SINGAPORE: Oil prices held steady on Thursday, supported by healthy global demand but capped by the relentless rise in US production that is undermining efforts led by producer cartel OPEC to cut supplies and prop up markets.
US West Texas Intermediate (WTI) crude futures rose 7 cents, or 0.1 percent, to $61.03 a barrel by 0518 GMT.
Brent crude futures were at $64.90 per barrel, up 1 cent from their last close.
Reuters technical commodity analyst Wang Tao said market signals for Brent pointed to a continuation of recent sideways movements, although he added that technical chart indicators were “indicating the current sideways move may end very soon.”
Prices were receiving support from healthy demand. The Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that oil consumption was expected to grow by 1.62 million barrels per day (bpd) in 2018.
But looming over markets has been a relentless climb in US crude output, which hit another record last week by rising to 10.38 million bpd, up by more than 23 percent since mid-2016. Commercial crude inventories were up by 5 million barrels, at 430.93 million barrels.
US crude production, which has already overtaken that of top exporter Saudi Arabia, is expected to rise above 11 million bpd later this year, taking the top spot from Russia, according to the International Energy Agency.
“Surging US output levels will continue to undermine OPEC’s efforts for stronger oil prices,” said Singapore-based brokerage Phillip Futures in a note on Thursday.
OPEC on Wednesday raised its forecast for non-member oil supply to almost double the growth predicted four months ago.
The group said non-OPEC producers would boost supply by 1.66 million bpd in 2018.
But since OPEC expects demand this year to grow by only 1.62 million bpd, that would leave the market slightly oversupplied and may require more or longer supply restraint.
OPEC and several other non-OPEC producers led by Russia began cutting supply in January 2017 to erase a global glut of crude that had built up since 2014.
OPEC said its combined output dropped by 77,000 bpd to 32.186 million bpd in February, led by declines in Iraq, the United Arab Emirates and Venezuela.
These cuts and rising US output mean that OPEC is losing market share.
“In 2018, demand for OPEC crude is forecast at 32.6 million bpd, down by 0.2 million bpd from the previous assessment and 0.2 million bpd lower than a year earlier,” OPEC said.
Oil prices stable on healthy demand, but oversupply looms later in 2018
Oil prices stable on healthy demand, but oversupply looms later in 2018
Saudi investment pipeline active as reforms advance, says Pakistan minister
ALULA: Pakistan’s Finance Minister Mohammed Aurangzeb described Saudi Arabia as a “longstanding partner” and emphasized the importance of sustainable, mutually beneficial cooperation, particularly in key economic sectors.
Speaking to Arab News on the sidelines of the AlUla Conference for Emerging Market Economies, Aurangzeb said the relationship between Pakistan and Saudi Arabia remains resilient despite global geopolitical tensions.
“The Kingdom has been a longstanding partner of Pakistan for the longest time, and we are very grateful for how we have been supported through thick and thin, through rough patches and, even now that we have achieved macroeconomic stability, I think we are now well positioned for growth.”
Aurangzeb said the partnership has facilitated investment across several sectors, including minerals and mining, information technology, agriculture, and tourism. He cited an active pipeline of Saudi investments, including Wafi’s entry into Pakistan’s downstream oil and gas sector.
“The Kingdom has been very public about their appetite for the country, and the sectors are minerals and mining, IT, agriculture, tourism; and there are already investments which have come in. For example, Wafi came in (in terms of downstream oil and gas stations). There’s a very active pipeline.”
He said private sector activity is driving growth in these areas, while government-to-government cooperation is focused mainly on infrastructure development.
Acknowledging longstanding investor concerns related to bureaucracy and delays, Aurangzeb said Pakistan has made progress over the past two years through structural reforms and fiscal discipline, alongside efforts to improve the business environment.
“The last two years we have worked very hard in terms of structural reforms, in terms of what I call getting the basic hygiene right, in terms of the fiscal situation, the current economic situation (…) in terms of all those areas of getting the basic hygiene in a good place.”
Aurangzeb highlighted mining and refining as key areas of engagement, including discussions around the Reko Diq project, while stressing that talks with Saudi investors extend beyond individual ventures.
“From my perspective, it’s not just about one mine, the discussions will continue with the Saudi investors on a number of these areas.”
He also pointed to growing cooperation in the IT sector, particularly in artificial intelligence, noting that several Pakistani tech firms are already in discussions with Saudi counterparts or have established offices in the Kingdom.
Referring to recent talks with Saudi Minister of Economy and Planning Faisal Alibrahim, Aurangzeb said Pakistan’s large freelance workforce presents opportunities for deeper collaboration, provided skills development keeps pace with demand.
“I was just with (Saudi) minister of economy and planning, and he was specifically referring to the Pakistani tech talent, and he is absolutely right. We have the third-largest freelancer population in the world, and what we need to do is to ensure that we upscale, rescale, upgrade them.”
Aurangzeb also cited opportunities to benefit from Saudi Arabia’s experience in the energy sector and noted continued cooperation in defense production.
Looking ahead, he said Pakistan aims to recalibrate its relationship with Saudi Arabia toward trade and investment rather than reliance on aid.
“Our prime minister has been very clear that we want to move this entire discussion as we go forward from aid and support to trade and investment.”
