SINGAPORE: Oil prices were mixed on Tuesday as supply cuts, led by producer club OPEC, and US sanctions on fuel exports from Iran and Venezuela supported crude, while concerns about an economic slowdown weighed on the market.
Front-month Brent crude futures, the international benchmark for oil prices, were at $69.99 at 0637 GMT, down 12 cents, or 0.2 percent, from the last session’s close, when they rose 2.1 percent.
US West Texas Intermediate (WTI) crude futures were at $59.03 per barrel, up 40 cents, or 0.7 percent, from their last close on Friday. WTI did not trade on Monday due to a US public holiday.
Prices have been supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) since the start of the year, and by political tensions in the Middle East.
OPEC and some allies including Russia are due to meet on June 25 and 26 to discuss output policy.
Beyond the output cuts, US bank, Citi said, “Geopolitical turmoil across the Middle East ... are likely to encourage financial investors to realign with their bullish physical counterparties.”
In physical oil markets, Middle East crude premiums hit their highest levels in years earlier this month amid falling supply.
Beyond the OPEC cuts, US sanctions on petroleum exports from Iran and Venezuela have tightened markets.
“Iran exports remain under pressure as US sanctions bite. This comes as OPEC appears to be heading toward extending the current production cut agreement,” Citi added.
Trump last year withdrew the United States from a 2015 international nuclear deal with Iran, and Washington is ratcheting up sanctions seeking to end Tehran’s international sales of crude oil and strangle its economy.
Washington has also imposed sanctions on Venezuela’s oil exports, in a bid to topple the government under President Nicolas Maduro there.
Despite this, markets remain cautious amid an economic slowdown as a result of the ongoing trade war between the United States and China, which is also expected to dent fuel consumption.
“We really need to see some strong demand figures, which so far this year has not happened, before we can really start listening to the bulls,” said Matt Stanley, a broker at Starfuels in Dubai.
Oil mixed as OPEC cuts, US sanctions prop up prices while trade war weighs
Oil mixed as OPEC cuts, US sanctions prop up prices while trade war weighs
- OPEC and some allies including Russia are due to meet on June 25 and 26 to discuss output policy
- US sanctions on petroleum exports from Iran and Venezuela have tightened markets
Closing Bell: Saudi equities continue 4-day upward trend
RIYADH: Saudi equities closed higher on Wednesday, with the Tadawul All Share Index rising 51.52 points, or 0.47 percent, to finish at 10,945.15.
Trading activity was robust, with 373.9 million shares exchanged and total turnover reaching SR6.81 billion.
The MT30 Index also ended the session in positive territory, advancing 11.93 points, or 0.82 percent, to 1,472.82, while the Nomu Parallel Market Index declined 116.82 points, or 0.49 percent, to 23,551.47, reflecting continued volatility in the parallel market.
The main market saw 90 gainers against 171 decliners, indicating selective buying.
On the upside, Al Kathiri Holding Co. led gainers, closing at SR2.18, up SR0.12, or 5.83 percent. Wafrah for Industry and Development Co. advanced to SR23, gaining SR0.99, or 4.5 percent, while Al Ramz Real Estate Co. rose 4.35 percent to close at SR60.
SABIC Agri-Nutrients Co. added 4.21 percent to SR118.70, and Al Jouf Agricultural Development Co. climbed 4.12 percent to SR45.
Meanwhile, losses were led by Saudi Industrial Export Co., which fell 9.73 percent to SR2.69. United Cooperative Assurance Co. declined 5.08 percent to SR3.74, while Thimar Development Holding Co. dropped 4.54 percent to SR35.30.
Abdullah Saad Mohammed Abo Moati for Bookstores Co. retreated 4.15 percent to SR48.50, and Gulf Union Alahlia Cooperative Insurance Co. slipped 3.96 percent to SR10.44.
On the announcement front, Saudi National Bank announced its intention to issue US dollar-denominated Additional Tier 1 capital notes under its existing international capital programe, with the final size and terms to be determined subject to market conditions and regulatory approvals.
The planned issuance aims to strengthen Tier 1 capital and support the bank’s broader financial and strategic objectives.
The stock closed at SR42.70, gaining SR0.70, or 1.67 percent, reflecting positive investor reaction to the capital management move.
Separately, Almasane Alkobra Mining Co. said its board approved the establishment of a wholly owned simplified joint stock company to provide drilling, exploration and related support services, with a share capital of SR100 million and headquarters in Najran, subject to regulatory approvals.
The new subsidiary aligns with the company’s strategy to enhance operational efficiency and expand its role in the Kingdom’s mining sector.
Shares of Almasane Alkobra Mining closed at SR98.70, up SR0.30, or 0.3 percent, by the end of the session.
