Oil edges higher after U.S. crude, fuel stockpiles draw down | Reuters:
Oil prices edged higher on Wednesday, supported by U.S. government data that showed crude and fuel inventories dropped last week, though concerns about the ongoing coronavirus pandemic capped gains.
Brent crude LCOc1 rose 5 cents to settle at $41.77 a barrel. U.S. West Texas Intermediate crude CLc1 gained 13 cents to settle at $39.93 a barrel.
U.S. crude, gasoline and distillate inventories all fell last week, Energy Information Administration data showed. Crude inventories USOILC=ECI fell by 1.6 million barrels, less than forecast; gasoline stocks USOILG=ECI dropped more than expected, sliding by 4 million barrels; while distillate stockpiles USOILD=ECI posted a surprise drawdown of 3.4 million barrels.
“The big surprise was the distillates were well below average,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Wednesday 23 September 2020
Saudi Arabia Is ‘Assessing All Options’ to Stimulate Economy - Bloomberg
Saudi Arabia Is ‘Assessing All Options’ to Stimulate Economy - Bloomberg:
Saudi Arabia is “assessing all the options” to boost its economy after taking painful measures to offset a sharp decline in oil revenue and deep economic contraction caused by restrictions to halt the spread of the coronavirus, the kingdom’s commerce minister said.
“The impact of oil prices has affected Saudi Arabia’s revenue and like any other country we have to adjust,” Commerce Minister Majid Al-Qasabi told Bloomberg TV in an interview that will be aired on Thursday. “The government is in continuous review of what is best for the people and the nation and its interests.”
An almost 40% drop in Brent crude prices over the past year, combined with production cuts to drain a supply glut, helped push Saudi Arabia’s oil revenue down by 45% in the second quarter from a year earlier. In response, the government embarked on a range of austerity measures, cutting investment spending while also increasing taxes and slashing payouts to poorer families.
But the impact on citizens income has irked many. A recent broadcast of an interview with Finance Minister Mohammed Al-Jadaan was bombarded with questions about the possibility of lowering VAT, which was introduced for the first time in 2018 and tripled to 15% this year, even though it was pre-recorded.
Saudi Arabia is “assessing all the options” to boost its economy after taking painful measures to offset a sharp decline in oil revenue and deep economic contraction caused by restrictions to halt the spread of the coronavirus, the kingdom’s commerce minister said.
“The impact of oil prices has affected Saudi Arabia’s revenue and like any other country we have to adjust,” Commerce Minister Majid Al-Qasabi told Bloomberg TV in an interview that will be aired on Thursday. “The government is in continuous review of what is best for the people and the nation and its interests.”
An almost 40% drop in Brent crude prices over the past year, combined with production cuts to drain a supply glut, helped push Saudi Arabia’s oil revenue down by 45% in the second quarter from a year earlier. In response, the government embarked on a range of austerity measures, cutting investment spending while also increasing taxes and slashing payouts to poorer families.
But the impact on citizens income has irked many. A recent broadcast of an interview with Finance Minister Mohammed Al-Jadaan was bombarded with questions about the possibility of lowering VAT, which was introduced for the first time in 2018 and tripled to 15% this year, even though it was pre-recorded.
#UAE, #Israel discuss energy, infrastructure cooperation | Reuters
UAE, Israel discuss energy, infrastructure cooperation | Reuters:
The energy ministers of the United Arab Emirates and Israel discussed possible cooperation and investment opportunities, including natural gas exports to Europe, in a video call on Wednesday, an Israeli statement said.
Israel and the UAE signed an agreement on Sept. 15 to establish diplomatic relations, an accord that Energy Minister Yuval Steinitz said in the statement presented a “historic opportunity” for energy development in the region.
“I spoke (with the UAE energy minister) on cooperating in linking power grids and developing the natural gas market for exports via pipeline to Europe ... as well as other projects,” the statement quoted Steinitz as saying.
The statement, released by Steinitz’s office, said he proposed the UAE join an Egypt-based energy forum that seeks to promote natural gas exports from the east Mediterranean.
The energy ministers of the United Arab Emirates and Israel discussed possible cooperation and investment opportunities, including natural gas exports to Europe, in a video call on Wednesday, an Israeli statement said.
Israel and the UAE signed an agreement on Sept. 15 to establish diplomatic relations, an accord that Energy Minister Yuval Steinitz said in the statement presented a “historic opportunity” for energy development in the region.
“I spoke (with the UAE energy minister) on cooperating in linking power grids and developing the natural gas market for exports via pipeline to Europe ... as well as other projects,” the statement quoted Steinitz as saying.
The statement, released by Steinitz’s office, said he proposed the UAE join an Egypt-based energy forum that seeks to promote natural gas exports from the east Mediterranean.
#UAE News: Central Bank Forecasts Deeper Economic Contraction This Year - Bloomberg
UAE News: Central Bank Forecasts Deeper Economic Contraction This Year - Bloomberg:
The economy of the United Arab Emirates will suffer a deeper contraction this year than first estimated, dragged down by disruptions caused by the coronavirus pandemic, according to the country’s central bank.
Gross domestic product will shrink 5.2% in 2020, compared with a previous forecast for a decline of 3.6%, the central bank said in its quarterly review on Wednesday. GDP in the Arab world’s second-largest economy dropped an estimated 7.8% last quarter after a 0.8% contraction in the prior three months, it said.
“As a regional trade, tourism and transportation hub, the UAE economy was hit by the general ban on travel, while manufacturing production shrunk due to supply chain disruptions, limited export opportunities and subdued domestic demand,” the central bank said.
The outlook is slightly worse than forecasts compiled by Blomberg, which see a decline of 5.1% this year. The UAE economy last contracted by over 5% in 2009, according to the International Monetary Fund.
The economy of the United Arab Emirates will suffer a deeper contraction this year than first estimated, dragged down by disruptions caused by the coronavirus pandemic, according to the country’s central bank.
Gross domestic product will shrink 5.2% in 2020, compared with a previous forecast for a decline of 3.6%, the central bank said in its quarterly review on Wednesday. GDP in the Arab world’s second-largest economy dropped an estimated 7.8% last quarter after a 0.8% contraction in the prior three months, it said.
“As a regional trade, tourism and transportation hub, the UAE economy was hit by the general ban on travel, while manufacturing production shrunk due to supply chain disruptions, limited export opportunities and subdued domestic demand,” the central bank said.
The outlook is slightly worse than forecasts compiled by Blomberg, which see a decline of 5.1% this year. The UAE economy last contracted by over 5% in 2009, according to the International Monetary Fund.
European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #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.
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.
#SaudiArabia and La-La Land | Financial Times
Saudi Arabia and La-La Land | Financial Times:
Saudi Arabia’s energy minister does not want bearish oil speculators “living in a La-La Land,” as he put it last week. Prince Abdulaziz bin Salman reminded them of his ability to make the market “jumpy” and to hurt gamblers “like hell”. While the former is in his power, the latter could be harder.
So far the kingdom deserves a nomination for best oil trader of 2020. Not because of its pledge to rebalance oversupplied markets, but rather because it recognised the need to adjust and add some dynamism to the supply strategies of Opec, the oil exporters’ cartel.
The shift was subtle but brilliant: adopt a work-from-home mentality, make Opec meetings virtual and more frequent and keep the oil market guessing. The strategy increases volatility as needed to unnerve competitors seeking to plan far in advance.
This maximises Saudi Arabia’s optionality and the competitive advantage as the world’s low-cost producer. The more volatile — or “jumpy” — the market, the higher the value of such optionality. We all learned it in the introductory course on oil trading.
Saudi Arabia’s energy minister does not want bearish oil speculators “living in a La-La Land,” as he put it last week. Prince Abdulaziz bin Salman reminded them of his ability to make the market “jumpy” and to hurt gamblers “like hell”. While the former is in his power, the latter could be harder.
So far the kingdom deserves a nomination for best oil trader of 2020. Not because of its pledge to rebalance oversupplied markets, but rather because it recognised the need to adjust and add some dynamism to the supply strategies of Opec, the oil exporters’ cartel.
The shift was subtle but brilliant: adopt a work-from-home mentality, make Opec meetings virtual and more frequent and keep the oil market guessing. The strategy increases volatility as needed to unnerve competitors seeking to plan far in advance.
This maximises Saudi Arabia’s optionality and the competitive advantage as the world’s low-cost producer. The more volatile — or “jumpy” — the market, the higher the value of such optionality. We all learned it in the introductory course on oil trading.
PR or Pivot? Investors Snap Up Green-Bond Offerings From Gulf - Bloomberg
PR or Pivot? Investors Snap Up Green-Bond Offerings From Gulf - Bloomberg:
In a region known for oil wells, tankers and sprawling natural-gas plants, green bonds might raise some eyebrows.
But when Saudi Electricity Co. and Qatar National Bank sold notes this month designed to fund projects including environmentally friendly buildings, smart meters and infrastructure for distributing renewable power, investors piled in.
“If you have an ESG mandate and are looking for a yield pickup in a name with a phenomenally strong balance sheet, then you would be willing to buy,” said Patrick Esteruelas, head of research at Emso Asset Management in New York. “The combination of public-relations benefits and the opportunity to tap a growing pool of capital means there will be a significant increase in green-bond issuance.”
In the Gulf, the decline in oil prices that was fueled by the coronavirus pandemic served as a reminder of why nations need to diversify their economies away from energy exports. While not everyone is convinced that the environmental, social and governance, or ESG, bonds go much beyond good PR, the global rush for placements means more issuance from the region is a given.
In a region known for oil wells, tankers and sprawling natural-gas plants, green bonds might raise some eyebrows.
But when Saudi Electricity Co. and Qatar National Bank sold notes this month designed to fund projects including environmentally friendly buildings, smart meters and infrastructure for distributing renewable power, investors piled in.
“If you have an ESG mandate and are looking for a yield pickup in a name with a phenomenally strong balance sheet, then you would be willing to buy,” said Patrick Esteruelas, head of research at Emso Asset Management in New York. “The combination of public-relations benefits and the opportunity to tap a growing pool of capital means there will be a significant increase in green-bond issuance.”
In the Gulf, the decline in oil prices that was fueled by the coronavirus pandemic served as a reminder of why nations need to diversify their economies away from energy exports. While not everyone is convinced that the environmental, social and governance, or ESG, bonds go much beyond good PR, the global rush for placements means more issuance from the region is a given.
#Qatar fund emboldens calls for governance change at Lagardere | Reuters
Qatar fund emboldens calls for governance change at Lagardere | Reuters:
Qatar's sovereign wealth fund stepped into the market battle over struggling Lagardere LAGA.PA on Wednesday by calling for fair representation for all large shareholders in the French media and publishing group.
Qatar’s rare public incursion adds up pressure on the company’s chief executive Arnaud Lagardere and increases the chances of a shake-up within the group, which has become the arena for a proxy war involving two French billionaires, Bernard Arnault and Vincent Bolloré.
Qatar Holding, a subsidiary of the Qatar Investment Authority and Lagardere’s third-biggest investor with 13%, said in a statement late on Tuesday that it considered it “legitimate that all significant shareholders be fairly represented.”
This comes after calls by Lagardere's two biggest shareholders, media group Vivendi VIV.PA, controlled by Bollore, and activist fund Amber, to hold a general meeting to replace four of the nine members of Lagardere's supervisory board.
Qatar's sovereign wealth fund stepped into the market battle over struggling Lagardere LAGA.PA on Wednesday by calling for fair representation for all large shareholders in the French media and publishing group.
Qatar’s rare public incursion adds up pressure on the company’s chief executive Arnaud Lagardere and increases the chances of a shake-up within the group, which has become the arena for a proxy war involving two French billionaires, Bernard Arnault and Vincent Bolloré.
Qatar Holding, a subsidiary of the Qatar Investment Authority and Lagardere’s third-biggest investor with 13%, said in a statement late on Tuesday that it considered it “legitimate that all significant shareholders be fairly represented.”
This comes after calls by Lagardere's two biggest shareholders, media group Vivendi VIV.PA, controlled by Bollore, and activist fund Amber, to hold a general meeting to replace four of the nine members of Lagardere's supervisory board.
Most Gulf markets rise in early trade | Reuters
Most Gulf markets rise in early trade | Reuters:
Most stock markets in the Gulf rose in early trade on Wednesday, with financial shares boosting the Dubai Index.
Dubai's main share index .DFMGI rose 1%, on track to end three sessions of losses, with the country's largest sharia-compliant lender Dubai Islamic Bank DISB.DU gaining 2.6%, while Emirates NBD Bank ENBD.DU was up 1%.
The Abu Dhabi index .ADI added 0.5%, helped by a 0.7% rise in Emirates Telecommunications ETISALAT.AD and a 0.4% increase in First Abu Dhabi Bank (FAB) FAB.AD.
FAB, the United Arab Emirates’ largest lender, has hired banks to arrange an investor call ahead of an issuance of U.S. dollar-denominated bonds, a document showed.
The planned Additional Tier 1 perpetual bonds are not callable for six years, the document showed.
In Qatar, the index .QSI firmed 0.3%, helped by a 2.7% jump in United Development Company UDCD.QA.
** Saudi Arabia was closed for a public holiday.
Most stock markets in the Gulf rose in early trade on Wednesday, with financial shares boosting the Dubai Index.
Dubai's main share index .DFMGI rose 1%, on track to end three sessions of losses, with the country's largest sharia-compliant lender Dubai Islamic Bank DISB.DU gaining 2.6%, while Emirates NBD Bank ENBD.DU was up 1%.
The Abu Dhabi index .ADI added 0.5%, helped by a 0.7% rise in Emirates Telecommunications ETISALAT.AD and a 0.4% increase in First Abu Dhabi Bank (FAB) FAB.AD.
FAB, the United Arab Emirates’ largest lender, has hired banks to arrange an investor call ahead of an issuance of U.S. dollar-denominated bonds, a document showed.
The planned Additional Tier 1 perpetual bonds are not callable for six years, the document showed.
In Qatar, the index .QSI firmed 0.3%, helped by a 2.7% jump in United Development Company UDCD.QA.
** Saudi Arabia was closed for a public holiday.
Factbox: Reliance raises $22.43 billion from stake sales at retail, digital arms | Reuters
Factbox: Reliance raises $22.43 billion from stake sales at retail, digital arms | Reuters:
Reliance Industries Ltd, controlled by Asia’s richest man Mukesh Ambani, has raised 1.65 trillion rupees ($22.43 billion) over the past few months through stake sales at its digital unit Jio Platforms and its retail arm Reliance Retail Ventures.
On Wednesday the company announced a $755.1 million investment from KKR & Co Inc in its retail arm, giving it a pre-money valuation of 4.21 trillion rupees ($57.28 billion)
Earlier in September, Reliance raised $1.02 billion from Silver Lake Partners for its retail arm
The latest investments at Reliance Retail come after the conglomerate raised 1.52 trillion rupees ($20.66 billion) at its digital unit by selling stakes to 13 global investors
Reliance Industries Ltd, controlled by Asia’s richest man Mukesh Ambani, has raised 1.65 trillion rupees ($22.43 billion) over the past few months through stake sales at its digital unit Jio Platforms and its retail arm Reliance Retail Ventures.
On Wednesday the company announced a $755.1 million investment from KKR & Co Inc in its retail arm, giving it a pre-money valuation of 4.21 trillion rupees ($57.28 billion)
Earlier in September, Reliance raised $1.02 billion from Silver Lake Partners for its retail arm
The latest investments at Reliance Retail come after the conglomerate raised 1.52 trillion rupees ($20.66 billion) at its digital unit by selling stakes to 13 global investors
Return of Libya’s Oil Is a New Headache for Markets - Bloomberg
Return of Libya’s Oil Is a New Headache for Markets - Bloomberg:
A new wave of coronavirus lockdowns is already slowing oil’s price recovery. Now, commodity traders have a new headache: Libya.
The civil-war-torn country’s oil industry has been all but shut down since January. But it looks as if exports will restart imminently thanks to a truce and an agreement between the main factions over the past week to share petrodollars more evenly. A return of Libyan barrels would come amid volatility in crude as virus cases accelerate.
It’s still early days in Libya -- and previous agreements to reopen the oil sector have failed. But the state energy firm is predicting supply will roughly triple this week to 260,000 bpd. Goldman Sachs reckons exports could reach double that by year-end, while Bloomberg Intelligence thinks a figure of close to 1 million is possible.
That might not seem like much in the context of the global market. But OPEC+’s massive supply cuts since April mean any additional output can put downward pressure on prices. If things go smoothly in Libya, an extra million bpd of oil could be online. That can only be bad for oil bulls.
A new wave of coronavirus lockdowns is already slowing oil’s price recovery. Now, commodity traders have a new headache: Libya.
The civil-war-torn country’s oil industry has been all but shut down since January. But it looks as if exports will restart imminently thanks to a truce and an agreement between the main factions over the past week to share petrodollars more evenly. A return of Libyan barrels would come amid volatility in crude as virus cases accelerate.
It’s still early days in Libya -- and previous agreements to reopen the oil sector have failed. But the state energy firm is predicting supply will roughly triple this week to 260,000 bpd. Goldman Sachs reckons exports could reach double that by year-end, while Bloomberg Intelligence thinks a figure of close to 1 million is possible.
That might not seem like much in the context of the global market. But OPEC+’s massive supply cuts since April mean any additional output can put downward pressure on prices. If things go smoothly in Libya, an extra million bpd of oil could be online. That can only be bad for oil bulls.
European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #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.
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.
Moody's downgrades #Kuwait on liquidity squeeze, weak governance | Reuters
Moody's downgrades Kuwait on liquidity squeeze, weak governance | Reuters:
Moody’s downgraded Kuwait’s rating citing higher liquidity risks and weaker governance and institutional strength, as the Gulf state, battered by low oil prices, struggles to pass a law allowing it to issue international debt.
“In the continued absence of legal authorization to issue debt or draw on the sovereign wealth fund assets held in the Future Generations Fund, available liquid resources are nearing depletion, introducing liquidity risk despite Kuwait’s extraordinary fiscal strength,” the rating agency said.
Moody’s Investor Service downgraded Kuwait by two notches to A1 from Aa2.
When Kuwait last issued debt in the international markets in 2017, its bonds traded close to paper issued by Abu Dhabi, considered the safest credit in the region, as a vast oil-driven financial wealth gave investors confidence.
Moody’s downgraded Kuwait’s rating citing higher liquidity risks and weaker governance and institutional strength, as the Gulf state, battered by low oil prices, struggles to pass a law allowing it to issue international debt.
“In the continued absence of legal authorization to issue debt or draw on the sovereign wealth fund assets held in the Future Generations Fund, available liquid resources are nearing depletion, introducing liquidity risk despite Kuwait’s extraordinary fiscal strength,” the rating agency said.
Moody’s Investor Service downgraded Kuwait by two notches to A1 from Aa2.
When Kuwait last issued debt in the international markets in 2017, its bonds traded close to paper issued by Abu Dhabi, considered the safest credit in the region, as a vast oil-driven financial wealth gave investors confidence.
Oil falls after surprise increase in U.S. crude inventories | Reuters
Oil falls after surprise increase in U.S. crude inventories | Reuters:
Oil prices fell more than 1% on Wednesday after an industry group reported an unexpected rise in U.S. crude inventories, renewing concerns about fuel demand that caused a steep selloff earlier in the week.
Brent crude futures LCOc1 fell 33 cents, or 0.8%, at $41.39 a barrel by 0641 GMT, and earlier fell by as much as 1.2% to $40.21.
U.S. West Texas Intermediate crude futures CLc1 dropped 40 cents, or 1%, to $39.40 a barrel after earlier declining by as much as 1.4% to $39.26.
Both contracts fell more than 4% on Monday, the most in two weeks, though they rose on Tuesday.
Oil prices fell more than 1% on Wednesday after an industry group reported an unexpected rise in U.S. crude inventories, renewing concerns about fuel demand that caused a steep selloff earlier in the week.
Brent crude futures LCOc1 fell 33 cents, or 0.8%, at $41.39 a barrel by 0641 GMT, and earlier fell by as much as 1.2% to $40.21.
U.S. West Texas Intermediate crude futures CLc1 dropped 40 cents, or 1%, to $39.40 a barrel after earlier declining by as much as 1.4% to $39.26.
Both contracts fell more than 4% on Monday, the most in two weeks, though they rose on Tuesday.