Oil rises 2% as OPEC complies with production cuts | Reuters:
Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases.
Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut.
Wall Street’s main indexes opened higher on Wednesday, supported by heavyweight technology stocks. The dollar traded lower, which can boost oil as investors switch asset classes.
“Between the dollar, the EIA and the warning from the IEA that may impact future OPEC policy, the tone has turned bullish here,” said Bob Yawger, director of energy futures at Mizuho in New York.
Brent crude futures LCOc1 for December delivery settled up 87 cents, or 2.05%, at $43.32 a barrel. U.S. West Texas Intermediate CLc1 futures also traded higher, settling up 84 cents, 2.09%, at $41.04 a barrel.
Wednesday 14 October 2020
Qatari Second-Quarter GDP Drops to Lowest Since 2012 on Pandemic - Bloomberg
Qatari Second-Quarter GDP Drops to Lowest Since 2012 on Pandemic - Bloomberg:
Qatar’s economy performed its worst since at least 2012 during the second quarter amid lockdown measures to combat the coronavirus.
The gas-rich nation’s gross domestic product fell 6.1% in the April-to-June period on an annual basis, according to estimates by the Planning and Statistics Authority. The economy contracted 1% in the same period of 2019.
Transportation, warehousing, retail trade, accommodation and leisure services in the world’s biggest shipper of liquefied natural gas were especially hit by the Covid-19 pandemic.
The International Monetary Fund projects Qatar’s GDP to fall 4.5% this year, the smallest contraction among Arab Gulf states.
Qatar’s economy performed its worst since at least 2012 during the second quarter amid lockdown measures to combat the coronavirus.
The gas-rich nation’s gross domestic product fell 6.1% in the April-to-June period on an annual basis, according to estimates by the Planning and Statistics Authority. The economy contracted 1% in the same period of 2019.
Transportation, warehousing, retail trade, accommodation and leisure services in the world’s biggest shipper of liquefied natural gas were especially hit by the Covid-19 pandemic.
The International Monetary Fund projects Qatar’s GDP to fall 4.5% this year, the smallest contraction among Arab Gulf states.
OPEC+ Oil Boost to Leave Market in Precarious Balance, IEA Says - Bloomberg
OPEC+ Oil Boost to Leave Market in Precarious Balance, IEA Says - Bloomberg:
The outlook for oil “remains fragile” as the pandemic depresses demand, and OPEC’s plans to increase supply next year will leave global markets precariously balanced, the International Energy Agency said.
“There is a risk that the demand recovery is stalled by the recent increase in Covid-19 cases in many countries,” the IEA said in its monthly market report.
At the same time, markets are set to receive fresh supplies in January as OPEC and its partners relax some of the measures they’ve taken to prevent a glut.
The acceleration in virus infections is leading many in the market to question if the Organization of Petroleum Exporting Countries and its allies will increase supply from January. Producers inside the group are also having doubts, according to delegates. Still, United Arab Emirates Energy Minister Suhail Al Mazrouei said on Tuesday that, for now, OPEC+ plans to proceed with the supply boost as scheduled.
The outlook for oil “remains fragile” as the pandemic depresses demand, and OPEC’s plans to increase supply next year will leave global markets precariously balanced, the International Energy Agency said.
“There is a risk that the demand recovery is stalled by the recent increase in Covid-19 cases in many countries,” the IEA said in its monthly market report.
At the same time, markets are set to receive fresh supplies in January as OPEC and its partners relax some of the measures they’ve taken to prevent a glut.
The acceleration in virus infections is leading many in the market to question if the Organization of Petroleum Exporting Countries and its allies will increase supply from January. Producers inside the group are also having doubts, according to delegates. Still, United Arab Emirates Energy Minister Suhail Al Mazrouei said on Tuesday that, for now, OPEC+ plans to proceed with the supply boost as scheduled.
Analysis: Reform momentum of #Oman's new ruler faces headwind of COVID-19 reality | Reuters
Analysis: Reform momentum of Oman's new ruler faces headwind of COVID-19 reality | Reuters:
Oman’s ruler has moved to overhaul the Gulf Arab state’s creaking finances since taking power this year but the coronavirus crisis is likely to delay deeper reforms needed to shore up the economy at a time of low oil prices.
Oman piled up debt at breakneck speed in the past few years, while plans to diversify the small oil producer’s economy and introduce sensitive tax and subsidies reform dragged under Sultan Qaboos who died in January after half a century in power.
New ruler Sultan Haitham has shaken up the government and state entities, and this week approved introducing value-added-tax in April in a sign to investors - ahead of an international bond sale - that he is open to reforms in a country that saw Arab Spring-like protests in 2011.
“This government has to take the tough decisions,” World Bank Gulf country director Issam Abousleiman said.
Oman’s ruler has moved to overhaul the Gulf Arab state’s creaking finances since taking power this year but the coronavirus crisis is likely to delay deeper reforms needed to shore up the economy at a time of low oil prices.
FILE PHOTO: Sultan Haitham bin Tariq al-Said gives a speech after being sworn in before the royal family council
in Muscat, Oman January 11, 2020. REUTERS/Sultan Al Hasani/File Photo
Oman piled up debt at breakneck speed in the past few years, while plans to diversify the small oil producer’s economy and introduce sensitive tax and subsidies reform dragged under Sultan Qaboos who died in January after half a century in power.
New ruler Sultan Haitham has shaken up the government and state entities, and this week approved introducing value-added-tax in April in a sign to investors - ahead of an international bond sale - that he is open to reforms in a country that saw Arab Spring-like protests in 2011.
“This government has to take the tough decisions,” World Bank Gulf country director Issam Abousleiman said.
#Saudi bank mergers welcome as long as good for economy - central bank governor | Reuters
Saudi bank mergers welcome as long as good for economy - central bank governor | Reuters:
Saudi Arabia’s central bank governor said on Wednesday that bank mergers are welcome as long as they are good for the economy, after its biggest bank entered a binding merger agreement to create the Gulf’s third largest lender.
The Saudi Arabian Monetary Authority (SAMA) is currently considering issuing new bank licences, its governor, Ahmed al-Kholifey, said.
Saudi Arabia’s central bank governor said on Wednesday that bank mergers are welcome as long as they are good for the economy, after its biggest bank entered a binding merger agreement to create the Gulf’s third largest lender.
The Saudi Arabian Monetary Authority (SAMA) is currently considering issuing new bank licences, its governor, Ahmed al-Kholifey, said.
#Qatar Investment Authority bets big on private and public equity - CEO | Reuters
Qatar Investment Authority bets big on private and public equity - CEO | Reuters:
Qatar Investment Authority has more than half of its assets invested in private equity and listed shares as it chases higher returns, its chief executive said on Wednesday.
As a long-term sovereign fund without short-term liabilities to meet, QIA’s risk appetite is bigger than some of its peers, said Mansoor Al-Mahmoud during an International Institute of Finance event.
“Our approach is always to be a long-term investor, this gives us an advantage,” he said. “Companies are looking for investors with long-term horizons.”
The wealth fund, with assets estimated by the Sovereign Wealth Fund Institute at about $295 billion, has between 50% and 55% of asset allocation focused on private equity and public equity, Mahmoud said.
Qatar Investment Authority has more than half of its assets invested in private equity and listed shares as it chases higher returns, its chief executive said on Wednesday.
As a long-term sovereign fund without short-term liabilities to meet, QIA’s risk appetite is bigger than some of its peers, said Mansoor Al-Mahmoud during an International Institute of Finance event.
“Our approach is always to be a long-term investor, this gives us an advantage,” he said. “Companies are looking for investors with long-term horizons.”
The wealth fund, with assets estimated by the Sovereign Wealth Fund Institute at about $295 billion, has between 50% and 55% of asset allocation focused on private equity and public equity, Mahmoud said.
#UAE's ADNOC to explore clean energy expansion, CEO says | Reuters
UAE's ADNOC to explore clean energy expansion, CEO says | Reuters:
Abu Dhabi National Oil Company (ADNOC) will look at expanding into clean energy, with investments in hydrogen an area of interest for the oil producer, chief executive officer Sultan al-Jaber said on Wednesday.
“We are pursuing hydrogen as a potential new venture as part of clean energy and clean technology strategy,” al-Jaber told the Energy Intelligence forum.
Hydrogen has long-been touted as a potential clean fuel as it only emits water vapour but it has failed to gain traction, mainly because of historically high production, transportation and storage costs.
But the oil company expects that hydrocarbons will remain at the core of its business.
Abu Dhabi National Oil Company (ADNOC) will look at expanding into clean energy, with investments in hydrogen an area of interest for the oil producer, chief executive officer Sultan al-Jaber said on Wednesday.
“We are pursuing hydrogen as a potential new venture as part of clean energy and clean technology strategy,” al-Jaber told the Energy Intelligence forum.
Hydrogen has long-been touted as a potential clean fuel as it only emits water vapour but it has failed to gain traction, mainly because of historically high production, transportation and storage costs.
But the oil company expects that hydrocarbons will remain at the core of its business.
IMF revises down economic forecasts for most Gulf countries | Reuters
IMF revises down economic forecasts for most Gulf countries | Reuters:
The International Monetary Fund (IMF) revised down on Tuesday its 2020 real gross domestic product (GDP) projections for most Gulf countries, as it warned the economic outlook was worsening for many emerging markets amid the coronavirus crisis.
The IMF forecast a 2020 global contraction of 4.4% in its latest World Economic Outlook, an improvement over a 5.2% contraction predicted in June, but said it was still the worst economic crisis since the 1930s Great Depression.
Countries in the oil-rich Gulf are suffering the double shock of the coronavirus crisis, which is dampening demand in the non-oil economy, and low oil prices, which have been hurting revenue this year.
The IMF revised down its previous forecasts for all Gulf countries except Saudi Arabia, which is now expected to contract 5.4% this year, against a previous 6.8% contraction estimate.
The International Monetary Fund (IMF) revised down on Tuesday its 2020 real gross domestic product (GDP) projections for most Gulf countries, as it warned the economic outlook was worsening for many emerging markets amid the coronavirus crisis.
The IMF forecast a 2020 global contraction of 4.4% in its latest World Economic Outlook, an improvement over a 5.2% contraction predicted in June, but said it was still the worst economic crisis since the 1930s Great Depression.
Countries in the oil-rich Gulf are suffering the double shock of the coronavirus crisis, which is dampening demand in the non-oil economy, and low oil prices, which have been hurting revenue this year.
The IMF revised down its previous forecasts for all Gulf countries except Saudi Arabia, which is now expected to contract 5.4% this year, against a previous 6.8% contraction estimate.
#Dubai's utilities sector attracts $11bln worth of PPP investments | ZAWYA MENA Edition
Dubai's utilities sector attracts $11bln worth of PPP investments | ZAWYA MENA Edition:
Dubai’s utilities sector has attracted investments totalling nearly 40 billion UAE dirhams ($11 billion) through the public-private partnership (PPP) route, according to the Dubai Electricity and Water Authority (DEWA).
The Dubai utility said in a statement that investments were routed through the Independent Power Producer (IPP) model.
DEWA is using the IPP model to develop solar power projects within the largest single-site solar park in the world. The Mohammed bin Rashid Al Maktoum Solar Park has a planned capacity of 5,000 megawatts (MW) by 2030 with investments up to 50 billion dirhams ($13.6 billion).
DEWA MD and CEO Saeed Mohammed Al Tayer said DEWA had achieved the lowest global solar power prices five times in a row through the IPP model.
Dubai’s utilities sector has attracted investments totalling nearly 40 billion UAE dirhams ($11 billion) through the public-private partnership (PPP) route, according to the Dubai Electricity and Water Authority (DEWA).
The Dubai utility said in a statement that investments were routed through the Independent Power Producer (IPP) model.
DEWA is using the IPP model to develop solar power projects within the largest single-site solar park in the world. The Mohammed bin Rashid Al Maktoum Solar Park has a planned capacity of 5,000 megawatts (MW) by 2030 with investments up to 50 billion dirhams ($13.6 billion).
DEWA MD and CEO Saeed Mohammed Al Tayer said DEWA had achieved the lowest global solar power prices five times in a row through the IPP model.
First #AbuDhabi Bank denies merger talks with Abu Dhabi Islamic Bank | ZAWYA MENA Edition
First Abu Dhabi Bank denies merger talks with Abu Dhabi Islamic Bank | ZAWYA MENA Edition:
First Abu Dhabi Bank (FAB) said on Wednesday it was not in merger talks with Abu Dhabi Islamic Bank.
The comment followed a local news report by Arabian Business which said Abu Dhabi's largest bank by assets had renewed "discussions for a possible merger deal" with the Shariah-compliant lender.
"Our official stance on this remains the same as our official statement published on ADX in April 2019," FAB said in an emailed response to Reuters.
Citing unnamed sources, Bloomberg reported in April 2019 that Abu Dhabi was considering merging the two lenders to create the Gulf region’s largest lender.
First Abu Dhabi Bank (FAB) said on Wednesday it was not in merger talks with Abu Dhabi Islamic Bank.
The comment followed a local news report by Arabian Business which said Abu Dhabi's largest bank by assets had renewed "discussions for a possible merger deal" with the Shariah-compliant lender.
"Our official stance on this remains the same as our official statement published on ADX in April 2019," FAB said in an emailed response to Reuters.
Citing unnamed sources, Bloomberg reported in April 2019 that Abu Dhabi was considering merging the two lenders to create the Gulf region’s largest lender.
#Dubai property prices, rents could drop further in Q4 2020 - Chestertons | ZAWYA MENA Edition
Dubai property prices, rents could drop further in Q4 2020 - Chestertons | ZAWYA MENA Edition:
Dubai’s real estate market may have to brace for tougher times ahead, though more villas and apartments were sold in the third quarter of the year, Chestertons said on Wednesday.
Sales rose by 50 percent in the third quarter of the year compared to the previous quarter. However, the total transaction volumes were still down by 21.7 percent, compared to the third quarter of 2019.
Chris Hobden, head of strategic consultancy at Chestertons MENA, said property prices and rents could drop further during the last three months of the year, citing that the economic slowdown caused by the pandemic, coupled with a decline in population, could dampen the market.
“Dubai witnessed a clear increase in transactional activity during the third quarter, building on a recovery seen during the final month of the second quarter, following the easing of COVID-19 restrictions. However, transaction volumes remain lower annually, and we expect both prices and rents to face further downward pressure over the final quarter of 2020,” Hobden said.
Dubai’s real estate market may have to brace for tougher times ahead, though more villas and apartments were sold in the third quarter of the year, Chestertons said on Wednesday.
Sales rose by 50 percent in the third quarter of the year compared to the previous quarter. However, the total transaction volumes were still down by 21.7 percent, compared to the third quarter of 2019.
Chris Hobden, head of strategic consultancy at Chestertons MENA, said property prices and rents could drop further during the last three months of the year, citing that the economic slowdown caused by the pandemic, coupled with a decline in population, could dampen the market.
“Dubai witnessed a clear increase in transactional activity during the third quarter, building on a recovery seen during the final month of the second quarter, following the easing of COVID-19 restrictions. However, transaction volumes remain lower annually, and we expect both prices and rents to face further downward pressure over the final quarter of 2020,” Hobden said.
Demise of Gulf wise men bodes ill for Middle East conflicts | Financial Times
Demise of Gulf wise men bodes ill for Middle East conflicts | Financial Times:
The death of two Gulf peacemakers this year augurs ill for the war-torn Middle East, where conflict has defined the decade that followed the Arab spring.
Sheikh Sabah, Kuwait’s emir from 2006 who died last month aged 91, sought to resolve regional conflicts over his half a century of shaping foreign policy in the most democratic state in the Gulf.
When Saudi Arabia and the United Arab Emirates led a trade and travel embargo over fellow Gulf state Qatar, accusing Doha of fostering extremism, the elder statesman Sheikh Sabah adopted his traditional mantle as mediator, shuttling between capitals seeking to restore unity within the six-member Gulf Cooperation Council.
While the dispute outlasted his attempts for resolution, Sheikh Sabah claimed that mediation had at least prevented military conflict between Gulf neighbours who used to describe each other as “brotherly states” but now engage in virulent smear campaigns on social media.
The death of two Gulf peacemakers this year augurs ill for the war-torn Middle East, where conflict has defined the decade that followed the Arab spring.
Sheikh Sabah, Kuwait’s emir from 2006 who died last month aged 91, sought to resolve regional conflicts over his half a century of shaping foreign policy in the most democratic state in the Gulf.
When Saudi Arabia and the United Arab Emirates led a trade and travel embargo over fellow Gulf state Qatar, accusing Doha of fostering extremism, the elder statesman Sheikh Sabah adopted his traditional mantle as mediator, shuttling between capitals seeking to restore unity within the six-member Gulf Cooperation Council.
While the dispute outlasted his attempts for resolution, Sheikh Sabah claimed that mediation had at least prevented military conflict between Gulf neighbours who used to describe each other as “brotherly states” but now engage in virulent smear campaigns on social media.
S&P Sees ‘Start of a New Era’ for Gulf Banks as Oil Wealth Ebbs - Bloomberg
S&P Sees ‘Start of a New Era’ for Gulf Banks as Oil Wealth Ebbs - Bloomberg:
Gulf banks are entering an age of weaker profits as a result of the coronavirus outbreak and a decline in crude prices, according to S&P Global Ratings.
“The pandemic and drop in oil prices could mark the start of a new era,” S&P analysts led by Mohamed Damak in Dubai said in a report. “This new era is characterized by a decline in oil wealth, a lower multiplier effect in the local economies, and lower profitability.”
With a sluggish economic recovery likely to hold back lending in the six-member Gulf Cooperation Council, a period of reduced profitability could be “longer lasting,” according to S&P. The rating company also predicts that regional banks’ asset quality may deteriorate at a faster rate.
“Rated banks in the GCC face an uphill struggle in the next 18 months due to the protracted nature of the economic recovery and the expected gradual withdrawal of regulatory forbearance measures,” S&P’s analysts said.
Gulf banks are entering an age of weaker profits as a result of the coronavirus outbreak and a decline in crude prices, according to S&P Global Ratings.
“The pandemic and drop in oil prices could mark the start of a new era,” S&P analysts led by Mohamed Damak in Dubai said in a report. “This new era is characterized by a decline in oil wealth, a lower multiplier effect in the local economies, and lower profitability.”
With a sluggish economic recovery likely to hold back lending in the six-member Gulf Cooperation Council, a period of reduced profitability could be “longer lasting,” according to S&P. The rating company also predicts that regional banks’ asset quality may deteriorate at a faster rate.
“Rated banks in the GCC face an uphill struggle in the next 18 months due to the protracted nature of the economic recovery and the expected gradual withdrawal of regulatory forbearance measures,” S&P’s analysts said.
European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #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.
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.
'Systemic collapse' looms in aviation; Gulf carriers, airports 'at risk' | ZAWYA MENA Edition
'Systemic collapse' looms in aviation; Gulf carriers, airports 'at risk' | ZAWYA MENA Edition:
The aviation industry could face a “systemic collapse” without direct monetary support and coordinated COVID-19 testing regime in place, and the Middle East market is among those that are financially at risk, officials said.
Carriers around the world continue to burn through cash due to the “rupture in global air connectivity that’s threatening to wipe out some 4.8 million aviation jobs and a further 41.2 million across the travel and tourism sector, according to Alexandre de Juniac, CEO of the International Air Transport Association (IATA).
“The COVID-19 pandemic continues to devastate the aviation industry. International traffic has all but disappeared – we are carrying only about 10 percent of normal levels,” de Juniac said during a press briefing.
The industry has already seen massive job losses following the collapse of air travel during the global lockdown in March. Airlines in the Gulf, home to some of the world’s so-called “super connectors” are among those badly hit.
The aviation industry could face a “systemic collapse” without direct monetary support and coordinated COVID-19 testing regime in place, and the Middle East market is among those that are financially at risk, officials said.
Carriers around the world continue to burn through cash due to the “rupture in global air connectivity that’s threatening to wipe out some 4.8 million aviation jobs and a further 41.2 million across the travel and tourism sector, according to Alexandre de Juniac, CEO of the International Air Transport Association (IATA).
“The COVID-19 pandemic continues to devastate the aviation industry. International traffic has all but disappeared – we are carrying only about 10 percent of normal levels,” de Juniac said during a press briefing.
The industry has already seen massive job losses following the collapse of air travel during the global lockdown in March. Airlines in the Gulf, home to some of the world’s so-called “super connectors” are among those badly hit.
Oil prices slip as rising coronavirus cases stoke demand concerns | Reuters
Oil prices slip as rising coronavirus cases stoke demand concerns | Reuters:
Oil prices slipped on Wednesday on concerns that fuel demand will continue to falter as rising coronavirus cases across Europe and in the United States, the world’s biggest oil consumer, could impede economic growth.
The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report on Tuesday that oil demand in 2021 will rise by 6.54 million barrels per day (bpd) to 96.84 million bpd, 80,000 bpd less than its forecast a month ago, as a result of the economic dislocations caused by the coronavirus pandemic.
Brent crude futures LCOc1 for December fell by 17 cents, or 0.4%, to $42.28 a barrel by 0649 GMT while U.S. West Texas Intermediate CLc1 futures were down 18 cents, or 0.5%, to $40.02.
The heads of two of the world’s biggest oil producers, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, discussed the current situation in the energy markets during a telephone call, the Kremlin said on Tuesday.
Oil prices slipped on Wednesday on concerns that fuel demand will continue to falter as rising coronavirus cases across Europe and in the United States, the world’s biggest oil consumer, could impede economic growth.
The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report on Tuesday that oil demand in 2021 will rise by 6.54 million barrels per day (bpd) to 96.84 million bpd, 80,000 bpd less than its forecast a month ago, as a result of the economic dislocations caused by the coronavirus pandemic.
Brent crude futures LCOc1 for December fell by 17 cents, or 0.4%, to $42.28 a barrel by 0649 GMT while U.S. West Texas Intermediate CLc1 futures were down 18 cents, or 0.5%, to $40.02.
The heads of two of the world’s biggest oil producers, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, discussed the current situation in the energy markets during a telephone call, the Kremlin said on Tuesday.
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