Oil jumps on steep drop in US crude stocks

Wall Street edged further towards normalcy this week as the New York Stock Exchange (NYSE) withdrew some of its toughest COVID-19 restrictions. (AFP)
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Updated 05 May 2021

Oil jumps on steep drop in US crude stocks

LONDON: Oil prices rose nearly 1 percent on Wednesday, extending overnight gains, after industry data estimated US crude stockpiles fell much more than expected last week reinforcing bullish views on fuel demand in the world’s largest economy.
US West Texas Intermediate (WTI) crude futures leapt 60 cents, or 0.9 percent, to $66.29 a barrel at 0130 GMT, after climbing to $66.45, its highest since March 8.
Brent crude futures jumped 58 cents, or 0.8 percent, to $69.46 barrel after touching a more than seven-week high of $69.64.
Both benchmark contracts rose nearly 2 percent on Tuesday ahead of data from the American Petroleum Institute industry group.
API figures showed crude stocks fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters.
“This should provide some further immediate upside momentum for the market,” ING Economics analysts said in a note.
Traders are awaiting data from the US Energy Information Administration due on Wednesday to see if official data shows such a large drawdown.
“If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January,” Commonwealth Bank analyst Vivek Dhar said in a note.
The rise in oil prices to nearly two-month highs has been supported by COVID-19 vaccine rollouts in the United States and Europe paving the way for pandemic lockdowns to be lifted and air travel to pick up.
So far that has more than offset a drop in fuel demand in India, which is battling a surge in infections.
“However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment,” ING analysts said of the situation in India.
 


How big is Bitcoin’s carbon footprint?

Updated 6 min 12 sec ago

How big is Bitcoin’s carbon footprint?

  • Concerns mount about the way bitcoin is ‘mined’ using fossil fuels

LONDON: Tesla boss Elon Musk’s sudden u-turn over accepting bitcoin to buy his electric vehicles has thrust the cryptocurrency’s energy usage into the headlights.

Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.

Musk said on Wednesday he backed that concern, especially the use of “coal, which has the worst emissions of any fuel.”

So how dirty is the virtual currency?

Power hungry

Unlike mainstream traditional currencies, bitcoin is virtual and not made from paper or plastic, or even metal. Bitcoin is virtual but power-hungry as it is created using high-powered computers around the globe.

At current rates, such bitcoin “mining” devours about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency shows. Some bitcoin proponents note that the existing financial system with its millions of employees and computers in air-conditioned offices uses large amounts of energy too.

Coal connection

The world’s biggest cryptocurrency, which was once a fringe asset class, has become increasingly mainstream as it is accepted by more major US companies and financial firms. Greater demand, and higher prices, lead to more miners competing to solve puzzles in the fastest time to win coin, using increasingly powerful computers that need more energy.

Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that often relies on fossil fuels, particularly coal, the dirtiest of them all.

Green Bitcoin?

Bitcoin production is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year, or between the levels produced by Jordan and Sri Lanka, a 2019 study in scientific journal Joule found.

There are growing attempts in the cryptocurrency industry to mitigate the environmental harm of mining and the entrance of big corporations into the crypto market could boost incentives to produce “green bitcoin” using renewable energy. Some sustainability experts say that companies could buy carbon credits to compensate for the impact. And blockchain analysis firms say that it is possible in theory to track the source of bitcoin, raising the possibility that a premium could be charged for green bitcoin. Climate change policies by governments around the world might also help.

Alternative energy

Projects from Canada to Siberia are striving for ways to wean bitcoin mining away from fossil fuels, such as using hydropower, or at least to reduce its carbon footprint, and make the currency more palatable to mainstream investors.

Some are attempting to repurpose the heat generated by the mining to serve agriculture, heating and other needs, while others are using power generated by flare gas — a by-product from oil extraction usually burned off — for crypto mining.

China crisis

The dominance of Chinese miners and lack of motivation to swap cheap fossil fuels for more expensive renewables means there are few quick fixes to bitcoin’s emissions problem, some industry players and academics warn. Chinese miners account for about 70 percent of production, data from the University of Cambridge’s Center for Alternative Finance shows. They tend to use renewable energy — mostly hydropower — during the rainy summer months, but fossil fuels — primarily coal — for the rest of the year.


Samsung boosts non-memory chip investment to $151bn

Updated 11 min 58 sec ago

Samsung boosts non-memory chip investment to $151bn

  • The government will offer about 1 trillion won in long-term loans for increasing 8-inch wafer chip contract manufacturing capacity

SEOUL: Samsung Electronics on Thursday raised its planned investment in non-memory chips to 171 trillion won ($151 billion) through 2030, joining a rush of firms ramping up investments amid a global semiconductor shortage.

Countries have also been working to bolster chip supply chains as the chip shortage affects production in industries such as autos. South Korea on Thursday said it would offer bigger tax breaks plus 1 trillion won ($883 million) in loans for its local chip industry.

Some 153 chip companies including global No. 1 and 2 memory chip makers Samsung and SK Hynix already have plans to invest a combined 510 trillion won or more between this year and 2030, according to the Korea Semiconductor Industry Association.

Samsung’s increased investment target, up from 133 trillion won announced in 2019, is expected to be used for its goal to become the world’s No. 1 logic chipmaker by 2030. It wants to challenge bigger rivals TSMC in contract chip manufacturing and Qualcomm in mobile processing chips.

Samsung also said in a statement that its third chip production line at Pyeongtaek, south of Seoul — the size of 25 football fields — will be completed in the second half of 2022. “Countries around the world have entered fierce competition by reorganizing supply chains around their own country,” South Korean President Moon Jae-in said Thursday at Samsung’s chip site at Pyeongtaek.

“We need pre-emptive investments ... to strengthen the domestic industrial ecosystem and lead the global supply chain to make this opportunity ours.”

South Korea will increase tax breaks to 6 percent from the current 3 percent or lower for capital expenditures between second half of 2021 to 2024 for large corporations conducting “key strategic technology” including semiconductors, the Ministry of Trade, Industry and Energy said in a statement.

The government will offer about 1 trillion won in long-term loans for increasing 8-inch wafer chip contract manufacturing capacity and investment for materials and packaging. It also raised number of chip industry workers to be educated to 36,000 by 2030, more than double its previous target in 2019. “Setting up an environment where smaller fabless firms can thrive, with plenty of workforce and foundries, would naturally bolster system chip industry,” said Jinwook Burm, head of the Institute of Semiconductor Engineers.

In March, US President Joe Biden flagged plans to invest $50 billion in semiconductor manufacturing and research.

Chips are the No. 1 export item for South Korea, accounting for about 20 percent of exports.

Samsung, Hyundai Motor, the ministry and industry associations also agreed to join efforts to respond to auto chips’ shortage on Thursday, the presidential office said in its statement without providing details.


Sudan PM hopes to settle $60bn foreign debt this year

Updated 13 May 2021

Sudan PM hopes to settle $60bn foreign debt this year

  • ADB arrears paid with $425 million loan from U.K., Sweden and Ireland
  • The Paris Club of major creditors make up around 38 percent of foreign debt

Khartoum: Prime Minister Abdalla Hamdok hopes Sudan can wipe out its staggering $60 billion foreign debt bill this year by securing relief and deals at an upcoming Paris conference that could bring much-needed investment.
The seasoned UN economist-turned-premier took office at the head of a transitional government shortly after the 2019 ouster of president Omar Al-Bashir whose three-decade iron-fisted rule was marked by economic hardship, deep internal conflicts, and biting international sanctions.
In the past two years, Hamdok and his government have pushed to rebuild the crippled economy and end Sudan’s international isolation.
“We have already settled the World Bank arrears, those of the African Development Bank, and in Paris, we will be settling the International Monetary Fund arrears,” Hamdok told AFP at his office in Khartoum.
Arrears due to the African Development Bank were cleared through a bridging loan worth $425 million from Sweden, Britain and Ireland, while debts to the World Bank were paid off with a $1.1 billion bridging loan from the US.
“Paris also is home to the Paris Club, our biggest creditors... and we will be discussing debt relief with them,” Hamdok said.
Sudan’s debts to the Paris Club, which includes major creditor countries, is estimated to make up around 38 percent of its total $60 billion foreign debt.
Hamdok and top Sudanese officials will be attending Monday’s Paris conference along with by French President Emmanuel Macron, and World Bank and IMF representatives.
The aim is to draw investments to Sudan including in the energy, infrastructure, agriculture and telecommunications sectors.
“We are going to the Paris conference to let foreign investors explore the opportunities for investing in Sudan,” Hamdok said.
“We are not looking for grants or donations.”
Sudan was taken off Washington’s blacklist of state sponsors of terrorism in December, removing a major hurdle to foreign investment.
The government has also embarked on tough measures including subsidy cuts and introducing a managed currency float to qualify for an IMF debt relief program.
Though widely unpopular, the premier says the measures were necessary to move toward debt relief “by the end of the year.”
But many challenges still lie ahead.
His government has been pushing to forge peace with rebel groups to end conflicts in far-flung regions.
In October, it signed a landmark peace deal with rebels from the western region of Darfur as well the southern states of South Kordofan and Blue Nile.
Only two groups including one which wields substantial power in Darfur refused to sign the deal.
To Hamdok, the peace deal represents “50 percent on the road to peace.”
Efforts are underway to sign deals with the remaining groups, and talks with a faction of the Sudan People’s Liberation Movement-North (SPLM-N) are slated for later this month.
Hamdok acknowledged the slow pace of implementing the peace deal, but said Sudan is “steadily moving forward.”
In February, Sudan appointed three ex-rebels to the ruling sovereign council and announced a new transitional cabinet including seven ex-rebels.
“We have come a long way... and in my view the second stage of talks will go much faster.”
Simmering tensions with neighboring Ethiopia over a fertile border region and a gigantic dam on the Blue Nile pose another challenge.

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UK medical tech firm reveals Saudi expansion plans

Updated 13 May 2021

UK medical tech firm reveals Saudi expansion plans

  • Nemaura Medical has developed a diabetes-tracking wearable device
  • Product launches are planned for Germany, the UAE, and Saudi Arabia

RIYADH: A British medical technology company behind an innovative diabetes monitoring system has identified Saudi Arabia as one of its key target markets.

Nemaura Medical has developed a wearables device which can help diabetics track their blood glucose levels, and the Kingdom is high on the firm’s international expansion plans list.

Its sugarBEAT continuous glucose monitoring (CGM) product was recently launched in the UK and is targeted at people suffering from conditions such as diabetes who want a needle-free alternative.

Initially the company recorded orders of 200,000 sugarBEAT sensors in the UK and has forecast total sales of 2.1 million this year.

Following positive feedback in the UK, it has announced plans to expand internationally and is lining up product launches in Germany, the UAE, and Saudi Arabia.

Dr. Faz Chowdhury, the chief executive officer of Nemaura Medical, said: “We believe our technology is ground-breaking and represents a paradigm shift in the way people with diabetes can manage their condition.

“We believe we have a critical first-mover advantage with a product that is easier to use, more flexible, and more cost-effective than existing technologies. We are not aware of any product of a similar nature in clinical studies or that has been submitted for regulatory approval.”

Nemaura Medical was founded in 2011 and recently expanded into the wearables market to develop and commercialize devices which can help to monitor chronic diseases and health conditions without the need for needles.

The CGM market is a growing sector and according to the Allied Market Research company will be worth around $9 billion by 2027.

The potential market for devices such as sugerBEAT in the Middle East and North Africa (MENA) region is considered strong with data from the International Diabetes Federation (IDF) showing more than 39 million 20 to 79-year-olds in the region having the condition in 2019. The figure is expected to increase to 108 million by 2045.

The IDF has estimated that in Saudi Arabia 15 percent of the adult population has diabetes.


UAE, Seychelles create travel corridor for vaccinated travelers

Updated 13 May 2021

UAE, Seychelles create travel corridor for vaccinated travelers

ABU DHABI: The UAE and the Seychelles said that vaccinated people can travel freely between the two countries following the mutual recognition of vaccine certificates issued by their respective authorities.
Quarantine-free travel between the two nations is possible from May 13 as they look to boost tourism in the wake of the COVID-19 pandemic.
Travelers must show they have received both doses of a COVID-19 vaccine through a valid certificate from the relevant health authority.