OPEC+ Gains Validation as Demand Woes Erase Post-Cut Rally - Bloomberg
It’s starting to look like OPEC+ was right again.
Saudi Arabia and its partners provoked a backlash from the White House and beyond earlier this month when they shocked global oil markets with new output reductions. But with Brent crude sinking below $80 a barrel Wednesday — wiping out the price gains since the announcement — the group’s contention that the cuts were needed to prevent an oversupply is gaining justification.
“There is no doubt in my mind that the reasoning behind the early April announcement about cuts in May was appropriate,” said Ed Morse, head of commodities research at Citigroup Inc. “Those who were predicting over $100 oil did not understand how weak markets were looking.”
It’s reminiscent of the previous round of OPEC+ cutbacks in October — a decision that initially drew condemnation but came to appear prescient as the demand weakened and prices fell.
Mideast Stocks: Gulf markets put in mixed performance on recession fears
Stock markets in the Gulf put in a mixed performance on Wednesday amid expectations of slowing economic growth and fears of a recession in the United States.
Saudi Arabia's benchmark index was among the risers, adding 0.4% for a sixth session of gains, with Al Rajhi Bank closing 1.3% higher and Dr Sulaiman Al-Habib Medical Services up 1.7%. U.S. Consumer confidence fell to a nine-month low in April, a survey showed on Tuesday, intensifying concerns of a potential recession.
Investors are worried that further potential interest rate hikes by inflation-fighting central banks could slow economic growth and dent energy demand in the United States, Britain and the European Union. Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the U.S. dollar and follow the Fed's policy moves closely, exposing the region to monetary tightening in the world's largest economy.
In Abu Dhabi, the index rose 0.3%, with Fadi Reyad, Chief Market Analyst at CAPEX.com MENA, noting a positive trend was maintained as oil prices remained relatively stable. "The market was led by rebounds in some of its largest stocks and could continue to see a positive performance with investors' sentiment moving to the bright side after the end of Ramadan," he said.
Dubai's main share index fell 0.5%, weighed down by a 2.5% drop in blue-chip developer Emaar Properties.
The Qatari benchmark, which traded after a three session break, rose 1.4%. Outside the Gulf, Egypt's blue-chip index fell 0.4%, with top lender Commercial International Bank down more than 2%.
According to Reyad, the Egyptian bourse saw a more pronounced decline after failing to break above this year's high. "The market could come under pressure as international investors could accelerate their selling trend if global conditions continue to deteriorate, in particular, if concerns around U.S. banks' health increase."
Gulf economies to grow at much slower pace in 2023 on lower oil revenues - Reuters poll | Reuters
Gulf Cooperation Council (GCC) economies will grow at a much slower pace in 2023 than last year as expectations for muted gains in crude prices and oil production cuts take a toll on revenues, a Reuters poll found.
Oil prices have spiked nearly 20% since they hit this year's low of about $70 a barrel on March 20, largely driven by the Organization of Petroleum Exporting Countries (OPEC+) decision to reduce oil output by about 1.16 million barrels per day and China's reopening.
But further gains will largely be subdued over the coming months on slower global demand - not good news for the bloc which is heavily dependent on oil.
Saudi Arabia, the world's largest oil producer, will expand 3.2% this year, less than half 2022's decade-high pace of 8.7%, according to the April 6-25 Reuters poll of 16 economists.
The growth rate was expected to be the same next year.
UK Convicts Couriers Who Smuggled £100 Million of Cash to Dubai - Bloomberg
A network of couriers who jointly smuggled more than £100 million ($124 million) of criminal cash in suitcases from the UK to Dubai was found guilty following a trial of one of the largest money laundering scams ever recorded.
In total 11 couriers have been convicted alongside the ringleader, the National Crime Agency said Wednesday. In less than a year, the couriers flew more than 80 flights, carrying cases full of drug money. The group communicated on a Whatsapp group called Sunshine and Lollipops.
The couriers were given business class flights to take advantage of a larger luggage allowance and check-in closer to the departure time, investigators said. Around £500,000 was crammed into suitcases that were then packed with coffee granules or sprayed with air freshener to disguise the scent from sniffer dogs.
British police have targeted London to Dubai laundering routes, concerned that criminal cash becomes much harder to trace once it’s taken out of the country. The United Arab Emirates has been in the spotlight over dirty money flows and last March, the global financial crimes watchdog placed the country on a gray list for failing to do enough to uncover illicit funds.
“These couriers were important cogs in a large money laundering wheel,” Ian Truby, the NCA’s senior investigating officer, said in a statement. “The crime group they belonged to was responsible for smuggling eye-watering amounts of criminal cash out of the UK.
Police arrested Emirati Abdullah Mohammed Ali Bin Beyat Alfalasi at an apartment belonging to his wife in London’s upmarket Mayfair district in 2021. Alfalasi offered a “money laundering service” to criminal organizations in both the UK and other European countries, prosecutors said. He was jailed for nine years and seven months.
Burj Khalifa Supplier Emirates Steel Arkan Weighs Thyssenkrupp Steel Deal - Bloomberg
Emirates Steel Arkan is pursuing a potential investment in Thyssenkrupp AG’s massive steel unit, with negotiations set to enter crunch time just as the German conglomerate’s incoming boss takes the reins, people with knowledge of the matter said.
The Abu Dhabi state-backed group is emerging as the most serious contender to buy a stake in the Thyssenkrupp business and could make a formal bid in the coming months, the people said, asking not to be identified because the information is private.
One option being discussed envisions Emirates Steel Arkan taking a minority stake in Thyssenkrupp Steel as part of a business partnership, some of the people said. The Middle Eastern company would produce energy-intensive products in the United Arab Emirates using renewable power before shipping them to Germany, where Thyssenkrupp could shape them into finished products for the automotive industry, according to those people.
Thyssenkrupp rose as much as 5.7% in Frankfurt, the steepest intraday gain in more than a week. The shares are up around 12% this year, valuing the company at about $4.4 billion.
UAE Ministry of Finance to issue dirham-denominated Islamic Treasury Sukuk | Banking – Gulf News
The UAE Ministry of Finance is launching a dirham-denominated Islamic Treasury Sukuk (T-Sukuk), with a benchmark auction size of Dh1.1 billion. The T-Sukuk will initially be issued in 2/3/5-year tenures and followed by a 10-year sukuk at a later date.
“The Ministry of Finance cooperates with all its partners - foremostly the Central Bank of the UAE - to attract investments and deploy them in Islamic economy channels," said Mohamed Bin Hadi Al Hussaini, Minister of State for Financial Affairs.
"The T-Sukuk are Sharia-compliant financial certificates, and they will be traded to reflect the local return on investment, support economic diversification and financial inclusion, as well as contribute to achieving comprehensive and sustainable economic and social development goals.”
Octopus Energy, Abu Dhabi energy firm invest in UK-Morocco power cable project | Reuters
Abu Dhabi National Energy Company PJSC (TAQA) (TAQA.AD) and Britain's Octopus Energy Group have invested 30 million pounds ($37.36 million0 into a subsea power cable project, which aims to connect Morocco and the UK, project company Xlinks said on Wednesday.
TAQA invested 25 million pounds, and Octopus 5 million in the development funding round, Xlinks said.
The company is planning to lay the world's longest high-voltage direct current (HVDC) subsea cables running more than 3,800 km (2,361 miles) below sea between the UK and Morocco, passing Portugal, Spain and France.
Major Gulf markets mixed in early trade | Reuters
Major stock markets in the Gulf were mixed in early trade on Wednesday amid rising recession fears in the United States, with the Saudi index on course to end five-day winning streak.
U.S. Consumer confidence fell to a nine-month low in April, a survey showed, intensifying concerns of a potential recession. Asian markets remained subdued.
Saudi Arabia's benchmark index (.TASI) dropped 0.3%, on course snap a five-session gains, hit by a 1.1% drop in oil giant Saudi Aramco (2222.SE).
Dubai's main share index (.DFMGI) retreated 0.6%, weighed down by a 3.2% slide in Emaar Properties PJSC (EMAR.DU).
The United Arab Emirates needs time to demonstrate the effectiveness and enforcement of policies introduced against financial crime before it can be removed from a global watchdog's 'grey' list, the economy minister told Reuters.
In Abu Dhabi, the index (.FTFADGI) gained 0.2%.
Oil - a key catalyst for the Gulf's financial markets - rose after plunging more than 2% in the previous session as reports of falling U.S. crude oil and fuel inventories refocused investors on robust demand in the world's top oil consumer.
U.S. crude oil stocks fell by about 6.1 million barrels in the week ended April 21, according to market sources citing American Petroleum Institute (API) figures on Tuesday. Analysts had expected crude inventories to fall by about 1.5 million barrels.
The Qatari index (.QSI) - which traded after a three session break - advanced 1.3% and was on track to snap a seven-day losing streak, with Qatar Islamic Bank QPSC (QISB.QA) rising 2.2%.
