country.

“It is in the domestic politics and economic policy realm where the ultimate success of Haitham’s leadership will be determined,” said Robert Mogielnicki of the Washington-based Arab Gulf States Institute.

Massive Oil Product Build Sends Prices Lower | OilPrice.com

Massive Oil Product Build Sends Prices Lower | OilPrice.com:

A day after the API’s crude oil inventory report pressured prices, the EIA relieved some of the pressure by reporting an inventory draw of 2.5 million barrels for the week to January 10.

Analysts had expected the authority to report an inventory decline of 750,000 barrels for the period. A week earlier, the EIA estimated inventories had added 1.2 million barrels, after for the last week of 2019 it reported an inventory decline of 11.5 million barrels.

In gasoline the EIA reported an inventory rise of 6.7 million barrels, adding to a build of 9.1 million barrels a week earlier. Production last week averaged 9.3 million bpd, up from 8.9 million bpd for the previous week.

For distillate fuels, the authority reported an inventory increase of 8.2 million barrels for the week to January 10, compared with an increase of 5.3 million barrels for the prior week. Production of distillate fuel amounted to 5.2 million bpd last week, versus 5.3 million bpd a week earlier.

As Aramco hails record IPO, #AbuDhabi's ADNOC whips up $19 billion - Reuters

As Aramco hails record IPO, Abu Dhabi's ADNOC whips up $19 billion - Reuters:

The talk’s all been about Saudi Aramco, and the suspense of its historic drive to whip up international cash. But, more quietly, its Gulf oil peer ADNOC has also been courting foreign funds - and its efforts compare favorably.

Employees are seen at the Panorama Digital Command Centre at the ADNOC headquarters in Abu Dhabi, UAE December 10, 2019. REUTERS/Satish Kumar

Like Saudi Arabia, Abu Dhabi’s economy was hit by a dramatic fall in oil prices in mid-2014, triggering a drive to reduce its dependence on crude. A central part of that has been to reform and modernize state champion ADNOC and attract foreign investment.

Unlike Aramco’s push for a giant stock market listing, which has been highly publicized and closely watched, ADNOC has gone for a more staggered approach with its fundraising efforts, and there has been little overview of their scope by industry experts.

However the Abu Dhabi National Oil Company, to give its full name, has raised more than $19 billion over the past three years from overseas investors, according to Reuters calculations based on publicly released size of investments, signing fees and share sales.

#Iran recession to deepen, reserves to fall to $73 billion by March: IIF - Reuters

Iran recession to deepen, reserves to fall to $73 billion by March: IIF - Reuters:

Hit by sanctions curbing oil sales, Iran’s economy is set to fall deeper into recession this fiscal year and foreign reserves could drop to $73 billion by March, a loss of almost $40 billion in two years, the Institute of International Finance said.

The economy shrank by 4.6% in the 2018-2019 fiscal year and the contraction is expected to deepen to 7.2% in the current fiscal year, the IIF, a finance industry body, said this week.

The United States last week sanctioned 17 Iranian metal producers and mining companies in response to Iran’s attack on U.S. troops in Iraq, which was retaliation for the U.S. killing of an Iranian general in a drone strike in Baghdad.

Iran is not a major metals producer but the sanctions add pressure on the economy, crippled by a decline in volume of exports of crude oil and condensates, which fell from a peak of 2.8 million barrels per day in May 2018 to less than 0.4 million barrels a day in recent months.

#Qatar Airways CEO and past Boeing critic backs planemaker's new head - Reuters

Qatar Airways CEO and past Boeing critic backs planemaker's new head - Reuters:

The chief executive of Qatar Airways and a past critic of Boeing managers welcomed on Wednesday this month’s change at the helm of the U.S. planemaker as it deals with the grounding of its 737 MAX model following two fatal crashes.

Boeing appointed David Calhoun, a former General Electric (GE.N) executive who has been on the Boeing board since 2009, as chief executive and president. He replaced Dennis Muilenburg.

Qatar Airways CEO Akbar al-Baker, who heads one of the Middle East’s largest carriers, is a major Boeing customer but has been critical of Boeing and its rival Airbus (AIR.PA) in the past. He once said Boeing was run by “bean counters and lawyers.”

“I have huge confidence in the new management of Boeing and I have huge confidence in Mr Calhoun leading the company,” Baker said. “I am very glad Mr Muilenburg has gone.”

How property prices fared in #Dubai's most popular areas in 2019 - Arabianbusiness

How property prices fared in Dubai's most popular areas in 2019 - Arabianbusiness:

Dubai Marina retained its title as the most popular area for apartment sales in the city during 2019, while Palm Jumeirah continues to attract the highest number of buyers and investors for villas, according to UAE-based property website Bayut. 


Bayut's overview of property prices in Dubai showed that values have continued to become more competitive throughout 2019, resulting in both the number and value of property transactions increasing.

It said the price per square foot in Dubai Marina remained affordable in 2019, reducing by 11.8 percent from AED1,502 in 2018 to AED1,326 in 2019. This contributed to increased transactions in the area which saw sales worth AED8.07 billion in 2019 compared to AED5.06 billion it generated in 2018.

When it comes to the average sales price per square foot for apartments, the luxury area of Palm Jumeirah saw a decline of 16.6 percent from AED1,671 in 2018 to AED1,394 in 2019, Bayut added.

Ex Drake and Scull CEO arrested, faces possible extradition to the #UAE - Arabianbusiness

Ex Drake and Scull CEO arrested, faces possible extradition to the UAE - Arabianbusiness:

Khaldoun Tabari, the former CEO of Dubai-based contractor Drake and Scull International (DSI), was arrested by Jordanian authorities at the Queen Alia International Airport in Amman as he was catching a flight to the United Kingdom. 


His arrest follows the issuing of an Interpol red notice against him on January 7, according to a senior DSI company representative who asked not to be named. Tabari was facing criminal charges filed by DSI in Jordan at the time of his arrest. He has since been released on bail after providing his passport as a personal guarantee.

DSI began reporting losses in 2015 after the decline in oil prices forced developers and clients to defer payments and delay projects. In 2018, it accused Tabari and former management of taking “deliberate and conscious” decisions to conceal millions in losses for the years 2009-2016. In November 2019, it said previous management hid around $817m in losses.

Last year, a report by the company said a 2016 restructuring plan was developed on “false information of backlog value, misrepresented projects' profitability and percentage of completion”. Tabari was the second biggest shareholder in the company before selling his stake

Oil slips on doubts about U.S.-China deal, OPEC outlook - Reuters

Oil slips on doubts about U.S.-China deal, OPEC outlook - Reuters:

Oil prices slipped on Wednesday on concerns that the U.S./China Phase 1 trade deal may not provide much of a demand boost because the United States intends to keep tariffs on Chinese goods until a second phase deal.

Prices were also under pressure from an OPEC report saying the producer group expected lower demand for its oil in 2020 even as global demand rises, as rival producers grab market share and the United States looks set for another output record.

Brent crude LCOc1 was down 17 cents at $64.32 per barrel by 1436 GMT. U.S. West Texas Intermediate crude futures CLc1 were down 18 cents at $58.05 a barrel. 


U.S. Treasury Secretary Steven Mnuchin said late on Tuesday that tariffs on Chinese goods will remain in place until the completion of a second phase of a U.S.-China trade agreement even though both sides are expected to sign an interim deal later on Wednesday.

#AbuDhabi energy firm Masdar launches green REIT in #UAE - Reuters

Abu Dhabi energy firm Masdar launches green REIT in UAE - Reuters:

Abu Dhabi Future Energy Company (Masdar) said on Wednesday it was launching a sustainable real estate investment trust (REIT) with an initial valuation of between 950 million UAE dirhams ($259 million) and 1 billion dirhams.

The “green” REIT portfolio will initially include four commercial properties at Abu Dhabi’s Masdar city, the company, a subsidiary of Mubadala Investment Company, said in a statement.

It will cover more than 57 thousand square meters of net leasable area.

The first green REIT in the United Arab Emirates (UAE), it will be launched at Abu Dhabi Global Market, the statement said.

MIDEAST STOCKS-Oman leads Gulf higher; #Saudi bucks regional strength - Reuters

MIDEAST STOCKS-Oman leads Gulf higher; Saudi bucks regional strength - Reuters:

Most Gulf bourses ended higher on
Wednesday, with Oman leading the gains, as robust company
earnings and an ease in geopolitical tensions lifted sentiment,
although weakness in financial shares weighed on the Saudi
index.

Regional stocks had declined after the killing of an Iranian
commander by a U.S. drone strike and the launch of Iranian
missiles in retaliation, however, a de-escalation in tensions
has revived buying interest in Gulf equities.

Oman's blue-chip index, which traded after a
three-day break following the death of Sultan Qaboos bin Said,
advanced 1.6%, marking its biggest one-day gain this month.

Bank Muscat closed 2.8% higher, while Raysut
Cement rose 7.6%. Both of them reported a sharp rise
in their annual net profit.

Oil Trades Near Six-Week Low as Data Shows U.S. Stockpiles Rose - Bloomberg

Oil Trades Near Six-Week Low as Data Shows U.S. Stockpiles Rose - Bloomberg:

Oil traded near a six-week low as industry data showing an increase in U.S. crude stockpiles re-affirmed expectations that global markets will be oversupplied in the first part of the year.

Futures slipped as much as 0.7% in New York to near $58 a barrel as traders focused on the approaching seasonal lull in demand once winter ends, and amid signs of plentiful supply around the world. The American Petroleum Institute reported inventories expanded by 1.1 million barrels last week, according to people familiar with the data.

West Texas Intermediate crude for February delivery fell 16 cents, or 0.3%, to $58.07 a barrel on the New York Mercantile Exchange as of 10:14 a.m. in London. The contract closed Monday at the lowest since Dec. 3. Concerns that the U.S. and Iran were headed for conflict over the killing of an Iranian general, which sent prices soaring earlier this month, have largely dissipated.

#Oman’s New Sultan Faces Blessing and Curse - Bloomberg

Oman’s New Sultan Faces Blessing and Curse - Bloomberg:

In the summer of 2018, arguing that death was the surest agent of change in the Middle East, I included Oman’s Sultan Qaboos bin Said in the list of four leaders whose passing would shake up the region. The three others were King Salman bin Abdulaziz of Saudi Arabia, Supreme Leader Ali Khamenei of Iran and Grand Ayatollah Ali Sistani of Iraq.

Noting Oman’s unusual succession mechanism — Qaboos would nominate an heir in a sealed letter, to be opened upon his death, but only if his extended family couldn’t arrive at a consensus among themselves — I predicted that “a process so peculiar can hardly be expected to proceed smoothly.”

I was dead wrong. After Qaboos’s passing last week, the succession proceeded smoothly and swiftly. The family decided not even to try for a consensus: Instead, the envelope was unsealed, and the late sultan’s choice, his cousin Haitham bin Tariq, enthroned.

Whether this decision represents a shirking of responsibility by the family or a voluntary renunciation of privilege, the reasoning behind it is simple. The grandees, aware that Oman faces a perfect storm of economic and geopolitical upheavals, felt they could ill afford a potentially divisive debate

#AbuDhabi plans to sell a $2bn slice of its private equity book - Arabianbusiness

Abu Dhabi plans to sell a $2bn slice of its private equity book - Arabianbusiness:

The Abu Dhabi Investment Authority is preparing to sell around $2 billion of its stakes in private-equity funds, amid an increasing push toward direct investments by the sovereign wealth fund, people familiar with the matter said.

ADIA is working with advisers at PJT Park Hill on the proposed transaction, according to the people, who asked not to be identified because the information is private. It plans to start marketing the deal to potential buyers within weeks, one of the people said. 


Large investors like ADIA often end up with a multitude of investments run by different private-equity managers, making them cumbersome to administer. The Gulf fund is following other major investors by taking direct stakes in firms - eschewing the fees and limitations of managed funds - to generate returns in a low-interest-rate environment.

Final details about the sale, including the portfolio size, could still change, they said.

JPMorgan first major brokerage to rate #Saudi Aramco 'overweight' - Reuters

JPMorgan first major brokerage to rate Saudi Aramco 'overweight' - Reuters:

JPMorgan (JPM.N) is the first major brokerage to initiate coverage of Saudi Aramco 2222.SE with an “overweight”, setting a price target of 37 riyals ($9.86) per share and saying it sees scope for an increase in the energy giant’s proposed $75 billion base dividend.

Goldman Sachs on Tuesday rated the company “neutral” with a price target of 41 riyals while HSBC on Wednesday initiated coverage of Aramco with a “hold” rating and a target of 36.80 riyals.

Bernstein and Jefferies both initiated coverage of Aramco last month with “underperform” ratings saying the company had been priced at a premium to international oil majors in its December IPO despite governance issues.

“Our bullish view is predicated on its dividend growth outlook, with scope to increase the $75 billion baseline as production scales up,” JPMorgan said in a note.

MENA fund managers to raise #Saudi investments, maintain other holdings: Reuters poll - Reuters

MENA fund managers to raise Saudi investments, maintain other holdings: Reuters poll - Reuters:

Middle Eastern fund managers plan to increase investments in Saudi Arabia, while keeping exposure in the rest of the region at current levels, according to a Reuters poll.

Saudi Arabia’s share index .TASI is up almost 1% this year. It gained 7% in 2019 last year but lagged other Gulf markets including Kuwait and Dubai as investors sold off ahead of Saudi Aramco’s record initial public offering (IPO).

Aramco raised as much as $29.4 billion, propelling the Riyadh bourse into the world’s top ten by value of listed companies.

Five of nine managers polled said they would increase their investments in Saudi Arabia, anticipating favorable policy reforms and market opportunities.

Oil drops on concerns that U.S.-China trade deal may not stoke demand - Reuters

Oil drops on concerns that U.S.-China trade deal may not stoke demand - Reuters:

Oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world’s biggest oil users, may not boost demand as the U.S. intends to keep tariffs on Chinese goods until a second phase.

U.S. Treasury Secretary Steven Mnuchin said late on Tuesday that tariffs on Chinese goods will remain in place until the completion of a second phase of a U.S.-China trade agreement, even as both sides are expected to sign an interim deal later on Wednesday.

Brent crude LCOc1 was down 16 cents, or 0.3%, at $64.33 per barrel by 0745 GMT. U.S. West Texas Intermediate crude futures CLc1 were down 15 cents, or 0.3%, at $58.08 a barrel.

“A pickup with global demand for crude may struggle as U.S.-Chinese tensions linger after some hardline stances from the Trump administration,” said Edward Moya, analyst at brokerage OANDA.

Mideast Stocks: Most major Gulf markets slip but Oman bucks trend with sharp rise | ZAWYA MENA Edition

Mideast Stocks: Most major Gulf markets slip but Oman bucks trend with sharp rise | ZAWYA MENA Edition:

Most major Gulf stock indexes fell at Wednesday's open, with Abu Dhabi dragged down by its top lender, but Oman bucked the trend as financial stocks led a sharp rise as the market reopened after a three-day break. 


Oman's blue-chip bourse, which had closed following the death of Sultan Qaboos bin Said, rose 1.5% for its biggest intraday gain this month. Bank Muscat rose 3.7%, while Raysut Cement  was up 7.6% after reporting a large rise in full-year net profit.

Saudi Arabia's benchmark index edged down 0.1%, hurt by a 0.6% fall in Saudi Aramco and a 0.7% drop in Saudi British Bank.

On Wednesday, JP Morgan initiated coverage of state-owned Aramco with an "overweight" rating and price target of 37 riyals ($9.86), a stronger recommendation than Goldman Sachs' "neutral" and Morgan Stanley's "underweight" ratings.