Oil prices rise over 2% as U.S. inventories decline | Reuters
Oil prices rose for a second day on Friday as the market reacted to falling U.S. inventories, and signs of strong Asian demand from both China and India added support.
Brent crude oil futures were up $1.43, 1.93%, at $75.55. U.S. West Texas Intermediate futures were up $1.62, or 2.2%, at $74.56.
"The market is coming to grips with the historic drop in U.S. oil inventories, and dimmed prospects of Iranian oil returning to the market," said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Still, prices on both sides of the Atlantic ended the week little changed, despite significant daily fluctuations. Prices were weighed down early in the week by the collapse of output talks between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+. read more
U.S. crude and gasoline stocks fell and gasoline demand reached its highest since 2019, the U.S. Energy Information Administration said on Thursday, signalling increasing strength in the economy. read more
"A bullish EIA stock report helped the oil market rebound into the black," said Stephen Brennock of oil broker PVM.
Friday, 9 July 2021
The growing Gulf rivalry that's pushing up oil prices - BBC News #SaudiArabia #UAE
The growing Gulf rivalry that's pushing up oil prices - BBC News
A bitter public rift between the United Arab Emirates and Saudi Arabia over oil production quotas this week caused talks between the world's biggest oil-producing nations to be abandoned and left energy markets in limbo, pushing oil prices to a six-year high.
The 23 nations in Opec+, which comprises the Organization of the Petroleum Exporting Countries cartel and allied producers like Russia, had to postpone their negotiations indefinitely, raising fears about its stability of a group that has deftly handled supplies over the past 18 months to cope with the coronavirus-related global economic crisis.
The problem began last week, when the UAE rejected a proposal by Opec+ leaders Saudi Arabia and Russia to extend output curbs for another eight months.
OPEC and its allies are yet to set a date for their next meeting on oil production quotas
The UAE wanted to renegotiate its current baseline - the level from which production cuts or increases are calculated - to give it freedom to pump out more oil. However, Saudi Arabia and Russia were against doing so.
The negotiations took an unusual turn when the energy ministers of the UAE and Saudi Arabia, which are close allies, went public with their differences.
"The rift has come as a surprise, but perhaps the tussle was inevitable," says Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington.
"Abu Dhabi's production capacity is at odds with its Opec quota. It has invested a lot of money to raise its production. And now demand is picking up. That's why the UAE has been frustrated over the last year at its inability to increase production," he adds.
A bitter public rift between the United Arab Emirates and Saudi Arabia over oil production quotas this week caused talks between the world's biggest oil-producing nations to be abandoned and left energy markets in limbo, pushing oil prices to a six-year high.
The 23 nations in Opec+, which comprises the Organization of the Petroleum Exporting Countries cartel and allied producers like Russia, had to postpone their negotiations indefinitely, raising fears about its stability of a group that has deftly handled supplies over the past 18 months to cope with the coronavirus-related global economic crisis.
The problem began last week, when the UAE rejected a proposal by Opec+ leaders Saudi Arabia and Russia to extend output curbs for another eight months.
OPEC and its allies are yet to set a date for their next meeting on oil production quotas
The UAE wanted to renegotiate its current baseline - the level from which production cuts or increases are calculated - to give it freedom to pump out more oil. However, Saudi Arabia and Russia were against doing so.
The negotiations took an unusual turn when the energy ministers of the UAE and Saudi Arabia, which are close allies, went public with their differences.
"The rift has come as a surprise, but perhaps the tussle was inevitable," says Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington.
"Abu Dhabi's production capacity is at odds with its Opec quota. It has invested a lot of money to raise its production. And now demand is picking up. That's why the UAE has been frustrated over the last year at its inability to increase production," he adds.
IMF Urges #SaudiArabia to Boost Welfare While Tackling Wage Bill - Bloomberg
IMF Urges Saudi Arabia to Boost Welfare While Tackling Wage Bill - Bloomberg
The International Monetary Fund has urged Saudi Arabia to push ahead with measures to cut the government wage and subsidy spending, while also taking steps to protect the welfare of low-income households.
The Washington-based lender “supported the authorities’ planned medium-term fiscal consolidation but emphasized the need to continue enhancing the social safety net in the near term to support low-income households,” according to a statement issued Thursday after its regular Article IV consultation with the government.
The IMF also revised its economic growth projection for the kingdom to 2.4% from 2.1% earlier, as it gradually recovers from last year’s downturn. The oil-sector economy is expected to contract 0.4% as production is set to remain in line with the OPEC+ agreement, while non-oil growth is seen at 4.3%, an upward revision from 3.9% in May.
“The economy is recovering well,” according to the fund, but “while central government fiscal consolidation will be a drag on growth, it is expected to be offset by higher Public Investment Fund investment and strong private demand.”
The International Monetary Fund has urged Saudi Arabia to push ahead with measures to cut the government wage and subsidy spending, while also taking steps to protect the welfare of low-income households.
The Washington-based lender “supported the authorities’ planned medium-term fiscal consolidation but emphasized the need to continue enhancing the social safety net in the near term to support low-income households,” according to a statement issued Thursday after its regular Article IV consultation with the government.
The IMF also revised its economic growth projection for the kingdom to 2.4% from 2.1% earlier, as it gradually recovers from last year’s downturn. The oil-sector economy is expected to contract 0.4% as production is set to remain in line with the OPEC+ agreement, while non-oil growth is seen at 4.3%, an upward revision from 3.9% in May.
“The economy is recovering well,” according to the fund, but “while central government fiscal consolidation will be a drag on growth, it is expected to be offset by higher Public Investment Fund investment and strong private demand.”
Mubadala’s Satellite Group Yahsat IPO Raises $731 Million - Bloomberg
Mubadala’s Satellite Group Yahsat IPO Raises $731 Million - Bloomberg
Abu Dhabi sovereign fund Mubadala Investment Co. has raised 2.7 billion dirhams ($731 million) in an initial public offering of satellite operator Yahsat after pricing shares near the middle of a marketed range.
A subsidiary of the fund sold 975.9 million shares in Yahsat, which trades under the name Al Yah Satellite Communications Co., for 2.75 dirhams each, according to a statement Friday, after marketing them for between 2.55 dirhams and 3.05 dirhams each.
The share sale is the second largest on record in Abu Dhabi, after Abu Dhabi National Oil Co. for Distribution PJSC raised $850.8 million in a 2017 offering, according to data compiled by Bloomberg. It is also the first IPO in Abu Dhabi since that listing.
The IPO gives Yahsat a market value of about 6.7 billion dirhams, according to the statement. Yahsat will remain majority owned by Mubadala after the listing.
The offering was multiple times oversubscribed and attracted interest from “high quality, global institutional investors allowing for increased foreign direct investment into the UAE,” according to the statement. The Emirates Investment Authority subscribed to 5% of the final offer size.
Sovereign funds ADQ and Mubadala -- alongside the emirate’s state oil company -- have signaled their intentions to list more assets locally.
“This IPO paves the way for further interest and investment in similar, future transactions,” the company said.
First Abu Dhabi Bank PJSC, Bank of America Corp. and Morgan Stanley led the offering, while Abu Dhabi Commercial Bank PJSC, EFG-Hermes Holding Co. and HSBC Holdings Plc were the joint bookrunners. The shares are set to begin trading on July 14.
Abu Dhabi sovereign fund Mubadala Investment Co. has raised 2.7 billion dirhams ($731 million) in an initial public offering of satellite operator Yahsat after pricing shares near the middle of a marketed range.
A subsidiary of the fund sold 975.9 million shares in Yahsat, which trades under the name Al Yah Satellite Communications Co., for 2.75 dirhams each, according to a statement Friday, after marketing them for between 2.55 dirhams and 3.05 dirhams each.
The share sale is the second largest on record in Abu Dhabi, after Abu Dhabi National Oil Co. for Distribution PJSC raised $850.8 million in a 2017 offering, according to data compiled by Bloomberg. It is also the first IPO in Abu Dhabi since that listing.
The IPO gives Yahsat a market value of about 6.7 billion dirhams, according to the statement. Yahsat will remain majority owned by Mubadala after the listing.
The offering was multiple times oversubscribed and attracted interest from “high quality, global institutional investors allowing for increased foreign direct investment into the UAE,” according to the statement. The Emirates Investment Authority subscribed to 5% of the final offer size.
Sovereign funds ADQ and Mubadala -- alongside the emirate’s state oil company -- have signaled their intentions to list more assets locally.
“This IPO paves the way for further interest and investment in similar, future transactions,” the company said.
First Abu Dhabi Bank PJSC, Bank of America Corp. and Morgan Stanley led the offering, while Abu Dhabi Commercial Bank PJSC, EFG-Hermes Holding Co. and HSBC Holdings Plc were the joint bookrunners. The shares are set to begin trading on July 14.
Oil climbs on U.S. inventories draw; OPEC+ impasse caps gains | Reuters
Oil climbs on U.S. inventories draw; OPEC+ impasse caps gains | Reuters
Oil prices rose for a second day on Friday as data showed a draw in U.S. inventories, but were headed for a weekly loss amid uncertainty about global supplies fuelled by an OPEC+ impasse.
Brent crude oil futures were up 27 cents, or 0.4%, at $74.39 a barrel by 0644 GMT. U.S. West Texas Intermediate futures were up 39 cents, or 0.5%, at $73.33 a barrel.
Prices on both sides of the Atlantic were on track for a weekly loss of more than 2%, dragged by the collapse of output talks between the Organization of the Petroleum Exporting Countries and allies including Russia, or OPEC+. read more
"The drop in stockpiles reinforced views that demand was picking up as the U.S. driving season has begun," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Oil prices rose for a second day on Friday as data showed a draw in U.S. inventories, but were headed for a weekly loss amid uncertainty about global supplies fuelled by an OPEC+ impasse.
Brent crude oil futures were up 27 cents, or 0.4%, at $74.39 a barrel by 0644 GMT. U.S. West Texas Intermediate futures were up 39 cents, or 0.5%, at $73.33 a barrel.
Prices on both sides of the Atlantic were on track for a weekly loss of more than 2%, dragged by the collapse of output talks between the Organization of the Petroleum Exporting Countries and allies including Russia, or OPEC+. read more
"The drop in stockpiles reinforced views that demand was picking up as the U.S. driving season has begun," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.