‘Worst is over’ as oil stages a comeback

West Texas Intermediate gained 20.5 percent. (AFP)
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Updated 06 May 2020
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‘Worst is over’ as oil stages a comeback

  • Prices surge as big banks, analysts say global glut of crude is being drained

DUBAI: Oil markets breathed a sigh of relief on Tuesday amid tentative signs that the global glut of crude was being drained. 

Brent crude, the Middle East benchmark, traded above $30 a barrel for the first time since the middle of last month. It rose by $3.77, or 13.9 percent, to close at $30.97 a barrel.

West Texas Intermediate, the US standard that collapsed into negative territory last month, gained $4.17, or 20.5 percent, to settle at $24.56 a barrel.

Western markets had the weekend to assess the impact of the big OPEC+ cuts that came into effect on Friday, and liked what they saw. Two of the world’s biggest investment banks said oil markets had bottomed out, and predicted a mild recovery.

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Two of the world’s biggest investment banks said oil markets had bottomed out, and predicted a mild recovery

Goldman Sachs said production has started to decline quickly, and raised next year’s forecast prices to $51.38 per barrel for WTI and $55.63 for Brent. “Demand is also beginning to recover from a low base, led by a restarting Chinese economy and improving transportation demand in developed market economies,” the bank said.

Morgan Stanley forecast Brent to rise steadily to $35 by the end of the year. The bank did not expect an immediate rally but “the greatest mismatch in supply/demand is probably behind us,” it said.

The bank said the peak of oversupply in global markets had probably been reached and a storage crunch was abating. “Inventories have built but not quite as strongly as feared. With social distancing measures ramped up in March ... the observed inventory increases have not been quite as strong as feared,” it said

Phil Flynn, senior analyst at Price Futures Group, said: “The market is starting to realize that demand destruction has been terrible, but we’re reopening and demand is going to get better. But the production pullback is just beginning.”

Saudi Arabia’s crude oil exports in May are expected to drop to about 6 million barrels a day, the lowest in almost a decade, under the OPEC+ agreement, analysts told the Reuters news agency.

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The Swiss bank UBS said the easing of coronavirus restrictions in many countries would help balance out supply and demand, leading to a shortfall in supply by the end of the year.

US President Donald Trump, who has attacked OPEC in the past for keeping oil prices high to the detriment of American consumers, tweeted: “Oil prices moving up nicely as demand begins again!”

However, oil trading professionals did not share his optimism. Matt Stanley, a broker in Dubai for the global trader Starfuels, said: “I am fearful of prices suffering another collapse on the back of hope and a perceived demand that is ultimately only going to end in disappointment.”


KAIA records busiest week with new operational records

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KAIA records busiest week with new operational records

JEDDAH: King Abdulaziz International Airport started 2026 on a strong note, handling 5.45 million passengers in January, a 7.3 percent increase over the same month last year.

Flight movements reached 29,200, up 11 percent, while total baggage throughput rose 8 percent to 6.6 million items.

The airport recorded its busiest operational week from Jan. 11 to 17, serving 1.28 million travelers.

Passenger numbers peaked on Jan. 17, marking the airport’s busiest day ever with 195,300 travelers and 1,089 flights, underscoring the efficiency of its operations and the capacity of its infrastructure to accommodate growing travel demand.

These results reflect Jeddah Airports Co.’s ongoing efforts to enhance the passenger experience, expand travel options, and manage rising air traffic in line with the National Aviation Program and Saudi Vision 2030.

Since its establishment in 2022, the company, known as JEDCO, has overseen the management and operations of KAIA, driving the implementation of the Aviation Program under the National Transport and Logistics Strategy.

In 2025, the airport reached a historic milestone, welcoming 53.4 million passengers, the highest annual total ever recorded at a Saudi airport, placing it among the world’s mega airports in terms of traffic.

The airport handled a total of 310,000 flights and 60.4 million bags, representing a 12 percent increase compared to 2024. It also handled 9.57 million Zamzam water containers and 2,968 cargo flights.

This achievement reflects the airport’s qualitative transformation and its position as a regional hub and national gateway connecting the Kingdom to the world. It also highlights its role in facilitating the movement of visitors and pilgrims, promoting tourism in line with the goals of Vision 2030, diversifying the economy, and providing a distinguished travel experience.

The January milestone at KAIA is part of a broader success story for Saudi airports, with 2025 statistics showing unprecedented growth in the Kingdom’s air traffic, surpassing regional averages and cementing Saudi Arabia’s status as one of the world’s fastest-growing and most advanced aviation markets.

Passenger numbers rose 9.6 percent, fueled by tourism, international events, and expanding global connectivity.

This growth reflected both increased capacity and enhanced connectivity, with Saudi airports handling approximately 140.9 million passengers, 76 million international and 65 million domestic passengers. Flight movements rose 8.3 percent to around 980,400, highlighting the sector’s sustained recovery.

KAIA accounted for 38 percent of total passenger traffic, averaging 146,000 passengers daily and operating at 107 percent of capacity. King Khalid International Airport handled 29 percent of passengers, with a daily average of 112,000. Madinah and Dammam airports also recorded historic surges, operating at 137 percent and 112 percent of capacity, respectively.