NEW YORK: Oil soared on Thursday, extending its rebound after major oil-producing nations said they would accelerate planned production cuts to combat the dramatic slump in demand due to the coronavirus pandemic.
Oil prices have had one of their most tumultuous weeks ever. US West Texas Intermediate crude futures (WTI) closed at negative $37.63 on Monday, in the worst selloff for that contract in history. Global benchmark Brent crude was slammed on Tuesday, hitting a two-decade low before rebounding.
Since the start of the year both benchmarks have lost more than two-thirds of their value. Fuel demand is down about 30% worldwide in April and supply will outstrip demand for months to come due to the pandemic.
Brent rose $1.90, or 9.4%, to $22.28 a barrel by 11:53 a.m. EDT (1553 GMT), while WTI jumped $4.02, or 29%, to $17.80.
The Organization of the Petroleum Exporting Countries and other oil producing nations, a grouping known as OPEC+, agreed this month to cut output by a record 9.7 million barrels per day, around 10% of global supply, to support oil prices, but prices continued to decline.
Kuwait said on Thursday that it had begun cutting oil supply to the international market, ahead of the May 1 date when the deal was supposed to take effect.
Whether that will be sufficient to offset weak demand is unclear. Rystad Energy cut its forecast for oil demand in 2020 to 89.2 million bpd, a 10% decline from 2019. Last week, the energy consultant projected demand would fall to 90.3 million bpd in 2020.
The market was also higher in part after US President Donald Trump said he instructed the US Navy to fire on any Iranian ships that harass it in the Gulf, although he added later he was not changing the military’s rules of engagement.
The head of Iran’s Revolutionary Guards said Tehran will destroy US warships if its security is threatened in the Gulf.
“This ratchets up tensions once again between the US and Iran. However, given the glut we have in the oil market, it is difficult to see this offering lasting support to the market, unless the situation does escalate further,” ING’s head of commodities strategy Warren Patterson said.
Oil rallies on acceleration of output cuts from OPEC nations
https://arab.news/53hnu
Oil rallies on acceleration of output cuts from OPEC nations
- Kuwait has already begun reducing oil supply
- Trump asks US Navy to fire on Iranian ships that harass it
Saudi Arabia opens 3rd round of Exploration Empowerment Program
RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources, in collaboration with the Ministry of Investment, has opened applications for the third round of the Exploration Empowerment Program, part of ongoing efforts to accelerate mineral exploration in the Kingdom, reduce early-stage investment risks, and attract high-quality investment from local and international mining companies.
The third round of the Exploration Empowerment Program offers a comprehensive support package targeting exploration companies and mineral prospecting license holders.
The initiative aims to lower investment risks for projects and support a faster transition from prospecting to development.
"The program provides coverage of up to 70 percent of the total salaries of Saudi technical staff, such as geologists, during the first two years, increasing to 100 percent thereafter, in line with program requirements.
This support aims to develop talent, build national capabilities in mineral exploration, promote job localization, and facilitate the transfer of geological knowledge.
The application for the third round opened on Jan. 14, allowing participants to benefit from the Kingdom’s attractive investment environment, its stable legal framework, and streamlined regulatory structures, as well as integrated infrastructure that supports the transition from mineral resources to operational mines.
The ministry has set the timeline for the third round, with the application period running from Jan. 14 to March 31.
This will be followed by the evaluation, approval, and signing of agreements from April 1 to May 31, with the eligible projects set to be announced between June 1 and July 31 of the same year.
The program stages include submitting exploration data during the reimbursement and payment phase from Sept. 1 to Nov. 30, followed by technical and financial verification of work programs and approval of the disbursement of support funds in January 2027.
The exploration data will then be published on the National Geological Database in April 2027.
The ministry emphasized that the EEP focuses on supporting the exploration of strategically important minerals with national priority. It also contributes to enhancing geological knowledge by providing up-to-date data that meets international standards, helping investors make informed decisions and supporting the growth of national companies and local supply chains.
The ministry urged companies to apply early to benefit from the program’s third round, which coincided with the fifth edition of the International Mining Conference, which was held from Jan. 13 to 15.
