Oil Falls From a Three-Month High Before Key Inventory Report - Bloomberg

Oil Falls From a Three-Month High Before Key Inventory Report - Bloomberg:

Oil slipped from a three-month high before a U.S. government report expected to show another increase in inventories, signaling the market still has its work cut out to clear a massive supply glut.

Crude futures earlier rallied after President Donald Trump insisted the U.S.-China trade deal was “fully intact,” contradicting remarks from a trade adviser that sent markets into a tailspin. While the market has been buoyed in recent days by signs that demand is coming back, renewed fears of a second wave of the coronavirus is spurring some caution.

“Crude has had a draw only three weeks since mid-January, so I wouldn’t be surprised to see another build from this week’s report,” said Michael Hiley, head of over-the-counter energy trading at New York-based LPS Futures.

PRICES
West Texas Intermediate for August fell 36 cents to $40.37 a barrel in New York Brent for August settlement slid 45 cents to $42.63 on the ICE Futures Europe exchange

Column: Oil prices transitioning to next phase of cycle - Kemp - Reuters

Column: Oil prices transitioning to next phase of cycle - Kemp - Reuters:

Brent futures prices have risen by more than 80% over the last two months, the fastest increase at any point for more than a quarter of a century, as the market has rebounded from its worst crisis in decades.

Front-month Brent futures have averaged nearly $42 per barrel over the last five trading sessions, compared with less than $23 over the same period in late April, based on daily closing prices from ICE Futures Europe.

Global oil consumption has started to recover as economies emerge from lockdown while production has plunged as a result of policy-driven cutbacks by OPEC+ and price-driven cuts by U.S. shale producers.

The global market has likely moved from a large production surplus in late April into a small production deficit by late June, which will draw down excess inventories and push spot prices to a premium.

Global natural gas production to fall by 2.6% this year: Rystad Energy - Reuters

Global natural gas production to fall by 2.6% this year: Rystad Energy - Reuters:

Global natural gas output is set to fall by 2.6% this year because of the impact of the COVID-19 pandemic, after previously being expected to grow, consultancy Rystad Energy said on Tuesday.

Rystad Energy had expected total natural gas production to rise to 4,233 billion cubic meters (bcm) in 2020 from 4,069 bcm last year.

Now it expects production to be 3,962 bcm for this year, rising to 4,015 bcm in 2021 and to 4,094 bcm in 2022.

The most affected output in percentage terms is associated gas from oilfields - a form of natural gas found in deposits of petroleum - which was initially forecast to stay largely flat year-on-year from a 2019 level of 547 bcm.

Covid-19 Recovery: #Oman Offers Interest Free Loans to Businesses - Bloomberg

Covid-19 Recovery: Oman Offers Interest Free Loans to Businesses - Bloomberg:

Oman will offer interest-free loans to help small and medium-sized firms and other business owners that have suffered losses due to the coronavirus pandemic.

The emergency program announced on Tuesday is among the first measures taken by a committee set up by Haitham bin Tariq Al Said to counter the economic fallout of Covid-19, according to Oman Television.

The Gulf nation has already trimmed its budget spending and announced liquidity support in an effort to provide some relief. Oman has also discussed the possibility of financial aid from wealthier neighbors, people with knowledge of the matter told Bloomberg.

Mideast Stocks: #Saudi quiet amid haj curbs on foreigners; #Dubai extends gains | ZAWYA MENA Edition

Mideast Stocks: Saudi quiet amid haj curbs on foreigners; Dubai extends gains | ZAWYA MENA Edition:

Saudi Arabian shares closed up on Tuesday, reversing earlier losses following the kingdom's decision to bar arrivals from abroad to attend the annual haj pilgrimage due to the coronavirus, while property shares boosted Dubai's index.

Saudi Arabia's benchmark index ended up 0.1%, helped by a 2.2% gain in Dr Sulaiman Al-Habib Medical Services.

The kingdom is to limit the number of domestic pilgrims to around 1,000 to prevent the spread of the coronavirus, after barring Muslims abroad from the rite for the first year in modern times. 

Official data showed that Saudi Arabia earns around $12 billion a year from haj and the year-round pilgrimage umrah.

The week-long haj is due to start by the end of July.

Dubai's main share index advanced 1.4%, extending gains from the previous session after the emirate announced on Sunday that it would allow tourists to enter from July 7 in a further easing of its coronavirus-related lockdown.

Virus inflates allure of #AbuDhabi gas pipelines

Abu Dhabi’s garage sale is continuing apace. The emirate on Tuesday sold a 49% stake in state oil giant ADNOC’s gas pipeline business to a host of blue-chip international investors. It’s the latest transaction in a scheme that had already seen it raise $19 billion from similar sales since 2016. Covid-19 appears to have helped inflate the latest $10 billion haul.

The deal puts an enterprise value of $20.7 billion on 982 kilometres of ADNOC pipeline. That’s significantly more than the $15 billion price tag mooted back in January. It’s all the more surprising given the virus-induced collapse in oil prices. Royal Dutch Shell’s share price, for example, has dropped over 40% this year.

One factor is that the assets look appealingly safe. ADNOC will pay a fee to use the pipelines, minus a tariff that will depend on the volume of gas pumped through them. These cash flows should be relatively steady, because the tariff is subject to a floor and a cap, and because Abu Dhabi citizens need the gas for their power needs.

Investors including Singaporean sovereign fund GIC, Brookfield Asset Management and Global Infrastructure Partners face the risk that Abu Dhabi’s antagonist Qatar cuts off gas supplies to the emirate. But that has not yet happened despite Abu Dhabi and its neighbours blockading Doha since 2017.

European, Middle Eastern & African Stocks - Bloomberg #UAE #SaudiArabia #Qatar close

European, Middle Eastern & African Stocks - Bloomberg:

Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.

#Dubai, #AbuDhabi stock markets should consider merger, says FNC member | Markets – Gulf News

Dubai, Abu Dhabi stock markets should consider merger, says FNC member | Markets – Gulf News:

The Abu Dhabi and Dubai stock markets should consider a merger to better the UAE’s competitiveness regionally and globally, according to a member participating in the Federal National Council deliberations.

The statement will revive speculation that the two exchanges are headed towards an eventual merger. There had been such talk for years now, before subsiding over the last two years. Now, it's picking up steam again.

The merger talk was raised by Obaid Khalfan Al Salami, a member of the House, and related to a discussion on precautionary measures taken by the UAE Securities and Commodities Authority to stem the sharp decline in market value amid the COVID-19 pandemic.

#AbuDhabi Sells $10 Billion Stake in Pipelines to Consortium - Bloomberg

Abu Dhabi Sells $10 Billion Stake in Pipelines to Consortium - Bloomberg:





Abu Dhabi sold a $10.1 billion stake in its natural-gas pipelines to a group of six investors including Global Infrastructure Partners, Brookfield Asset Management Inc. and Singapore’s sovereign wealth fund, in the biggest infrastructure acquisition so far this year.

The buyers will have a 49% holding in a new subsidiary for the pipelines set up by Abu Dhabi National Oil Co., which will retain the rest of the shares, the state-owned energy producer said in a statement Tuesday.

Infrastructure has been one of the few bright spots for dealmakers since the coronavirus outbreak led to a sharp downturn in mergers and acquisitions. The volume of such deals increased in the first quarter by almost 20% year-on-year to $81 billion, according to data provider Preqin.

Oil Recovers Losses After Trump Says China Trade Deal Still On - Bloomberg

Oil Recovers Losses After Trump Says China Trade Deal Still On - Bloomberg:

Oil resumed gains, clinging to a three-month high as signs of improving demand buoyed a market momentarily roiled by confusion over U.S.-China trade.

Futures in New York rose 0.4% after President Donald Trump said the deal with Beijing was “fully intact” following remarks from a trade adviser that were interpreted as an end to the agreement. After earlier dropping 2.4%, crude is now back above $40 a barrel, bolstered in recent days by a lifting of lockdown restrictions in some U.S. states, while physical crude prices have also climbed.

Oil has rebounded since plunging below zero in April and is now trading at levels last seen before Russia and Saudi Arabia engaged in a damaging, though short-lived, price war. The kingdom’s Energy Minister Prince Abdulaziz bin Salman said last week that OPEC+ is on course to rebalance the market, and some of the world’s largest traders are seeing a rapid recovery in demand.

Mideast Covid-19 Impact: #Saudi Binladin Skips Salary Payment - Bloomberg

Mideast Covid-19 Impact: Saudi Binladin Skips Salary Payment - Bloomberg:

Saudi Binladin Group failed to pay thousands of employees as the construction giant reels under the impact of coronavirus and restructures about $15 billion of debt.

The conglomerate missed some salary payments in April and May, according to people with knowledge of the matter. It’s not clear yet whether the company, which employs about 100,000 staff, will be able to pay those employees in June, the people said, asking not to be identified due to the sensitivity of the matter.

Existing problems at the construction firm -- for decades Saudi Arabia’s go-to developer for mega-projects such as airports and holy sites in Mecca and Medina -- have been compounded by the impact of the coronavirus, which has halted developments and forced the company to burn through cash without any new project mandates, the people said.

#Oman switches to fiscal surplus after spending cuts - Reuters

Oman switches to fiscal surplus after spending cuts - Reuters:

Oman switched to a fiscal surplus in the first four months of the year after it cut public spending amid low oil prices and the coronavirus crisis, official figures showed.

While other Gulf states resorted to debt to fill state coffers, Oman - which has over $20 billion in outstanding bonds rated junk by major rating agencies - has avoided international markets after a spike in borrowing costs in recent months.

But severe cuts in public expenditure have led to a surplus of 134.2 million rials ($349.48 million) in January-April from a deficit of 133.2 million rials a year earlier, the figures released by the national statistics agency showed.

“Fiscal consolidation through expenditure rationalisation and sharper non-oil revenue generation is showing up in the statistics,” said Ehsan Khoman, head of MENA research and strategy at MUFG.

#Dubai's Emirates NBD begins new round of job cuts -sources - Reuters

Dubai's Emirates NBD begins new round of job cuts -sources - Reuters:

Emirates NBD, Dubai’s largest bank, began cutting hundreds of jobs this week after the impact of the coronavirus crisis accelerated planned lay-offs, three sources said.

Although the full scale of the redundancies was not immediately clear, one source estimated Emirates NBD is cutting some 10% of its staff, equivalent to around 800 people.

The majority were made in the United Arab Emirates (UAE), the Arab world’s second-biggest economy, they told Reuters.

Emirates NBD said in a statement sent to Reuters that recent developments have had a significant impact on the economy, the financial services sector and the bank.

#UAE's ADNOC signs multi-billion-dollar pipeline infrastructure deal | ZAWYA MENA Edition

UAE's ADNOC signs multi-billion-dollar pipeline infrastructure deal | ZAWYA MENA Edition:

Abu Dhabi National Oil Company (ADNOC) said on Tuesday it has signed a deal with a consortium of infrastructure investors who will invest in select ADNOC gas pipeline assets valued at $20.7 billion. 


The agreement with Global Infrastructure Partners (GIP), Brookfield Asset Management, Singapore's sovereign wealth fund GIC, Ontario Teachers' Pension Plan Board, NH Investment & Securities and Italy's Snam will yield $10.1 billion in foreign direct investment, ADNOC said in a statement.

The investors will acquire a 49% stake in ADNOC Gas Pipeline Assets, a newly formed subsidiary of ADNOC with lease rights to 38 pipelines covering a total of 982.3 kilometers, with ADNOC holding the remaining 51% majority stake, the company said.

#UAE financial analysts predict wave of business failures, 'hockey stick' recovery | ZAWYA MENA Edition

UAE financial analysts predict wave of business failures, 'hockey stick' recovery | ZAWYA MENA Edition:

The coronavirus pandemic has already been hard on everyone but the worse isn’t over yet, with financial analysts in the UAE predicting a wave of business failures and a period of flat spell prior to economic recovery.

In a member survey by CFA Institute, the global association of investment professionals, 40 percent of the respondents in the country said they expect “large-scale bankruptcies” as a result of the outbreak, although many of them (47 percent) are forecasting a medium-term “hockey stick” shaped economic recovery, which implies some level of stagnation for the next two to three years.

The majority of investment professionals in the emirates (94 percent) are also wary that the crisis could increase the chances of specific asset mispricing due to liquidity dislocation and the government intervention potentially influencing natural market pricing. Half of them also expressed concern that the pandemic could result in unethical actions in the investment management industry.

CFA’s survey is part of a new report and it seeks to analyze the impact of the pandemic on the global economy, the capital markets and the investment management industry. More than 13,000 members in various countries, including the UAE, have responded to the survey.

Breakingviews - Sovereign funds are having their rainy-day moment - Reuters

Breakingviews - Sovereign funds are having their rainy-day moment - Reuters:

Sovereign wealth funds are having their moment. These state-owned outfits come in a dizzying array of shapes and sizes. But they are all mostly considered as “rainy-day” funds for future generations. As the Covid-19 pandemic pushes economies around the world to their limits, these vehicles will play a big role in managing the fallout.

The clearest example so far is in Singapore. Temasek stepped up this month to back a $1.5 billion recapitalisation of Sembcorp Marine, a shipbuilding and repair group. Earlier this year, the fund underwrote most of a $13 billion funding package for Singapore Airlines. These deals, assisting two industries that support as much as one-fifth of the city-state’s GDP, might be viewed as investments as much as bailouts thanks to a long-term return horizon.

A stronger economy will indirectly shore up Temasek’s other local investments: Singapore makes up 26% of the group’s total portfolio, valued at $224 billion. It’s notable that Temasek prefers to be known as an “investment holding company” which makes decisions at an arm’s length from the government and has a higher risk appetite than its more traditional peer and compatriot GIC. It is still a sovereign fund of sorts, though.

European, Middle Eastern & African Stocks - Bloomberg #UAE #SaudiArabia #Qatar mid-session

European, Middle Eastern & African Stocks - Bloomberg:

Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.

Oil prices steady after Navarro walks back from market-jolting comments - Reuters

Oil prices steady after Navarro walks back from market-jolting comments - Reuters:

Oil prices steadied on Tuesday after a volatile session sparked by confusion over the status of the U.S.-China trade deal.

Markets were spooked by surprise comments from White House trade adviser Peter Navarro saying the hard-won deal was “over”, though assurances from President Donald Trump later that the agreement was fully intact soothed jangled nerves.

Brent crude fell 10 cents, or 0.2%, to $42.98 a barrel by 0649 GMT, after earlier skidding to a session low of $42.21. U.S. oil was down 16 cents, or 0.4%, at $40.57 a barrel, having dropped to a low of $39.76.

U.S.-China relations have reached their lowest point in years since the coronavirus pandemic that began in China hit the United States hard. President Trump and his administration have repeatedly accused Beijing of not being transparent about the outbreak.