RIYADH: Saudi Arabia’s economy contracted in the first two quarters this year, official figures show.
General Authority for Statistics figures show that gross domestic product shrank by 2.3 percent in the second quarter compared with the first three months of 2017, mainly over low oil prices and less production.
GDP in the first quarter contracted by 3.7 percent compared with the last quarter of 2016.
Saudi Arabia, the world’s top oil exporter and the largest economy in the Middle East, has taken a series of austerity measures since oil prices collapsed in mid-2014.
Until 2014, oil income made up more than 90 percent of public revenues.
The kingdom has since concentrated on diversification, including plans to introduce value-added tax and privatise part of state-owned oil giant Aramco.
Oil prices have partly recovered after major producers inside and outside OPEC, including Saudi Arabia, agreed last year to cut output by 1.8 million barrels per day to bolster global prices.
Producers agreed to extend the cuts for nine more months, ending in March 2018. OPEC will discuss the possibility of a further extension at a ministerial meeting next month.
The International Monetary Fund has forecast that the country’s economy will grow by 0.1 percent this fiscal year, down from 1.7 percent in 2016 and 3.4 percent the previous year.
Saudi economy contracts on lower oil price and production
Saudi economy contracts on lower oil price and production
European gas prices soar almost 50% as Iran conflict halts Qatar LNG output
- Analysts warn prolonged disruption could push prices higher
- Some shipments of oil, LNG through Strait of Hormuz suspended
- Benchmark Asian LNG price up almost 39 percent
LONDON: Benchmark Dutch and British wholesale gas prices soared by almost 50 percent on Monday, after major liquefied natural gas exporter Qatar Energy said it had halted production due to attacks in the Middle East.
Qatar, soon to cement its role as the world’s second largest LNG exporter after the US, plays a major role in balancing both Asian and European markets’ demand of LNG.
Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway.
Europe has increased imports of LNG over the past few years as it seeks to phase out Russian gas following Russia’s invasion of Ukraine.
Around 20 percent of the world’s LNG transits through the Strait of Hormuz and a prolonged suspension or full closure would increase global competition for other sources of the gas, driving up prices internationally.
“Disruptions to LNG flows would reignite competition between Asia and Europe for available cargoes,” said Massimo Di Odoardo, vice president, gas and LNG research at Wood Mackenzie.
The Dutch front-month contract at the TTF hub, seen as a benchmark price for Europe, was up €14.56 at €46.52 per megawatt hour, or around $15.92/mmBtu, by 12:55 p.m. GMT, ICE data showed.
Prices were already some 25 percent higher earlier in the day but extended gains after QatarEnergy’s production halt.
Benchmark Asian LNG prices jumped almost 39 percent on Monday morning with the S&P Global Energy Japan-Korea-Marker, widely used as an Asian LNG benchmark, at $15.068 per million British thermal units, Platts data showed.
“If LNG/gas markets start to price in an extended period of losses to Qatari LNG supply, TTF could potentially spike to 80-100 euros/MWh ($28-35/mmBtu),” Warren Patterson, head of commodities strategy at ING, said. The British April contract was up 40.83 pence at 119.40 pence per therm, ICE data showed.
Europe is also relying on LNG imports to help fill its gas storage sites which have been depleted over the winter and are currently around 30 percent full, the latest data from Gas Infrastructure Europe showed. In the European carbon market, the benchmark contract was down €1.10 at €69.17 a tonne
