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
Closing Bell: Saudi stocks slip as Tadawul falls 1% amid broad market weakness
RIYADH: Saudi stocks fell sharply on Tuesday, with the Tadawul All Share Index closing down 108.14 points, or 1.03 percent, at 10,381.51.
The broader decline was reflected across major indices. The MSCI Tadawul 30 Index slipped 0.78 percent to 1,378.00, while Nomu, the parallel market index, fell 1 percent to 23,040.79.
Market breadth was strongly negative on the main board, with 237 stocks falling compared to just 24 gainers. Trading activity remained robust, with 164.7 million shares changing hands and a total traded value of SR3.19 billion ($850.6 million).
Among the gainers, SEDCO Capital REIT Fund led, rising 2.73 percent to SR6.77, followed by Chubb Arabia Cooperative Insurance Co., which gained 2.69 percent to SR20.20.
National Medical Care Co. added 1.72 percent to close at SR141.60, while Alyamamah Steel Industries Co. and Thimar Advertising, Public Relations and Marketing Co. advanced 1.57 percent and 1.13 percent, respectively.
Losses were led by Al Masar Al Shamil Education Co., which tumbled 8.36 percent to SR24.65. Raoom Trading Co.fell 6.75 percent to SR64.20, while Alkhaleej Training and Education Co. dropped 6.60 percent to SR18.12 and Naqi Water Co. declined 5.51 percent to SR54.00. Gulf General Cooperative Insurance Co. closed 5.44 percent lower at SR3.65.
On the announcement front, Chubb Arabia Cooperative Insurance Co. signed a multiyear insurance agreement with Saudi Electricity Co. to provide various coverages, expected to positively impact its financial results over the 2025–2026 period. The deal will run for three years and two months and is within the company’s normal course of business.
Meanwhile, Bupa Arabia for Cooperative Insurance Co. announced a one-year health insurance contract with Saudi National Bank, valued at SR330.2 million, covering the bank’s employees and their families from January 2026. Despite the sizable contract, Bupa Arabia shares fell 0.8 percent to close at SR137, weighed down by the broader market weakness.
In contrast, United Cooperative Assurance Co. revealed an extension of its engineering insurance agreement with Saudi Binladin Group for the Grand Mosque expansion in Makkah. The contract value exceeds 20 percent of the company’s gross written premiums based on its latest audited financials and is expected to support results through 2026. However, the stock came under selling pressure, ending the session down 4.51 percent at SR3.39.
