Oil Prices Extend Relief Rally With Omicron Concerns Subsiding - Bloomberg

Oil Prices Extend Relief Rally With Omicron Concerns Subsiding - Bloomberg

PRICES

• West Texas Intermediate for January delivery climbed $2.56 to settle at $72.05 a barrel in New York.
• Brent for February settlement rose $2.36 to end the session at $75.44 a barrel.
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Aramco pipeline is net win for BlackRock and #Saudi | Reuters

Aramco pipeline is net win for BlackRock and Saudi | Reuters

Saudi Aramco (2222.SE) has handed both Larry Fink and Mohammed bin Salman a win. The BlackRock (BLK.N) chief executive is part of a group that on Monday announced it was paying $15.5 billion for 49% of a 20-year lease over the oil giant’s gas pipeline network, ultimately controlled by Saudi Arabia’s crown prince. Both leaders gain more than they lose.

The transaction looks identical to last year’s sale by Abu Dhabi National Oil Company of a minority stake in a lease over its gas transmission network to Global Infrastructure Partners and chums. The ADNOC deal implied a $20.7 billion value for 982 kilometres of pipelines. Aramco’s larger 5,000-kilometre network is valued at $31.6 billion. In both cases the state owner retains a majority stake and pays an undisclosed annual tariff to the gas network. Meanwhile, minority investors borrow 80% of the amount they’re putting up, juicing annualised returns on their equity comfortably beyond 10%.

That’s not bad for what looks like a relatively low-risk bet. After all, Saudi Arabia is unlikely to turn off gas supplies to its domestic customers, and Aramco’s majority shareholding discourages it from messing with the tariffs. This raises the question of why MbS didn’t leverage up the assets himself while keeping full control. The answer is that his strategy to pivot the kingdom away from fossil fuels envisages foreign direct investment reaching 6% of Saudi’s GDP, far above current levels. An endorsement from BlackRock, the world’s largest asset manager, is key to encouraging others.

The calculus for Fink is similarly nuanced. It’s only three years since Saudi agents murdered Jamal Khashoggi in an operation U.S. intelligence agencies say MbS approved. And investing alongside the world’s biggest oil company is potentially perilous for Fink, whose annual letters have implored investors to take climate change seriously.

That said, BlackRock’s western financial peers are doing business with Saudi despite Khashoggi. Fink recently wrote that slashing fossil fuel supply without addressing demand was driving up energy costs. Positioning himself as a champion of gas both as a transition fuel and a forerunner to hydrogen is logical. The involvement of other international investors means BlackRock’s equity check is probably less than $1 billion, manageable for a firm which oversees $9 trillion. If Fink encounters any private criticism, he can always console himself with the investment’s attractive returns.

Oil Prices Extend Relief Rally With Omicron Concerns Subsiding - Bloomberg

Oil Prices Extend Relief Rally With Omicron Concerns Subsiding - Bloomberg

Oil extended gains on optimism that the omicron virus variant may not be as severe as feared, easing concern over the demand outlook.

West Texas Intermediate traded near $72 a barrel, while the global benchmark Brent hovered around $75, as equity markets rallied. Initial data indicates that the surge in omicron cases hasn’t overwhelmed hospital so far, and mobility statistics show little evidence of a significant hit to global oil consumption so far.

“While there is probably going to be some demand destruction because of omicron, the market priced in a lot worse than what it’s going to be,” said Phil Flynn, senior market analyst at Price Futures Group Inc. “We are getting back to more real fundamentals versus the fear fundamentals we were trading on last week.”

Some oil analysts saw oil’s plunge in recent weeks as driven by low liquidity and so-called negative gamma effects, where options traders are forced to sell futures contracts to hedge their risk. When prices rise, like they have in recent days, those traders often buy back the futures they sold, further fueling the rebound.

#Qatar approves $56.13 bln budget for 2022 | Reuters

Qatar approves $56.13 bln budget for 2022 | Reuters

Qatar said on Tuesday it expects to spend 204.3 billion riyals ($56.13 billion) in its 2022 budget and run a deficit of 8.3 billion riyals.

The Gulf Arab country sees revenues of 196 billion riyals next year, based on an average oil price of $55 per barrel, up from $40 in 2021, the state news agency said.

#Dubai says to list business park operator TECOM | Reuters

Dubai says to list business park operator TECOM | Reuters

Dubai is planning an initial public offering of business park operator TECOM Group on the local stock exchange, the emirate's Media Office reported on Tuesday.

The listing is part of plans to increase the size of the Dubai Financial Market to 3 trillion dirhams ($816.84 billion).

Formerly known as TECOM Investments, TECOM Group, which is a part of Dubai Holding, says it has a portfolio of 10 business parks where around 6,500 businesses employ a total workforce of 95,000.

The Dubai government last month announced plans to list 10 state-backed companies on its stock market as part of plans to boost activity on the local bourse. It also said it plans to set up a 2 billion dirham market maker fund to encourage more private companies to list.

A spate of de-listings and an absence of big initial public offerings have put Dubai's stock market under pressure, raising questions over the future of one of the Gulf's major exchanges, launched two decades ago.

Most Gulf shares rise as Omicron fears ease | Reuters

Most Gulf shares rise as Omicron fears ease | Reuters

Most stock markets in the Gulf ended higher on Tuesday, as worries about the impact of the Omicron coronavirus variant eased, with the Dubai index outperforming the region.

A health official in South Africa reported over the weekend that Omicron cases in the country had only shown mild symptoms, while Dr. Anthony Fauci — the top U.S. infectious disease expert — told CNN that "it does not look like there's a great degree of severity" so far. read more

Saudi Arabia's benchmark index (.TASI) finished 0.8% higher, with Al Rajhi Bank (1120.SE) adding 1.5%, while petrochemical maker Saudi Basic Industries Corp (SABIC) (2010.SE) gained 1.1%.

Omani state energy company OQ signed a memorandum of understanding (MoU) on Monday with SABIC on developing Oman's Duqm petrochemical complex project. read more

Omani and Saudi firms signed 13 MoUs valued at $30 billion, the Saudi state news agency (SPA) reported on Tuesday. read more

The agreements were announced amid an official visit by the Saudi crown prince, who started a Gulf tour on Monday before a Gulf summit this month. read more

Dubai's main share index (.DFMGI) advanced 1%, outperforming the region, buoyed by a 2.5% leap in blue-chip developer Emaar Properties (EMAR.DU).

Dubai stocks continue moving up as an optimistic sentiment takes over and Omicron fears subside, said Farah Mourad, senior market analyst of XTB MENA.

"The market remains supported by favorable expectations among investors as they expect the announced initial public offerings to drive volumes and liquidity higher. The market is also benefitting from the positive developments in non-oil sectors."

Meanwhile, Dubai house prices will extend their rise into the next year at twice the rate expected three months ago, driven by demand from foreign investors and improving affordability, according to a Reuters poll of property analysts. read more

In Abu Dhabi, the index (.ADI) fell 0.2%, retreating from a record high, with Abu Dhabi Commercial Bank (ADCB.AD) dropping 2.6%.

The Qatari benchmark (.QSI) added 0.4%, ending two sessions of losses, led by a 1.4% gain in Qatar Islamic Bank (QISB.QA).

Outside the Gulf, Egypt's blue-chip index (.EGX30) edged 0.2% higher, helped by a 1.4% increase in top lender Commercial International Bank (COMI.CA).

Oil rises on easing Omicron fears and #Iran delay | Reuters

Oil rises on easing Omicron fears and Iran delay | Reuters

Oil prices rose nearly $2 on Tuesday, extending the previous day's almost 5% rebound as concerns over the impact of the Omicron coronavirus variant on global fuel demand eased and Iran nuclear talks stalled, delaying the return of Iranian crude.

Brent crude futures were up $1.67, or 2.3%, at $75.75 a barrel by 1323 GMT, having registered a 4.6% gain on Monday. U.S. West Texas Intermediate crude was up $1.90, or 2.7%, at $71.39, building on a 4.9% gain in the previous session.

Oil prices were pummelled last week by concerns that vaccines might be less effective against the Omicron variant, sparking fears that governments could impose fresh restrictions to curb its spread and hit global growth and oil demand.

However, a South African health official reported over the weekend that Omicron cases there had shown only mild symptoms. Also, the top U.S. infectious disease official, Anthony Fauci, told CNN that "it does not look like there's a great degree of severity" so far. read more

#UAE weekend shift to leave flexibility to private sector, minister says | Reuters

UAE weekend shift to leave flexibility to private sector, minister says | Reuters

Private companies in the United Arab Emirates will have flexibility to choose their working week, a UAE minister said, after the announcement of a new a working week of four and half days with a Saturday-Sunday weekend from the start of next year.

“Each company, depending on the sector they operate in and what suits and serves their business best, can choose the weekend they decide for their employee”, Minister of Human Resources and Emiratisation Abdulrahman al-Awar told Reuters.

The UAE central bank will shift to the newly announced working week and will likely issue detailed guidance to commercial banks on the new working hours, he said.

#UAE's ADNOC and India's Reliance to invest $2bln in chemicals JV | ZAWYA MENA Edition

UAE's ADNOC and India's Reliance to invest $2bln in chemicals JV | ZAWYA MENA Edition

Abu Dhabi Chemicals Derivatives Co., or TA’ZIZ, and India's Reliance Industries Ltd. (RIL), will launch a joint venture to construct and operate a chemicals production facility with an investment of over $2 billion.

The facility, which will produce chlor-alkali, ethylene dichloride and polyvinyl chloride, will be located at the TA’ZIZ Industrial Chemicals Zone, Ruwais, ADNOC said in a statement on Tuesday.

TA’ZIZ is a joint venture between Abu Dhabi National Oil Co., and sovereign wealth fund, ADQ.

This is the first investment in the MENA region by the Indian oil-to-telecoms conglomerate.

BlackRock-Led Group Wins $15.5 Billion #Saudi Aramco Pipeline Deal - Bloomberg

BlackRock-Led Group Wins $15.5 Billion Saudi Aramco Pipeline Deal - Bloomberg

A group co-led by BlackRock Inc. will invest $15.5 billion in Saudi Arabia’s natural-gas pipelines as the kingdom opens up more to foreign companies and looks to fund a huge increase in fossil-fuel production.

The consortium will buy a 49% stake in a new entity that holds 20-year leasing rights over pipelines carrying Saudi Aramco’s gas across the country. Hassana Investment Co., controlled by the Saudi government’s pension fund, will head the group alongside BlackRock Real Assets.

The deal, announced by Aramco on Monday, is part of Saudi Arabia’s drive to sell assets and use the money to fund new industries from artificial intelligence to electric vehicles, while also increasing output of both oil and gas. In a similarly-structured transaction in April, Aramco sold a $12.4 billion stake related to its oil pipelines to investors including Washington-based EIG.

Bloomberg reported last month that BlackRock was among the firms that bid for the gas pipelines. Others included EIG, Italian infrastructure firm Snam SpA and China’s state-backed Silk Road Fund Co.

#UAE Weekend Will Be on Saturday and Sunday From 2022 - Bloomberg video

UAE Weekend Will Be on Saturday and Sunday From 2022 - Bloomberg

The United Arab Emirates will switch its weekend to Saturday and Sunday for government entities as it looks to bring itself more in line with the rest of the world. The Gulf nation, of which Abu Dhabi and Dubai are a part, will adopt a 4-1/2 day working week with Friday -- a holy day in Islam -- becoming a half day. Abeer Abu Omar reports on "Bloomberg Markets: Europe."

Oil climbs more than 2% on easing Omicron fears, Iran delay | Reuters

Oil climbs more than 2% on easing Omicron fears, Iran delay | Reuters

Oil prices extended gains on Tuesday from a near 5% rebound the day before as concerns about the impact of the Omicron coronavirus variant on global fuel demand eased and Iran nuclear talks stalled, delaying the return of Iranian crude.

Brent crude futures were up $1.66, or 2.3%, at $74.74 a barrel by 1005 GMT, after settling 4.6% higher on Monday. U.S. West Texas Intermediate crude was at $71.30 a barrel, up $1.81, or 2.6%, building on a 4.9% gain in the previous session.

Oil prices were pummelled last week by concerns that vaccines might be less effective against Omicron, sparking fears that governments may re-impose restrictions to curb its spread and hit global growth and oil demand.

However, a South African health official reported over the weekend that Omicron cases there had only shown mild symptoms. Also, the top U.S. infectious disease official, Anthony Fauci, has told CNN "it does not look like there's a great degree of severity" so far. read more

#UAE non-oil private economy continues solid growth in November - PMI | Reuters

UAE non-oil private economy continues solid growth in November - PMI | Reuters

The United Arab Emirates' non-oil private sector notched its 12th consecutive month of growth in November, slightly outpacing the prior month, when it expanded at its fastest rate in more than two years, a survey showed on Tuesday.

The seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI), inched up to 55.9 in November from 55.7 in October, which was its highest since June 2019 - boosted by Dubai hosting the Expo world fair.

The continued improvement in business conditions is a marked turn from last year, when the UAE's PMI recorded just four months of expansion as the pandemic pummelled tourism, aviation and other key sectors of the economy.

"The upturn was supported by marked expansions in output and new business volumes midway through the fourth quarter," IHS said in the PMI report.

#UAE Switches Weekend to Saturday-Sunday From Next Year - Bloomberg

UAE Switches Weekend to Saturday-Sunday From Next Year - Bloomberg

The United Arab Emirates will switch its weekend to Saturday and Sunday for government entities as it looks to bring itself more in line with the rest of the world.

The government said it will adopt a 4-1/2 day working week, with Friday -- a holy day in Islam -- being a half day, from Jan. 1. The UAE and the rest of the Gulf Arab nations, including Saudi Arabia, currently have a Sunday-Thursday working week. There were no further details on how the plan will affect the country’s private sector.

The Gulf nation, of which Abu Dhabi and Dubai are a part, has taken several steps recently to open up its economy, including selling stakes in state-controlled companies. The stock markets have also rolled out initiatives to boost liquidity and attract foreign investors.

“This will align the UAE with global markets and make it easier for international corporations to do business,” said Nabil Alyousuf, chief executive officer of Dubai-based International Advisory Group. “This will increase the number of days we do business with the rest of the world, which will boost trade.”

#Dubai leads major Gulf bourses higher as Omicron fears ease | Reuters

Dubai leads major Gulf bourses higher as Omicron fears ease | Reuters

Most stock markets in the Gulf rose in early trade on Tuesday, on receding worries about the impact of the Omicron coronavirus variant, with the Dubai index outperforming the region.

A health official in South Africa reported over the weekend that Omicron cases in the country had only shown mild symptoms, while Dr. Anthony Fauci — the top U.S. infectious disease expert — told CNN that "it does not look like there's a great degree of severity" so far. read more

Saudi Arabia's benchmark index (.TASI) gained 1%, with Al Rajhi Bank (1120.SE) rising 1.3%, while petrochemical maker Saudi Basic Industries Corp (SABIC) (2010.SE) climbed 1.8%.

Omani state energy company OQ signed a memorandum of understanding (MoU) on Monday with SABIC on developing Oman's Duqm petrochemical complex project. read more

Omani and Saudi firms signed 13 MoUs valued at $30 billion, the Saudi state news agency (SPA) reported on Tuesday. read more

The agreements were announced amid an official visit by the Saudi crown prince, who started a Gulf tour on Monday before a Gulf summit this month. read more

Elsewhere, oil behemoth Saudi Aramco (2222.SE) added 0.6%, a day after it signed a $15.5 billion lease-and-leaseback deal for its gas pipeline network with a consortium led by BlackRock Real Assets and state-backed Hassana Investment Co. read more

Dubai's main share index (.DFMGI) advanced 1.3%, boosted by a 1.9% rise in blue-chip developer Emaar Properties (EMAR.DU).

Dubai house prices will extend their rise into the next year at twice the rate expected three months ago, driven by demand from foreign investors and improving affordability, according to a Reuters poll of property analysts. read more

In Abu Dhabi, the index (.ADI) rose 0.5%, reaching a record high, with the country's largest lender First Abu Dhabi Bank (FAB.AD) climbing 1.7%.

The Qatari benchmark (.QSI) was up 0.5%, on course to end two sessions of losses.

Oil Extends Gains Above $70 on Signs Omicron Concerns Overdone - Bloomberg

Oil Extends Gains Above $70 on Signs Omicron Concerns Overdone - Bloomberg

PRICES
West Texas Intermediate for January climbed 1.7% to $70.69 a barrel at 7:35 a.m. London time on the New York Mercantile Exchange after advancing 4.9% on Monday. Brent for February settlement rose 1.6% to $74.21 on the ICE Futures Europe exchange after surging 4.6% on Monday. The prompt timespread for Brent was 40 cents in backwardation, compared with $1.34 at the start of last month.