Oil News: Asian Buyers Binge on Cheap US Crude in Threat to Middle East - Bloomberg
Asian buyers have snapped up a huge volume of cheap US oil early in the latest trading cycle for spot physical barrels, raising the prospect of reduced demand for Middle Eastern crude.
South Korean and Indian oil refiners have so far purchased around 16-to-18 million barrels of US crude this month that will be mostly delivered during November, according to traders with knowledge of the matter. That’s double the amount acquired over the same period in July and just shy of the average monthly volume during the first five months of this year.
Saudi Arabia signaled confidence in the demand outlook earlier this month after it raised its crude prices for Asia to a record, despite futures and time spreads reflecting concerns over an economic slowdown. However, the kingdom priced some of its oil at lower-than-expected levels to remain competitive against arbitrage flows into the region, such as those from the US.
Offers for West Texas Intermediate Midland, a key US export grade to Asia, are less than an $8 a barrel premium to the Dubai benchmark for barrels scheduled to arrive in November, said traders who buy and sell those cargoes. That’s cheaper than comparable Murban crude, the flagship grade of the United Arab Emirates, when taking into account freight and logistics, they added.
An increase in Libyan output and an uncharacteristic dip in US gasoline demand during the peak driving season have added to the abundance in Atlantic Basin supply and weighed on prices. WTI last week slipped to a rare discount against Dubai crude, according to data compiled by Bloomberg. A key demand indicator for Middle Eastern oil -- Oman’s premium to Dubai swaps -- has also narrowed to the smallest gap since June.
There are still some concerns about the outlook after profit margins for making fuels such as gasoline slumped recently and prompted refiners to consider cuts in operating rates. Overall demand for spot cargoes may not be as robust as the past two months following the dip in margins, said traders.
Friday 12 August 2022
#Dubai Palm-Island Developer Nakheel Plans to Raise $4.6 Billion Loan - Bloomberg
Dubai Palm-Island Developer Nakheel Plans to Raise $4.6 Billion Loan - Bloomberg
Nakheel PJSC, the developer of Dubai’s artificial palm-shaped islands, plans to raise a loan of about 17 billion dirhams ($4.6 billion) to refinance existing debt, according to people familiar with the matter.
The company is seeking the financing from a group of lenders including Dubai Islamic Bank PJSC, Emirates NBD PJSC and Mashreqbank PSC, the people said, asking not to be identified because the information is private. The banks arranging the loan are also asking global and regional lenders to participate in the deal, they said.
Nakheel was at the center of a property crash in 2009 that nearly bankrupted the emirate. After receiving support from the government, the firm worked on prime projects across Dubai until once again coming under pressure from a drop in real estate prices in 2014.
Nakheel has since consolidated operations and cut costs, and its plans to raise funds coincide with a resurgence in Dubai’s real estate market after a years-long slump. Prices have surged in the city, which became a haven for the wealthy escaping coronavirus lockdowns. A downturn that shaved more than a third off property values has also been a draw for global investors.
A representative for Nakheel declined to comment. Representatives of Dubai Islamic Bank, Emirates NBD and Mashreqbank didn’t immediately respond to requests for comment.
Nakheel PJSC, the developer of Dubai’s artificial palm-shaped islands, plans to raise a loan of about 17 billion dirhams ($4.6 billion) to refinance existing debt, according to people familiar with the matter.
The company is seeking the financing from a group of lenders including Dubai Islamic Bank PJSC, Emirates NBD PJSC and Mashreqbank PSC, the people said, asking not to be identified because the information is private. The banks arranging the loan are also asking global and regional lenders to participate in the deal, they said.
Nakheel was at the center of a property crash in 2009 that nearly bankrupted the emirate. After receiving support from the government, the firm worked on prime projects across Dubai until once again coming under pressure from a drop in real estate prices in 2014.
Nakheel has since consolidated operations and cut costs, and its plans to raise funds coincide with a resurgence in Dubai’s real estate market after a years-long slump. Prices have surged in the city, which became a haven for the wealthy escaping coronavirus lockdowns. A downturn that shaved more than a third off property values has also been a draw for global investors.
A representative for Nakheel declined to comment. Representatives of Dubai Islamic Bank, Emirates NBD and Mashreqbank didn’t immediately respond to requests for comment.
Oil falls 2% on expectations that U.S. Gulf supply disruption will ease | Reuters
Oil falls 2% on expectations that U.S. Gulf supply disruption will ease | Reuters
Oil prices plunged around 2% on Friday, on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while recession fears clouded the demand outlook.
Futures, however, were still on track for a weekly gain.
Brent crude futures fell $1.45, or 1.5%, to settle at $98.15 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.25, or 2.4%, to settle at $92.09 a barrel. Both contracts gained more than 2% on Thursday.
"We are pulling back a little bit after the big run up yesterday," said Phil Flynn, an analyst at Price Futures group.
Brent gained 3.4% this week after last week's 14% tumble on fears that rising inflation and interest rates will hit economic growth and demand for fuel. WTI rose 3.5%.
Oil prices plunged around 2% on Friday, on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while recession fears clouded the demand outlook.
Futures, however, were still on track for a weekly gain.
Brent crude futures fell $1.45, or 1.5%, to settle at $98.15 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.25, or 2.4%, to settle at $92.09 a barrel. Both contracts gained more than 2% on Thursday.
"We are pulling back a little bit after the big run up yesterday," said Phil Flynn, an analyst at Price Futures group.
Brent gained 3.4% this week after last week's 14% tumble on fears that rising inflation and interest rates will hit economic growth and demand for fuel. WTI rose 3.5%.
Oil falls 2% on expectations that U.S. Gulf supply disruption will ease | Reuters
Oil falls 2% on expectations that U.S. Gulf supply disruption will ease | Reuters
Oil prices plunged around 2% on Friday, on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while recession fears clouded the demand outlook.
Futures, however, were still on track for a weekly gain.
Brent crude futures fell $1.83, or 1.8%, to $97.77 a barrel by 11:10 a.m. EDT (1510 GMT), while U.S. West Texas Intermediate (WTI) crude fell $2.16, or 2.3%, to $92.18 a barrel. Both contracts gained more than 2% on Thursday.
"We are pulling back a little bit after the big run up yesterday," said Phil Flynn, an analyst at Price Futures group.
Brent was on track for a 3% gain this week after last week's 14% tumble on fears that rising inflation and interest rates will hit economic growth and demand for fuel. WTI was on course for a 3.7% gain.
Oil prices plunged around 2% on Friday, on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while recession fears clouded the demand outlook.
Futures, however, were still on track for a weekly gain.
Brent crude futures fell $1.83, or 1.8%, to $97.77 a barrel by 11:10 a.m. EDT (1510 GMT), while U.S. West Texas Intermediate (WTI) crude fell $2.16, or 2.3%, to $92.18 a barrel. Both contracts gained more than 2% on Thursday.
"We are pulling back a little bit after the big run up yesterday," said Phil Flynn, an analyst at Price Futures group.
Brent was on track for a 3% gain this week after last week's 14% tumble on fears that rising inflation and interest rates will hit economic growth and demand for fuel. WTI was on course for a 3.7% gain.
#AbuDhabi retreats from record highs tracking oil prices; #Dubai rebounds | Reuters
Abu Dhabi retreats from record highs tracking oil prices; Dubai rebounds | Reuters
Abu Dhabi index closed lower on Friday, slipping off its record highs in line with oil prices as weak corporate earning sapped investors' appetite, while the Dubai index bucked the trend.
Crude prices, a key catalyst for the Gulf's financial markets, fell more than $1 to $98.26 on Friday as Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day (bpd).
The Abu Dhabi index (.FTFADGI) closed 0.6% lower, snapping its 5-day gaining streak as conglomerate International Holding Company (IHC.AD) dropped 1.4% and Emirate's largest lender First Abu Dhabi Bank (FAB.AD) decreased 0.8%.
Among other stocks, Julphar (JULPHAR.AD) declined 3.7% after the Gulf pharma firm's second-quarter net profit dropped over 90% to 4.8 million dirham ($1.31 million).
Abu Dhabi index recorded a weekly gain of 3.3%, according to Refinitiv data.
Dubai's main share index (.DFMGI) rose 0.3%, supported by a 0.7% gain in Sharia-compliant lender Dubai Islamic Bank (DISB.DU), while low cost carrier Air Arabia (AIRA.DU) jumped 2.3%, a day after its second-quarter net profit soared 16-fold to 160 million dirham ($43.56 million) from a year ago.
However, Dubai's blue-chip developer Emaar Properties (EMAR.DU) slipped 1.6% as the firm reached a deal with Dubai Holding to buy its stake in their Dubai Creek Harbour joint venture for 7.5 billion dirhams ($2.04 billion). read more
The Dubai stock market was volatile after the publication of mixed earnings results. The market could however see additional increases after some price corrections, said Daniel Takieddine, CEO MENA BDSwiss.
Abu Dhabi index closed lower on Friday, slipping off its record highs in line with oil prices as weak corporate earning sapped investors' appetite, while the Dubai index bucked the trend.
Crude prices, a key catalyst for the Gulf's financial markets, fell more than $1 to $98.26 on Friday as Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day (bpd).
The Abu Dhabi index (.FTFADGI) closed 0.6% lower, snapping its 5-day gaining streak as conglomerate International Holding Company (IHC.AD) dropped 1.4% and Emirate's largest lender First Abu Dhabi Bank (FAB.AD) decreased 0.8%.
Among other stocks, Julphar (JULPHAR.AD) declined 3.7% after the Gulf pharma firm's second-quarter net profit dropped over 90% to 4.8 million dirham ($1.31 million).
Abu Dhabi index recorded a weekly gain of 3.3%, according to Refinitiv data.
Dubai's main share index (.DFMGI) rose 0.3%, supported by a 0.7% gain in Sharia-compliant lender Dubai Islamic Bank (DISB.DU), while low cost carrier Air Arabia (AIRA.DU) jumped 2.3%, a day after its second-quarter net profit soared 16-fold to 160 million dirham ($43.56 million) from a year ago.
However, Dubai's blue-chip developer Emaar Properties (EMAR.DU) slipped 1.6% as the firm reached a deal with Dubai Holding to buy its stake in their Dubai Creek Harbour joint venture for 7.5 billion dirhams ($2.04 billion). read more
The Dubai stock market was volatile after the publication of mixed earnings results. The market could however see additional increases after some price corrections, said Daniel Takieddine, CEO MENA BDSwiss.
Al Rajhi Capital cuts #Saudi SABIC’s target price on difficult outlook
Al Rajhi Capital cuts Saudi SABIC’s target price on difficult outlook
Riyadh-based brokerage Al Rajhi Capital has cut Saudi Basic Industries Corporation’s (SABIC) target price to SAR 107 ($28.53) per share from SAR 135 earlier due to expected margin pressure and challenging market dynamics.
The petrochemicals giant said its Q2 2022 net profit rose 4% to SAR7.93 billion but it warned that margins are expected to be under pressure in the second half of the year.
Al Rajhi Capital said the results were largely in line with their estimates. It has a Neutral rating on the stock.
The Agri-Nutrients segment was the best performing segment, with 14% q-o-q growth in EBITDA, followed by Hadeed, offsetting weak Petrochemicals and Specialties segment performance.
"SABIC earlier indicated that there were in-transit Urea shipments at the end March, which we think could have been recognized in Q2, leading to a 39% q-o-q rise in Agri-Nutrients sales volume, and thereby helping the company to post record earnings since Q3 2011," the brokerage said.
Going forward, SABIC indicated a cautious outlook for H2 2022, primarily due to fears of slowing down the global economy amid the lockdown in China and persistent supply chain issues. Average polymer prices are currently declining, primarily due to likely lower demand and increased supply. On the other hand, feedstock prices, despite the recent decline, are still at relatively high levels, indicating weak product spreads and thereby earnings in the near term.
"Nonetheless, the company’s ability to control costs, coupled with the anticipated synergies through the Aramco deal, are likely to offset these impacts to some extent."
Riyadh-based brokerage Al Rajhi Capital has cut Saudi Basic Industries Corporation’s (SABIC) target price to SAR 107 ($28.53) per share from SAR 135 earlier due to expected margin pressure and challenging market dynamics.
The petrochemicals giant said its Q2 2022 net profit rose 4% to SAR7.93 billion but it warned that margins are expected to be under pressure in the second half of the year.
Al Rajhi Capital said the results were largely in line with their estimates. It has a Neutral rating on the stock.
The Agri-Nutrients segment was the best performing segment, with 14% q-o-q growth in EBITDA, followed by Hadeed, offsetting weak Petrochemicals and Specialties segment performance.
"SABIC earlier indicated that there were in-transit Urea shipments at the end March, which we think could have been recognized in Q2, leading to a 39% q-o-q rise in Agri-Nutrients sales volume, and thereby helping the company to post record earnings since Q3 2011," the brokerage said.
Going forward, SABIC indicated a cautious outlook for H2 2022, primarily due to fears of slowing down the global economy amid the lockdown in China and persistent supply chain issues. Average polymer prices are currently declining, primarily due to likely lower demand and increased supply. On the other hand, feedstock prices, despite the recent decline, are still at relatively high levels, indicating weak product spreads and thereby earnings in the near term.
"Nonetheless, the company’s ability to control costs, coupled with the anticipated synergies through the Aramco deal, are likely to offset these impacts to some extent."
More losses for #Dubai’s DSI as it awaits approval of restructuring
More losses for Dubai’s DSI as it awaits approval of restructuring
Dubai-based contractor Drake & Scull International (DSI) reported a loss of AED 36.6 million for the second quarter of 2022, as accumulated losses grew to AED 4.96 billion, up AED 4.82 billion year-on-year.
The company is awaiting court approval to implement a restructuring plan according to its chairman Eng. Shafiq Abdelhamid, who said the next court hearing was to take place on September 5.
This quarter’s loss marginally decreased YoY from AED 37.8 million in 2021. The company posted a loss of AED 83.3 million for the first half of 2022, down from AED 77.5 million YoY.
Revenue for Q2 2022 was AED 21.2 million, down from AED 35.9 million YoY, and AED 45 million for the first half of the year, down YoY from AED 81.8 million.
The company said total negative equity increased to AED 3.97 billion, up from AED 3.83 billion for the same period in 2021.
Dubai-based contractor Drake & Scull International (DSI) reported a loss of AED 36.6 million for the second quarter of 2022, as accumulated losses grew to AED 4.96 billion, up AED 4.82 billion year-on-year.
The company is awaiting court approval to implement a restructuring plan according to its chairman Eng. Shafiq Abdelhamid, who said the next court hearing was to take place on September 5.
This quarter’s loss marginally decreased YoY from AED 37.8 million in 2021. The company posted a loss of AED 83.3 million for the first half of 2022, down from AED 77.5 million YoY.
Revenue for Q2 2022 was AED 21.2 million, down from AED 35.9 million YoY, and AED 45 million for the first half of the year, down YoY from AED 81.8 million.
The company said total negative equity increased to AED 3.97 billion, up from AED 3.83 billion for the same period in 2021.
#Dubai Ruler Sheikh Mohammed Gets Chunk of Developer Emaar in $2 Billion Deal - Bloomberg
Dubai Ruler Sheikh Mohammed Gets Chunk of Developer Emaar in $2 Billion Deal - Bloomberg
Dubai’s ruler is set to become the second-largest shareholder in Emaar Properties PJSC as part of a 7.5 billion dirham ($2 billion) deal that will hand the real estate firm full control of a key development in the city.
Emaar will buy Dubai Holding’s 50% stake in the the Dubai Creek Harbour project and finance the deal equally in cash and shares, Sheikh Mohammed bin Rashid Al Maktoum’s holding firm said in a statement late on Thursday.
The deal will make Sheikh Mohammed Emaar’s second-biggest investor, according to the statement, though it wasn’t immediately clear how many shares will be issued or the total stake Dubai Holding will own. Dubai already owns a 24% stake in Emaar -- which is the developer of the world’s tallest tower, Burj Khalifa.
Emaar shares fell as much as 3.5% Friday morning in Dubai. The stock has almost tripled from a March 2020 low and is up about 14% so far this year.
Emaar had suspended construction of parts of the Dubai Creek Harbour project in 2020, amid the coronavirus outbreak. The city’s property market has since rebounded strongly, helped by factors including an increase in Russian buyers looking to safeguard their wealth and Dubai’s nimble handling of the pandemic.
“We look forward to continuing our strategic role in developing and growing the real estate industry in Dubai and supporting the economic growth of the emirate,” Dubai Holding said.
Rothschild & Co. acted as sole financial adviser to Dubai Holding on the transaction.
Dubai’s ruler is set to become the second-largest shareholder in Emaar Properties PJSC as part of a 7.5 billion dirham ($2 billion) deal that will hand the real estate firm full control of a key development in the city.
Emaar will buy Dubai Holding’s 50% stake in the the Dubai Creek Harbour project and finance the deal equally in cash and shares, Sheikh Mohammed bin Rashid Al Maktoum’s holding firm said in a statement late on Thursday.
The deal will make Sheikh Mohammed Emaar’s second-biggest investor, according to the statement, though it wasn’t immediately clear how many shares will be issued or the total stake Dubai Holding will own. Dubai already owns a 24% stake in Emaar -- which is the developer of the world’s tallest tower, Burj Khalifa.
Emaar shares fell as much as 3.5% Friday morning in Dubai. The stock has almost tripled from a March 2020 low and is up about 14% so far this year.
Emaar had suspended construction of parts of the Dubai Creek Harbour project in 2020, amid the coronavirus outbreak. The city’s property market has since rebounded strongly, helped by factors including an increase in Russian buyers looking to safeguard their wealth and Dubai’s nimble handling of the pandemic.
“We look forward to continuing our strategic role in developing and growing the real estate industry in Dubai and supporting the economic growth of the emirate,” Dubai Holding said.
Rothschild & Co. acted as sole financial adviser to Dubai Holding on the transaction.
Oil prices set for weekly climb, but cloudy outlook caps gains | Reuters
Oil prices set for weekly climb, but cloudy outlook caps gains | Reuters
Oil prices were down slightly on Friday but set to rise on the week as recession fears eased though an uncertain demand outlook capped gains.
Brent crude futures were down 9 cents, or 0.1%, to $99.51 a barrel 0900 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 38 cents or 0.4% to $93.96 a barrel.
Brent was on track to rise more than 3% this week after last week's 14% tumble, its biggest weekly decline since April 2020 amid fears that rising inflation and interest rate hikes will hit economic growth and demand for fuel.
Uncertainty capped price gains as the market absorbed contrasting demand views from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
"While the peaking-inflation narrative has given some traction for risk assets lately, the more measured moves in oil prices since June suggest that some reservations remain in light of its cloudy demand outlook," said Yeap Jun Rong, a market strategist at IG.
Oil prices were down slightly on Friday but set to rise on the week as recession fears eased though an uncertain demand outlook capped gains.
Brent crude futures were down 9 cents, or 0.1%, to $99.51 a barrel 0900 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 38 cents or 0.4% to $93.96 a barrel.
Brent was on track to rise more than 3% this week after last week's 14% tumble, its biggest weekly decline since April 2020 amid fears that rising inflation and interest rate hikes will hit economic growth and demand for fuel.
Uncertainty capped price gains as the market absorbed contrasting demand views from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
"While the peaking-inflation narrative has given some traction for risk assets lately, the more measured moves in oil prices since June suggest that some reservations remain in light of its cloudy demand outlook," said Yeap Jun Rong, a market strategist at IG.