Oil falls from seven-year high as Russia tensions offset Fed tightening | Reuters
Oil prices fell on Thursday after Brent crude hit a seven-year high above $90 a barrel, as the market balanced concerns about tight worldwide supply with expectations the U.S. Federal Reserve will soon tighten monetary policy.
Global benchmark Brent fell 62 cents to settle at $89.34 a barrel, while U.S. crude closed 74 cents lower at $86.61 a barrel in a volatile session with both contracts see-sawing between positive and negative territory.
Prices had surged on Wednesday, with Brent climbing above $90 a barrel for the first time in seven years amid tensions between Russia and the West. Threats to the United Arab Emirates from Yemen's Houthi movement had added to oil market jitters.
Russia, the world's second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears that energy supplies to Europe could be disrupted, although concerns are focused on gas supplies rather than crude.
Thursday, 27 January 2022
Aramco CEO says energy transition "not going smoothly" | Reuters
Aramco CEO says energy transition "not going smoothly" | Reuters
Saudi Aramco Chief Executive Amin Nasser said on Thursday that investment in oil and gas was needed to run alongside new energy investments until the latter can realistically support rising consumption.
"We all agree that to move towards a sustainable energy future a smooth energy transition is absolutely essential but we must also consider the complexities and challenges to get there," he told the B20 conference in Indonesia via video link.
"We have to acknowledge that the current transition is not going smoothly," he said.
Nasser has said Aramco aims to achieve net zero emissions from its operations by 2050 while also building hydrocarbon capacity and expanding its maximum sustained production capacity to 13 million barrels per day.
Saudi Aramco Chief Executive Amin Nasser said on Thursday that investment in oil and gas was needed to run alongside new energy investments until the latter can realistically support rising consumption.
"We all agree that to move towards a sustainable energy future a smooth energy transition is absolutely essential but we must also consider the complexities and challenges to get there," he told the B20 conference in Indonesia via video link.
"We have to acknowledge that the current transition is not going smoothly," he said.
Nasser has said Aramco aims to achieve net zero emissions from its operations by 2050 while also building hydrocarbon capacity and expanding its maximum sustained production capacity to 13 million barrels per day.
Most Gulf bourses rebound on rising oil prices | Reuters
Most Gulf bourses rebound on rising oil prices | Reuters
Most major stock markets in the Gulf rebounded on Thursday, as oil prices touched seven-year highs on fears of disruption to energy supplies due to escalating tensions between Russia and Ukraine.
Brent crude furtures were up 89 cents, or 1%, at $90.85 a barrel by 1217 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 87 cents, or 1%, at $88.22.
Crude prices are a key catalyst for the Gulf's financial markets.
Dubai's main share index (.DFMGI) gained 0.5%, helped by a 1.5% jump in Emirates NBD Bank (ENBD.DU), after the top regional lender reported a 34% rise in annual profit on Wednesday. read more
Shares in Dubai, however, might experience more corrections like they did earlier this month in the absence of a clear catalyst and global risk appetite souring on a hawkish U.S. Federal Reserve, said Farah Mourad, a senior market analyst at XTB MENA.
Abu Dhabi's index (.FTFADGI) edged up 0.2%, after falling as much as 1.6% during the session. Heavyweight First Abu Dhabi Bank (FAB.AD) pulled back from a 4% fall to close flat.
The bank proposed a lower dividend this year, but its full-year net profit rose about 19% to 12.53 billion dirhams ($3.41 billion).
"Its proposed dividend of 0.70 dirhams per share was lower than the 0.74 dirhams paid out in 2020," an analyst said.
The Qatar index (.QSI) ended 0.2% higher. Qatar Islamic Bank (QISB.QA) added 1%, while Industries Qatar (IQCD.QA) rose 0.7%.
Saudi Arabia's benchmark index (.TASI) ended flat in a volatile session. Al Rajhi Bank (1120.SE) fell 0.7%, while Saudi National Bank (1180.SE) gained 1.4%.
Most major stock markets in the Gulf rebounded on Thursday, as oil prices touched seven-year highs on fears of disruption to energy supplies due to escalating tensions between Russia and Ukraine.
Brent crude furtures were up 89 cents, or 1%, at $90.85 a barrel by 1217 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 87 cents, or 1%, at $88.22.
Crude prices are a key catalyst for the Gulf's financial markets.
Dubai's main share index (.DFMGI) gained 0.5%, helped by a 1.5% jump in Emirates NBD Bank (ENBD.DU), after the top regional lender reported a 34% rise in annual profit on Wednesday. read more
Shares in Dubai, however, might experience more corrections like they did earlier this month in the absence of a clear catalyst and global risk appetite souring on a hawkish U.S. Federal Reserve, said Farah Mourad, a senior market analyst at XTB MENA.
Abu Dhabi's index (.FTFADGI) edged up 0.2%, after falling as much as 1.6% during the session. Heavyweight First Abu Dhabi Bank (FAB.AD) pulled back from a 4% fall to close flat.
The bank proposed a lower dividend this year, but its full-year net profit rose about 19% to 12.53 billion dirhams ($3.41 billion).
"Its proposed dividend of 0.70 dirhams per share was lower than the 0.74 dirhams paid out in 2020," an analyst said.
The Qatar index (.QSI) ended 0.2% higher. Qatar Islamic Bank (QISB.QA) added 1%, while Industries Qatar (IQCD.QA) rose 0.7%.
Saudi Arabia's benchmark index (.TASI) ended flat in a volatile session. Al Rajhi Bank (1120.SE) fell 0.7%, while Saudi National Bank (1180.SE) gained 1.4%.
Analysis: Oil market faces rocky road as shock absorbers wear thin | Reuters
Analysis: Oil market faces rocky road as shock absorbers wear thin | Reuters
An increase in oil output by producer nations cashing in on expensive crude has depleted the cushion of spare capacity that protects the market from sudden shocks and raised the risk of price spikes or even fuel shortages.
Some analysts have said that by the middle of the year unused capacity could be as depleted as in 2008 when international oil futures hit their all-time record above $147 a barrel.
Typically, the biggest producers, including Saudi Arabia and the United Arab Emirates, have capacity that they can draw on relatively quickly to add extra oil and calm price volatility should war or a natural disaster cause a sudden drop in supply.
Without that flexibility, consumers could be exposed to price shocks and fuel shortages.
Some analysts have said that by the middle of the year unused capacity could be as depleted as in 2008 when international oil futures hit their all-time record above $147 a barrel.
Typically, the biggest producers, including Saudi Arabia and the United Arab Emirates, have capacity that they can draw on relatively quickly to add extra oil and calm price volatility should war or a natural disaster cause a sudden drop in supply.
Without that flexibility, consumers could be exposed to price shocks and fuel shortages.
#Kuwait Rating Cut at Fitch on Continuing Political Constraints - Bloomberg @ShajiShaji1
Kuwait Rating Cut at Fitch on Continuing Political Constraints - Bloomberg
Kuwait was downgraded by Fitch Ratings, which cited ongoing political constraints on decision-making in the oil-rich nation.
The credit rating was cut one level to AA-, the fourth-highest investment-grade level at Fitch, according to a statement on Thursday. Constraints on decision-making has hindered “addressing structural challenges related to heavy oil dependence, a generous welfare state and a large public sector,” Fitch said.
Years of political tensions have stymied efforts to diversify the economy of Kuwait, home to about 8.5% of the world’s oil reserves, and promote foreign investment. The government has been unable to borrow since its debut Eurobond in 2017, forcing it to rely on its General Reserve Fund instead.
“There has been a lack of meaningful underlying fiscal adjustment to recent oil-price shocks and the outlook for reforms remains weak, despite some positive political developments as part of a national dialogue,” Fitch said.
Kuwait was downgraded by Fitch Ratings, which cited ongoing political constraints on decision-making in the oil-rich nation.
The credit rating was cut one level to AA-, the fourth-highest investment-grade level at Fitch, according to a statement on Thursday. Constraints on decision-making has hindered “addressing structural challenges related to heavy oil dependence, a generous welfare state and a large public sector,” Fitch said.
Years of political tensions have stymied efforts to diversify the economy of Kuwait, home to about 8.5% of the world’s oil reserves, and promote foreign investment. The government has been unable to borrow since its debut Eurobond in 2017, forcing it to rely on its General Reserve Fund instead.
“There has been a lack of meaningful underlying fiscal adjustment to recent oil-price shocks and the outlook for reforms remains weak, despite some positive political developments as part of a national dialogue,” Fitch said.
#Oman Vows to Extend Economic Reforms as Its Finances Stabilize - Bloomberg @ZainabFattah
Oman Vows to Extend Economic Reforms as Its Finances Stabilize - Bloomberg
Oman is set to extend an economic overhaul that has helped to stabilize the finances of the weakest Gulf state, according to its foreign minister.
“Our fiscal position is now sound and improving,” Sayyid Badr bin Hamad Albusaidi said in a podcast hosted by Al-Monitor. “This gives us really a solid foundation to make real progress toward some of the perhaps ambitious economic goals we have set for ourselves in the vision,” he said, referring to Vision 2040, an economic blueprint.
Since taking power in January 2020, Sultan Haitham bin Tariq has moved to balance Oman’s finances and prepare it for a time after oil. The effort included cutting subsidies, introducing a value-added tax and even planning for income tax -- which would be a first for a Gulf Arab state.
Oman’s cost-cutting steps along with a rally in oil prices helped the sultanate return to global debt markets. Some rating agencies have raised their outlook for the country.
Future reforms will look at subsidies, public-sector employment and the provision of safety nets, while “developing ways for those who enjoy the privileges of relative wealth to make an appropriate contribution to the common good,” the foreign minister said.
A “renewed emphasis on inclusion will contribute to making Oman an even more attractive and more desirable location for foreign business and investments,” he said.
Oman is set to extend an economic overhaul that has helped to stabilize the finances of the weakest Gulf state, according to its foreign minister.
“Our fiscal position is now sound and improving,” Sayyid Badr bin Hamad Albusaidi said in a podcast hosted by Al-Monitor. “This gives us really a solid foundation to make real progress toward some of the perhaps ambitious economic goals we have set for ourselves in the vision,” he said, referring to Vision 2040, an economic blueprint.
Since taking power in January 2020, Sultan Haitham bin Tariq has moved to balance Oman’s finances and prepare it for a time after oil. The effort included cutting subsidies, introducing a value-added tax and even planning for income tax -- which would be a first for a Gulf Arab state.
Oman’s cost-cutting steps along with a rally in oil prices helped the sultanate return to global debt markets. Some rating agencies have raised their outlook for the country.
Future reforms will look at subsidies, public-sector employment and the provision of safety nets, while “developing ways for those who enjoy the privileges of relative wealth to make an appropriate contribution to the common good,” the foreign minister said.
A “renewed emphasis on inclusion will contribute to making Oman an even more attractive and more desirable location for foreign business and investments,” he said.
Oil at seven-year high as Ukraine crisis overshadows Fed | Reuters
Oil at seven-year high as Ukraine crisis overshadows Fed | Reuters
Oil extended gains to seven-year highs above $90 a barrel on Thursday as the Ukraine crisis outweighed signs that the U.S. Federal Reserve will tighten monetary policy.
Brent crude futures were up 89 cents, or 1%, at $90.85 a barrel by 1217 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 87 cents, or 1%, at $88.22.
Crude prices had surged on Wednesday, with Brent climbing above $90 a barrel for the first time in seven years amid tensions between Russia and the West. Russia, the world's second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears of disruption of energy supplies to Europe. read more
Both contracts were lower in early trading after the U.S. Federal Reserve said on Wednesday that it is likely to raise interest rates in March and plans to end its bond purchases that month in its battle to tame inflation.
Oil extended gains to seven-year highs above $90 a barrel on Thursday as the Ukraine crisis outweighed signs that the U.S. Federal Reserve will tighten monetary policy.
Brent crude futures were up 89 cents, or 1%, at $90.85 a barrel by 1217 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 87 cents, or 1%, at $88.22.
Crude prices had surged on Wednesday, with Brent climbing above $90 a barrel for the first time in seven years amid tensions between Russia and the West. Russia, the world's second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears of disruption of energy supplies to Europe. read more
Both contracts were lower in early trading after the U.S. Federal Reserve said on Wednesday that it is likely to raise interest rates in March and plans to end its bond purchases that month in its battle to tame inflation.
Most Gulf markets fall in early trade; #Qatar rises | Reuters
Most Gulf markets fall in early trade; Qatar rises | Reuters
Major stock markets in the Gulf fell in early trade on Thursday, pressured by financial stocks as oil prices slipped following signs that the U.S. Federal Reserve will tighten monetary policy.
Brent crude LCOc1 futures were down 57 cents, or 0.9%, to $89.18 a barrel at 0440 GMT, after earlier falling by as much as 1.1% to $89. Brent climbed 2% on Wednesday.
Dubai's main share index (.DFMGI) fell 0.4%, pressured by a 0.7% decline in Dubai's largest lender, Emirates NBD Bank (ENBD.DU), and a 0.6% decrease in blue-chip developer Emaar properties (EMAR.DU).
Emirates NBD shares rose as much as 1.1% on Wednesday after reporting a 34% rise in annual profit as an improving economy boosted investment banking income, while impairments fell.
The Abu Dhabi index (.FTFADGI) fell 1.3%, dragged by a 3.7% dive in its largest lender, First Abu Dhabi Bank (FAB.AD). However, shares of FAB were up 9% year-to-date, reflecting investor expectations of an economic recovery and hope that rising interest rates would boost earnings.
FAB reported a net profit of 12.53 billion dirhams ($3.41 billion) last year, up about 19% from 10.55 billion dirhams in 2020. read more
In Qatar, the benchmark index (.QSI), however, bucking the trend, stocks edged up 0.2%, helped by Industrial stocks, as Industries Qatar (IQCD.QA) gained 0.8%.
Saudi Arabia's benchmark index (.TASI) was flat, with lender Riyad Bank losing 0.9%, while Saudi Kayan Petrochemical (2350.SE) was up 1.9% after posting a 185.7% rise in profit for the fourth quarter.
Major stock markets in the Gulf fell in early trade on Thursday, pressured by financial stocks as oil prices slipped following signs that the U.S. Federal Reserve will tighten monetary policy.
Brent crude LCOc1 futures were down 57 cents, or 0.9%, to $89.18 a barrel at 0440 GMT, after earlier falling by as much as 1.1% to $89. Brent climbed 2% on Wednesday.
Dubai's main share index (.DFMGI) fell 0.4%, pressured by a 0.7% decline in Dubai's largest lender, Emirates NBD Bank (ENBD.DU), and a 0.6% decrease in blue-chip developer Emaar properties (EMAR.DU).
Emirates NBD shares rose as much as 1.1% on Wednesday after reporting a 34% rise in annual profit as an improving economy boosted investment banking income, while impairments fell.
The Abu Dhabi index (.FTFADGI) fell 1.3%, dragged by a 3.7% dive in its largest lender, First Abu Dhabi Bank (FAB.AD). However, shares of FAB were up 9% year-to-date, reflecting investor expectations of an economic recovery and hope that rising interest rates would boost earnings.
FAB reported a net profit of 12.53 billion dirhams ($3.41 billion) last year, up about 19% from 10.55 billion dirhams in 2020. read more
In Qatar, the benchmark index (.QSI), however, bucking the trend, stocks edged up 0.2%, helped by Industrial stocks, as Industries Qatar (IQCD.QA) gained 0.8%.
Saudi Arabia's benchmark index (.TASI) was flat, with lender Riyad Bank losing 0.9%, while Saudi Kayan Petrochemical (2350.SE) was up 1.9% after posting a 185.7% rise in profit for the fourth quarter.
Abraaj’s Arif Naqvi Handed $136 Million Fine Over Firm’s Collapse - Bloomberg
Abraaj’s Arif Naqvi Handed $136 Million Fine Over Firm’s Collapse - Bloomberg
Arif Naqvi, the founder of defunct Abraaj Group, has been fined $135.6 million and banned from Dubai’s financial center for his role in the private equity firm’s 2019 collapse.
The Dubai Financial Services Authority also imposed a $1.15 million fine on Abraaj’s former Chief Operating Officer Waqar Siddique. Naqvi and Siddique disputed DFSA’s findings and have referred the decision notices to the Financial Markets Tribunal.
Naqvi “personally proposed, orchestrated, authorized, and executed actions that directly or indirectly misled and deceived the investors,” the regulator said.
Naqvi founded Dubai-based Abraaj in 2002 and built it to become one of the world’s most influential emerging-market investors. He was the face and personality of the group and was knowingly involved in misleading investors over the misuse of their funds through Cayman-registered Abraaj Investment Limited, DFSA said.
Arif Naqvi, the founder of defunct Abraaj Group, has been fined $135.6 million and banned from Dubai’s financial center for his role in the private equity firm’s 2019 collapse.
The Dubai Financial Services Authority also imposed a $1.15 million fine on Abraaj’s former Chief Operating Officer Waqar Siddique. Naqvi and Siddique disputed DFSA’s findings and have referred the decision notices to the Financial Markets Tribunal.
Naqvi “personally proposed, orchestrated, authorized, and executed actions that directly or indirectly misled and deceived the investors,” the regulator said.
Naqvi founded Dubai-based Abraaj in 2002 and built it to become one of the world’s most influential emerging-market investors. He was the face and personality of the group and was knowingly involved in misleading investors over the misuse of their funds through Cayman-registered Abraaj Investment Limited, DFSA said.
#UAE's biggest lender FAB posts record profit but shares fall | Reuters
UAE's biggest lender FAB posts record profit but shares fall | Reuters
First Abu Dhabi Bank (FAB.AD), the United Arab Emirates' biggest lender, posted a record net profit in 2021, fuelled by the country's economic recovery from the height of the COVID-19 pandemic.
Shares fell more than 3% however after the bank said it would pay a lower dividend this year than last, split for the first time into cash and shares.
Chief Executive Hana Al Rostamani said the investment banking business had had "an exceptional year". Earnings were helped by a 59% jump in non-interest income from a year earlier, driven by gains in investment banking and trading.
FAB reported a net profit of 12.53 billion dirhams ($3.41 billion) last year, up about 19% from 10.55 billion dirhams in 2020. According to Refinitiv Eikon data, the UAE lender was expected to report an annual net profit of 12 billion dirhams.
First Abu Dhabi Bank (FAB.AD), the United Arab Emirates' biggest lender, posted a record net profit in 2021, fuelled by the country's economic recovery from the height of the COVID-19 pandemic.
Shares fell more than 3% however after the bank said it would pay a lower dividend this year than last, split for the first time into cash and shares.
Chief Executive Hana Al Rostamani said the investment banking business had had "an exceptional year". Earnings were helped by a 59% jump in non-interest income from a year earlier, driven by gains in investment banking and trading.
FAB reported a net profit of 12.53 billion dirhams ($3.41 billion) last year, up about 19% from 10.55 billion dirhams in 2020. According to Refinitiv Eikon data, the UAE lender was expected to report an annual net profit of 12 billion dirhams.
#Dubai House Price Growth May Slow After 6-Year Losing Streak Ends - Bloomberg
Dubai House Price Growth May Slow After 6-Year Losing Streak Ends - Bloomberg
Price gains in Dubai’s residential property could moderate this year amid continued oversupply, after a surge in demand for larger homes helped end a six-year losing streak in 2021.
Residential prices rose 9.8% in 2021 on average, according to real estate consultancy Core. The increase was driven by single-family homes, known locally as villas, as people worked from home during the pandemic and sought out bigger houses.
Values for villas, which make up less than 20% of the city’s housing supply, surged 22% last year, Core said in a report on Thursday. That’s still about 16% lower than a 2014 high. Meanwhile, prices of apartments -- which make up the vast majority of housing supply in Dubai -- rose 7% in 2021, about 29% below a 2014 peak. Overall rents increased 6.7% from a year earlier.
Dubai’s nimble handling of the pandemic helped the city end a years-long property slump and pushed prices higher across most localities. The UAE had one of the world’s fastest vaccination rollouts and managed to keep cases in check for most of last year.
Still, oversupply has plagued the market for years, keeping price gains somewhat in check.
“We expect the price recovery to continue although at a slower pace as the market stabilizes and works through new supply especially in less established areas,” said Prathyusha Gurrapu, head of research and advisory at Core. “We also need to see how the market will do post Expo 2020.”
Out of 37,000 homes completed in 2021, only 16% were villas, according to Core. In 2022, 36,000 homes will be completed, a figure that Core describes as a conservative estimate.
“With the phasing of many projects due to the pandemic over the last two years, we expect a higher number of handovers this year,” the consultancy said. “Further revisions are expected on supply forecasts as developers continue to calibrate to ever-changing market conditions.”
Price gains in Dubai’s residential property could moderate this year amid continued oversupply, after a surge in demand for larger homes helped end a six-year losing streak in 2021.
Residential prices rose 9.8% in 2021 on average, according to real estate consultancy Core. The increase was driven by single-family homes, known locally as villas, as people worked from home during the pandemic and sought out bigger houses.
Values for villas, which make up less than 20% of the city’s housing supply, surged 22% last year, Core said in a report on Thursday. That’s still about 16% lower than a 2014 high. Meanwhile, prices of apartments -- which make up the vast majority of housing supply in Dubai -- rose 7% in 2021, about 29% below a 2014 peak. Overall rents increased 6.7% from a year earlier.
Dubai’s nimble handling of the pandemic helped the city end a years-long property slump and pushed prices higher across most localities. The UAE had one of the world’s fastest vaccination rollouts and managed to keep cases in check for most of last year.
Still, oversupply has plagued the market for years, keeping price gains somewhat in check.
“We expect the price recovery to continue although at a slower pace as the market stabilizes and works through new supply especially in less established areas,” said Prathyusha Gurrapu, head of research and advisory at Core. “We also need to see how the market will do post Expo 2020.”
Out of 37,000 homes completed in 2021, only 16% were villas, according to Core. In 2022, 36,000 homes will be completed, a figure that Core describes as a conservative estimate.
“With the phasing of many projects due to the pandemic over the last two years, we expect a higher number of handovers this year,” the consultancy said. “Further revisions are expected on supply forecasts as developers continue to calibrate to ever-changing market conditions.”
Oil falls as looming U.S. rate hikes spook investors | Reuters
Oil falls as looming U.S. rate hikes spook investors | Reuters
Oil prices fell on Thursday as the U.S. dollar strengthened following signs that the Federal Reserve will tighten monetary policy soon in the world's biggest oil user.
Futures pulled back amid a broader decline in financial markets after the Fed telegraphed a March interest rate increase and as the dollar climbed against its major peers. Dollar-denominated oil becomes more expensive for buyers using other currencies when the greenback gains. read more
Brent crude futures were down 31 cents, or 0.6%, to $89.44 a barrel at 0720 GMT, after earlier falling by as much as 1.1% to $89. Brent climbed 2% on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures were down 58 cents, or 0.6%, to $86.77 a barrel, after falling by as much as 1.2% to $86.34. WTI gained 2% in the previous session.
"It could be a strong U.S. dollar at play after the Federal Open Markets Committee signalled rates will rise," said Commonwealth Bank analyst Vivek Dhar.
Oil prices fell on Thursday as the U.S. dollar strengthened following signs that the Federal Reserve will tighten monetary policy soon in the world's biggest oil user.
Futures pulled back amid a broader decline in financial markets after the Fed telegraphed a March interest rate increase and as the dollar climbed against its major peers. Dollar-denominated oil becomes more expensive for buyers using other currencies when the greenback gains. read more
Brent crude futures were down 31 cents, or 0.6%, to $89.44 a barrel at 0720 GMT, after earlier falling by as much as 1.1% to $89. Brent climbed 2% on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures were down 58 cents, or 0.6%, to $86.77 a barrel, after falling by as much as 1.2% to $86.34. WTI gained 2% in the previous session.
"It could be a strong U.S. dollar at play after the Federal Open Markets Committee signalled rates will rise," said Commonwealth Bank analyst Vivek Dhar.