Oil Falls for First Week in Two Months With Rally Losing Steam - Bloomberg

Oil Prices for Mar. 12, 2021: Brent Crude, WTI - Bloomberg

Oil in London fell for the first week in two months as signals of a patchy demand rebound across the globe and a stronger dollar held back crude’s rally.

Global benchmark Brent futures fell 0.6% on Friday. West Texas Intermediate also edged lower, posting its first weekly decline in three weeks. A fresh bout of bond volatility spurred a risk-off mood across markets, with U.S. equities declining and the dollar strengthening. Meanwhile, Indian fuel sales dipped in February amid higher pump prices, but demand has been climbing in the U.S. and the U.K.

“There was this bullish demand scenario out of Asia, in particular India, but that may be plateauing,” said John Kilduff, a partner at Again Capital LLC. Still, prices “are supported overall, with the OPEC+ disposition to hold back supplies.”

Oil settles near $70/bbl on hopes of recovering demand | Reuters

Oil settles near $70/bbl on hopes of recovering demand | Reuters

Oil settled near $70 a barrel on Friday, supported by production cuts by major oil producers and optimism about a demand recovery in the second half of the year.

Benchmark Brent settled down 41 cents, or 0.6%, to $69.22 a barrel. U.S. West Texas Intermediate crude also ended down 41 cents to $65.61 a barrel.

Brent and U.S. crude ended the week roughly flat after prices touched a 13-month high on Monday, following seven straight weeks of gains.

“Demand for risky assets such as oil continues to be buoyed by the White House relief package and an almost daily flow of optimistic vaccine headlines,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

The Organization of the Petroleum Exporting Countries forecast a stronger oil demand recovery this year, weighted to the second half. OPEC, Russia and its allies decided last week to maintain its output curbs almost unchanged.

#AbuDhabi's Arkan not to pay dividends until end 2022 after debt moratorium | Property – Gulf News

Abu Dhabi's Arkan not to pay dividends until end 2022 after debt moratorium | Property – Gulf News

Arkan, the Abu Dhabi based building materials company, will start paying off its loans and other commitments from mid-December 2022.

This follows a moratorium on repayments that it entered into its with principal lenders. But this comes with a clause – Arkan will not be making any dividend payments to shareholders until late 2022.

“In light of these challenging circumstances, the Board has decided not to pay dividends for the foreseeable future,” the company said in a statement. “Furthermore, the priority of the company going forward will be to lower its significant leverage levels and it may need to explore further capital structure options in the future.”

Arkan tapped restructuring specialists Rothschild & Co to come up with a plan to resolve its debt burden and payment obligations.

#UAE announces $10 billion fund for investments in #Israel | Government – Gulf News

UAE announces $10 billion fund for investments in Israel | Government – Gulf News

Following a constructive phone call His Highness Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, has received from Benjamin Netanyahu, Prime Minister of the State of Israel, the United Arab Emirates has announced the establishment of a $10 billion (Dh36 billion) fund aimed at strategic sectors in Israel.

Through this fund, the UAE will invest in and alongside Israel across sectors including energy, manufacturing, water, space, healthcare and agri-tech. The investment fund will support development initiatives to promote regional economic cooperation between the two countries. Fund allocations will derive from government and private sector institutions.

The fund builds on the historic Abraham Accord and aims to bolster economic ties between two of the region’s thriving economies, unlocking investments and partnership opportunities to drive socio-economic progress.

This initiative is an integral part of the historic peace accord signed by the UAE and Israel with the United States’ support, and demonstrates the benefits of peace by improving the lives of the region’s peoples. It is a manifestation of the new spirit of friendship and cooperation between the three countries, as well their common will to advance the region.

Oil Steady Near $70 With Dollar Rising and Demand Outlook Mixed - Bloomberg

Oil Steady Near $70 With Dollar Rising and Demand Outlook Mixed - Bloomberg

Oil steadied with the market facing a mixed demand outlook after a recent rally and the dollar climbing.

Futures in London were little changed below $70. The demand picture remains uneven across various regions, with Indian fuel sales falling in February amid higher pump prices, while demand is climbing in America and the U.K.



The global Brent benchmark started this week with a push above $70 a barrel after attacks on Saudi oil infrastructure, before retreating. While attention is centered on the recovery in demand and OPEC+ policy, there are concerns higher prices might encourage a surge in U.S. production by shale drillers in a move that would add to supply concerns amid sharply-rising flows of Iranian crude into China.

“We’ve tested the $70-$72 resistance for Brent, and that level held pretty well,” said Hans Van Cleef, senior Energy Economist at ABN Amro. “I’m still cautious for a serious downward correction.”

• Brent for May settlement rose was little changed at $69.63 a barrel at 10:11 a.m. London time
• West Texas Intermediate for April delivery lost 11 cents to $65.91

The Giants of U.S. Shale Are Proving OPEC Right With Discipline - Bloomberg

The Giants of U.S. Shale Are Proving OPEC Right With Discipline - Bloomberg

Saudi Arabia’s bet that the golden age of U.S. shale is over appears to be a safe one -- for now, at least.

A round-up of data on shale drillers shows they’re sticking to their pledge to cut costs, return money to shareholders and reduce debt. If they stay the course, it would validate the OPEC+ alliance’s high-stakes wager that it can curb output and drive crude prices higher without unleashing an onslaught of supply from U.S. rivals.

That’s still a big “if,” one that’s keeping the oil market on edge as crude’s rally makes it more tempting for shale producers to go back on their word. But the U.S. shale patch is showing little sign of a true comeback so far, and even a dramatic boost in activity would leave oil output below pre-pandemic levels until late next year. Drillers that have shown signs of straying from the script and boosting production have been punished by investors.

Publicly traded explorers that are remaining disciplined on output are helping to keep crude prices aloft, said Michael Tran, managing director for global energy strategy research at RBC Capital Markets. The motives of closely held producers, on the other hand, remain “an open-ended question,” he said. The number of oil rigs has already jumped 80% after bottoming out in August, Baker Hughes data show.

Gulf States Should Make the Most of Oil’s Last Boom - Bloomberg

Gulf States Should Make the Most of Oil’s Last Boom - Bloomberg

Oil prices are rebounding thanks to an extended OPEC+ production cut, a surge in demand as economies recover from the coronavirus pandemic, and the beginning of a supply reaction from a year of both diminished production and inventory draw-downs. This is good news for the oil producers of the Gulf Cooperation Council.

But we should resist the temptation to equate this price spike to surges of the past, particularly the so-called “magic decade” between 2003 and 2014. Even at $70 a barrel, the current prices do not meet fiscal break-even thresholds for most Gulf Arab states. The gap between revenue and fiscal expenditure has been so wide since 2015 that the rebound won’t alter the basic fact that governments need to find new sources of revenue.

It is telling that Saudi Arabia is betting competition from U.S. shale will not reignite. This means they can focus on market share and relationship-building with key Asian customers without fear of resurgent American production. An eco-friendly Biden administration also fits into that calculation.

We are approaching an energy inflection point in the global economy: plentiful oil supply, a demand plateau by 2030 and more competitive renewable-energy options, even as investors and consumers grow more leery of carbon-intensive products. The future of the GCC is still one in which oil revenues fail to meet growth goals of governments, with a knock-on effect on job expectations of citizens.

In other words, if there is an oil boom this year, it may well be the last.

RPT-COLUMN-Global oil inventories to become tight by mid-2021: Kemp | Reuters

RPT-COLUMN-Global oil inventories to become tight by mid-2021: Kemp | Reuters

Global refineries will increase crude processing sharply over the next six months to stabilise stocks of fuels such as gasoline and diesel – even if substantial coronavirus controls remain on travel and service sector businesses.

The prospective rise in processing and consequent draw down in crude inventories in the second and especially third quarters is what has been boosting futures prices and causing calendar spreads to tighten.

The oil market’s rapid evolution from a massive production surplus last year to deficit has been most evident in the United States, where reliable data on stocks is published weekly by the Energy Information Administration (EIA).

U.S. inventories of crude and products outside the strategic petroleum reserve amounted to 1,283 million barrels on March 5, which was just 12 million barrels or 1% above the previous five-year average.

Crude stocks were 29 million barrels or 6% above the five-year average, mostly as result of the disruption to refineries caused by cold weather and power failures in Texas last month.

Shell Oil Trading Profit Doubles to $2.6 Billion in 2020 - Bloomberg

Shell Oil Trading Profit Doubles to $2.6 Billion in 2020 - Bloomberg

Royal Dutch Shell Plc disclosed the profitability of its sprawling and secretive oil trading unit for the first time, saying it almost doubled to $2.6 billion.

The scale of the earnings show the importance of the business to the company in a year that weak demand and prices hit other parts of the business. Shell took advantage of wild price swings and a market situation that allowed it to make money by storing oil to sell it later for a profit.

The company’s oil-trading profit in 2020 beat the highest ever net income achieved by Vitol Group, the world’s largest independent trading house, which made a record $2.3 billion in 2019. Vitol has yet to disclose 2020 earnings.

Shell only disclosed earnings from oil trading in its annual report, and leaving power, natural gas and LNG trading out. Analysts suspect the company was able to make similar profits from those businesses.

The revelation in its annual report comes as the firm is embarking on an energy transition in which Shell has said it will lean on its trading prowess to push through less-profitable renewables.

Rival BP Plc made a similar disclosure last year when its Chief Executive Officer Bernard Looney revealed trading typically boosted returns by 2 percentage points a year, suggesting it makes annual profit of as much as much as $2.5 billion.

#Saudi banks to lead the sector’s post-pandemic recovery | ZAWYA MENA Edition

Saudi banks to lead the sector’s post-pandemic recovery | ZAWYA MENA Edition

The profitability of Saudi banks will surpass those of its GCC peers in 2021, despite low interest rates and the elevated cost of risk, according to Roman Rybalkin, associate director at S&P Global Ratings.

“After the shocks witnessed in 2020, the Saudi economy is expected to recover in 2021-2022 due to an increase in global demand for oil and increase of private consumption. By 2022, we expect the expiry of OPEC+ quotas and higher oil prices to boost economic activity to close to 3 percent,” he told Arab News.

While he believed that real gross domestic product (GDP) will not return to pre-pandemic levels until next year, he said the size of the economy, conservative regulation and lack of aggressive growth pre-2020 will help the Kingdom’s banking sector begin to return to normal over the next 12 to 24 months.

Last year, the Kingdom’s banking sector witnessed increased credit growth, on the back of stronger mortgage and small loan lending, and Rybalkin has forecast that this trend will remain strong into 2021-2022.

Brent crude eases, but stays near $70 as demand optimism lends support | Reuters

Brent crude eases, but stays near $70 as demand optimism lends support | Reuters

Brent crude prices eased on Friday but hovered near $70 a barrel as production cuts by major oil producers constrained supply, with optimism about a recovery in demand for the resource in the second half of the year also lending support.

Brent crude futures for May slipped 33 cents, or 0.5%, to $69.30 a barrel by 0749 GMT while U.S. West Texas Intermediate crude for April was at $65.65 a barrel, down 37 cents, or 0.6%.

After seven straight weeks of gains, front-month Brent could close this week little changed as investors took profit after prices touched a 13-month high on Monday following attacks on Saudi Arabian oil facilities.

Sentiment was also buoyed by the decision of the Organization of Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, earlier this month to largely hold production cuts in April.

Investors have been pumping funds into commodities such as oil on expectations of a demand recovery in the second half of the year as the global economy grows, while a wider rollout of vaccines against the COVID-19 pandemic allows more people to travel this summer.