Oil up on U.S. stimulus hopes, rising virus cases keep prices in check | Reuters

Oil up on U.S. stimulus hopes, rising virus cases keep prices in check | Reuters: 

Oil gained more than 1% on Tuesday on the prospect the United States was nearing a deal on coronavirus relief, but the threat to demand from rising COVID-19 cases worldwide and increased Libyan output kept prices from moving higher. 

November U.S. West Texas Intermediate (WTI) crude CLc1 futures settled at $41.46 a barrel, up 63 cents, or 1.54%. The more active December contract settled at $41.70, gaining 64 cents. 

Brent crude futures LCOc1 for December delivery settled at $43.16 a barrel, rising 54 cents, or 1.27%. 

Investors are following negotiations between U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over another U.S. coronavirus aid package, said John Kilduff, partner at Again Capital in New York.

#Israel and #UAE sign visa and pipeline deals to cement alliance | Financial Times

Israel and UAE sign visa and pipeline deals to cement alliance | Financial Times: 

Israel and the United Arab Emirates on Tuesday signed a flurry of deals, mediated by the US, to add heft to a normalisation agreement in which the Gulf state has pivoted towards Israel after decades of backing the Palestinians. 

Under one of the agreements, Israelis will be allowed to travel to the Emirates visa-free, the first Arab nation to allow this, with Emiratis given the same right when travelling to the Jewish state. 

The move, which must first be ratified by both countries’ parliaments, is a boost for Emirates, the state-owned airline, which is seeking to pick up the bulk of eastbound Israeli passengers after the near-collapse of Israeli carrier El Al due to the coronavirus pandemic. 

In a reminder of the regional dimensions of the UAE’s realignment with Israel, plans were also announced to transport Emirati crude from the Red Sea to the Mediterranean through Israel, in a pipeline that Israel seized from a joint Israeli-Iranian venture after the 1979 revolution brought the Ayatollah Khomeini to power in Iran.

Switzerland of the Middle East: Economic crisis threatens #Oman’s neutrality | Financial Times

Switzerland of the Middle East: Economic crisis threatens Oman’s neutrality | Financial Times: 

Sandwiched between Saudi Arabia and Iran, Oman has long prized its neutrality, garnering a reputation as the Middle East’s Switzerland. 

But the Gulf state’s ability to steer clear of regional power struggles has been put at risk by economic woes that have been exacerbated by the coronavirus pandemic and the slump in oil prices. The IMF forecasts an economic contraction of 10 per cent this year, far steeper than the Middle Eastern average. 

The crisis has been a baptism of fire for Sultan Haitham bin Tariq Al Said, who succeeded Qaboos bin Said Al Said in January after the death of the leader who shaped modern Oman during his half century on the throne. 

As the 65-year-old former culture minister grapples with a ballooning budget deficit and rising debts, he has to decide whether to turn to wealthier neighbours for a bailout or try to balance the books through other means while maintaining social stability.

#AbuDhabi’s ADQ to Form Digital Bank With $545 Million Capital - Bloomberg

Abu Dhabi’s ADQ to Form Digital Bank With $545 Million Capital - Bloomberg: 

Abu Dhabi investment firm ADQ plans to set up a digital bank with an initial capital of 2 billion dirhams ($545 million) after obtaining the legacy license of First Gulf Bank. 

First Abu Dhabi Bank, formed with the merger of First Gulf Bank and National Bank of Abu Dhabi, said Tuesday its shareholders approved the transfer of the license to ADQ. 

First Abu Dhabi Bank, the United Arab Emirates’ largest lender, will own 10% of the digital bank and will have preferential access to an additional 10% when it goes public.

ADQ is a holding company for some of the biggest assets in the UAE, including the Abu Dhabi Securities Exchange and Abu Dhabi Airports. 

The company on Monday said it’ll partner with LuLu Group International, which runs one of the Middle East’s largest hypermarket chains, by investing $1 billion to back the grocer’s expansion in Egypt.

Israel and UAE Open Talks Over Top Secret Oil Pipeline - Bloomberg

Israel and UAE Open Talks Over Top Secret Oil Pipeline - Bloomberg: 

Israel and the United Arab Emirates have opened talks over an oil pipeline linking the Red Sea with the Mediterranean and whose operations Israeli officials treat as top secret. 

Europe Asia Pipeline Co., controlled by Israel’s government, and UAE-based MED-RED Land Bridge Ltd. signed a memorandum of understanding to collaborate on the transportation of crude and oil products between the Persian Gulf and Western markets, according to an EAPC statement on Tuesday. 

The agreement comes after the UAE, OPEC’s third-biggest oil producer, and Israel announced in August they would normalize ties. The two have since discussed establishing embassies, starting direct flights and business deals. 

EAPC operates the Eilat-Ashkelon pipeline, built by Israel and Iran in the 1960s. It has a capacity of 600,000 barrels a day and almost 23 million barrels of storage space. Most oil sent from the Gulf to Europe is either shipped through the Suez Canal or via Egypt’s Sumed pipeline, which can pump 2.5 million barrels daily.

Etihad Airways plans transition Islamic bonds | Reuters

Etihad Airways plans transition Islamic bonds | Reuters: 

Etihad Airways, wholly owned by the Abu Dhabi government, is planning to sell U.S. dollar-denominated ‘transition’ sukuk, or Islamic bonds, a document issued by one of the banks leading the deal showed. 

Proceeds of so-called transition bonds are used by companies to gradually switch to more environmentally sustainable operations. 

Etihad has hired HSBC and Standard Chartered as joint global coordinators and “joint sustainability structuring agents” for the planned deal.

Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank and Mashreq Bank will also be involved in the transaction. 

The planned sukuk, which will be issued depending on market conditions, will have a five-year maturity and are part of a $3 billion sukuk programme expected to be rated ‘A’ by Fitch.

European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #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’s Union Properties Restructuring Debt to Weather Slump - Bloomberg

Dubai’s Union Properties Restructuring Debt to Weather Slump - Bloomberg: 

Union Properties PJSC is restructuring debt and trimming costs to weather a slump in Dubai’s real estate market. 

“We are focusing on restructuring our balance sheet, and all our efforts will be directed to reduce our accumulated losses in the past,” Vice Chairman Fathi Ben Grira said in an interview with Bloomberg TV. The company restructured 946 million dirhams ($258 million) of debt in August. 

Chronic oversupply has battered property values and rents over the past six years in Dubai. Measures to curb the spread of the coronavirus aggravated that decline, and demand is expected to drop further as jobs are lost and expatriates forced to move out. 

Still, Union Properties returned to a profit in the third quarter and has plans to develop a new mixed-use project in Dubai. Ben Grira said on Tuesday that the company wasn’t materially impacted by the coronavirus.

Cut-Price Deals Show Shale’s Rapid Decline From Debt-Fueled Boom - Bloomberg

Cut-Price Deals Show Shale’s Rapid Decline From Debt-Fueled Boom - Bloomberg:

There is no more dramatic sign of the U.S. shale industry’s fall from grace than one of the best in the business being sold off for less than a third of its peak value.

Concho Resources Inc., an early explorer of the Permian Basin’s once-coveted oil riches that was worth $32 billion just two years ago, is selling for $9.7 billion in stock. ConocoPhillips is paying a meager 15% premium over Concho’s closing price on Oct. 13, the last trading session before Bloomberg News first reported the companies were in talks.

Concho is not alone: More than half of the shale deals this year came with a premium of less than 10% over stock prices that had already plunged in the past couple of years, according to data compiled by Bloomberg.

Shale explorers have rapidly lost favor with Wall Street after years of high debt, poor shareholder returns and value-destroying deals. The devastating impact of the Covid-19 pandemic on oil demand made matters worse, pushing many into bankruptcy. Private equity firm Kimmeridge Energy is among investors urging the highly fragmented industry to seek low-premium deals, gain scale and cut costs.

MIDEAST DEBT- #Oman's bond market return to test credibility of reform path | Reuters

MIDEAST DEBT-Oman's bond market return to test credibility of reform path | Reuters: 

Oman’s return to the international bond market this week will be a test of its ability to convince investors that long-awaited fiscal reforms have started to put it on a sustainable financial footing.

The oil-producing Gulf state, rated below investment grade by all the major credit agencies, announced on Monday plans to issue bonds with maturities of three, seven and 12 years, in what would be its first global debt sale this year.

Sultan Haitham, who became Oman’s ruler in January, has made shaking up state finances one of his priorities.

But investors would like to see more concrete steps being taken and, after a further sovereign downgrade last week, may require the new bonds to offer a significant premium over the country’s existing debt.

U.S., #UAE, #Israel to Form Joint $3 Billion Fund in Jerusalem - Bloomberg

U.S., UAE, Israel to Form Joint $3 Billion Fund in Jerusalem - Bloomberg: 

Israel, the United Arab Emirates and the U.S. will set up a joint $3 billion investment fund headquartered in Jerusalem as part of efforts to normalize relations and promote regional economic development. 

The fund was announced on Tuesday during a first official visit to Israel by a UAE delegation, following a formal agreement on normalizing ties last month, to which Bahrain was also a party. It will invest in projects in the Middle East and North Africa. 

The venture will focus on areas including infrastructure, energy security, agricultural productivity and clean water access, according to a statement from the U.S. Embassy in Israel. The statement added the venture would mobilize “private sector-led investment.” 

Adam Boehler, chief executive for the U.S. International Development Finance Corp., said the fund was already making progress on two deals: An energy bridge connecting the Israeli cities of Ashkelon and Eilat, and a program modernizing Palestinian and Jordanian checkpoints.

Biggest #Dubai Bank More Than Doubles Provisions; Profit Dips - Bloomberg

Biggest Dubai Bank More Than Doubles Provisions; Profit Dips - Bloomberg: 

Emirates NBD PJSC braced for credit losses by more than doubling the amount of money set aside in provisions amid the coronavirus pandemic as it reported a 55% slump in its nine-month profit. 

Dubai’s biggest bank increased impairment allowances more than anticipated by some analysts, bringing the total to 6.4 billion dirhams ($1.7 billion), according to a statement on Tuesday. Profit dropped to 5.6 billion dirhams on higher impairments and as a gain from last year’s sale of a stake in Network International Holdings Plc wasn’t repeated. 

Built on trade and tourism in a region reliant on oil, Dubai’s economy has buckled under the coronavirus pandemic and low crude prices. With job losses and weak domestic demand still a drag on businesses, banks in the Gulf are increasing provisioning in preparation for the possible deterioration in asset quality. 

“Loan-loss charges were higher than expected,” Jaap Meijer, head of equity research at Arqaam Capital, said in a message. “More deferred loans may need to be impaired.”

Emirates NBD nine-month numbers vs year ago:

• Profit 5.6 billion dirhams vs 12.5 billion dirhams
• Impairments 6.36 billion dirhams vs 2.76 billion dirhams
• Excluding the gain from Network International, profit fell 30%
• Total income 18.28 billion dirhams vs 15.5 billion
• Net interest income 13.4 billion dirhams vs 11.1 billion
• Cost to income ratio 31.8% vs 30.3%
• Net interest margin 2.73% vs 2.82%

Oil prices steady but rising infections and oil supply weigh | Reuters

Oil prices steady but rising infections and oil supply weigh | Reuters: 

Oil prices were little changed on Tuesday, steadying after three days of declines due to worries that a resurgence of coronavirus cases globally is stifling a recovery in fuel demand, while growing output from Libya adds to plentiful supply.

Brent crude LCOc1 futures were trading down 4 cents, or 0.1%, at $42.58 a barrel by 0635 GMT, recovering ground after falling to as low as $42.19 earlier in the session.

U.S. West Texas Intermediate (WTI) crude CLc1 futures edged up 1 cent to $40.84 a barrel, having earlier dropped to $40.48.

COVID-19 cases topped 40 million on Monday, according to a Reuters tally, with a growing second wave in Europe and North America sparking new clampdowns.

MIDEAST STOCKS-Most major Gulf markets fall; #Qatar rises | Nasdaq

MIDEAST STOCKS-Most major Gulf markets fall; Qatar rises | Nasdaq: 

Most major stock markets in the Gulf fell on Tuesday, with the Dubai index hit by losses in top lender Emirates NBD, while Qatar bucked the trend.

Saudi Arabia's benchmark index .TASI dropped 0.7%, with oil behemoth Saudi Aramco 2222.SE declining 1% and Al Rajhi Bank 1120.SE losing 0.3%.

Saudi Aramco and petrochemical firm Saudi Basic Industries 2010.SE have decided to re-evaluate their $20 billion crude-oil-to-chemicals project and are now looking at integrating existing facilities instead.

The decision comes as oil companies globally re-assess energy projects to conserve cash, with a collapse in demand caused by the coronavirus pandemic threatening to keep crude prices weak for a long time.

Dubai's main share index .DFMGI fell 0.6%, weighed down by a 1.5% fall in its biggest bank Emirates NBD ENBD.DU following a sharp decline in quarterly profit, as bad debt charges rose due to the COVID-19 crisis.

In the third quarter net profit fell to 1.56 billion dirhams ($424.7 million) from 5 billion dirhams last year when the bottom line was boosted by a stake sale in payments processor Network International NETW.L.

The Abu Dhabi index .ADI eased 0.1%, hurt by a 0.9% drop in Aldar Properties ALDAR.AD and a 0.5% decrease in Abu Dhabi Commercial Bank ADCB.AD.

In Qatar, the index .QSI rose 0.4%, with the Gulf's largest lender Qatar National Bank QNBK.QA advancing 2%, while Qatar Gas Transport Company QGTS.QA was up 1.1%.