SINGAPORE: Oil prices climbed for a third straight session on Friday, on track for a fifth consecutive weekly gain, as demand growth is expected to outstrip supply on bets that OPEC+ producers will be cautious in returning more output to the market from August.
Brent crude futures rose 6 cents, or 0.1 percent, to $75.62 a barrel at 6:46 a.m. GMT, heading for a 2.9 percent jump for the week.
US West Texas Intermediate (WTI) crude futures were up 5 cents, or 0.1 percent, at $73.35 a barrel, headed for a 2.4 percent weekly gain.
Both benchmark contracts settled at their highest levels since October 2018 on Thursday.
“Expectations of tightness in global market is the major factor supporting crude oil as demand is recovering while OPEC+ has constrained supply and US stocks are falling,” said Ravindra Rao, vice president for commodities at Kotak Securities.
Oil also got some support on Friday as the approval of US infrastructure bill boosted optimism for energy demand outlook, analysts said.
All eyes are on the Organization of the Petroleum Exporting Countries, Russia and allies — together called OPEC+ — who are due to meet on July 1 to discuss further easing of their output cuts from August.
“(The market) certainly has momentum behind it...It’s really in the hands of OPEC+,” said Commonwealth Bank commodities analyst Vivek Dhar.
On the demand side, the key factors OPEC+ will have to consider are strong growth in the United States, Europe and China, bolstered by vaccine rollouts and economies reopening, offset by rising COVID-19 cases and outbreaks in other locations, analysts said.
“I think OPEC+ will carefully calibrate production hikes from August onwards to meet rising demand without causing significant price fluctuations,” said Margaret Yang, a strategist at Singapore-based DailyFX.
“The market has likely priced-in an August hike in advance,” she added.
ANZ analysts have predicted OPEC+ would step up supply with a small increase of 500,000 barrels per day in August, adding to the 2.1 million bpd they agreed to return to the market from May through July.
The prospect of sanctions being lifted on Iran and more of its oil hitting the market anytime soon has dimmed, with a US official saying “serious differences” remain over a range of issues over Iran’s compliance with the 2015 nuclear deal.
Oil prices rise further on tight supply outlook, eyes on OPEC+
https://arab.news/y9nex
Oil prices rise further on tight supply outlook, eyes on OPEC+
- U.S. infrastructure bill brightens demand outlook - analysts
- OPEC+ meeting on July 1, seen cautious with easing output cuts
Saudi Aramco is looking at investment in new energies outside of the Kingdom, CEO says
DUBAI: Saudi Arabia’s state-oil giant Aramco is looking at investments right now in new energies outside of the Kingdom, CEO Amin Nasser said on Monday at the sidelines of a World Economic Forum special meeting held in Riyadh.
Malaysia targeting Gulf trade and tech ties at WEF, minister says
- Malaysia is also exploring investment and technology-sharing deals in artificial intelligence and the digital economy
RIYADH: Malaysia is looking to partner with Gulf-based companies on renewable energy, the country’s minister of investment has said.
Speaking to Arab News at the two-day World Economic Forum meeting in Riyadh, Tengku Zafrul Aziz said that about 50 Malaysian companies are in discussions to invest in renewable energy and share technologies.
“There is a lot of demand now for green renewable energy. We want partners who can not only go by funding, as we have funding capabilities, but also more in terms of technology and know-how,” he said.
“Many GCC companies who have already invested in this area are willing to share technology pools and invest with our funds, our companies, and our sovereign wealth fund.”
Malaysia is also exploring investment and technology-sharing deals in artificial intelligence and the digital economy.
“We also got interest from GCC companies on that matter and they have invested a lot in this technology. Now we want to learn and partner, so that the infrastructure that we build using digital platforms can be applied using applications that some of these companies already have.”
The World Economic Forum meeting in the Saudi capital is focusing on global collaboration, growth and energy for development — themes that the Malaysian minister said were “apt” given the geopolitical challenges in the region.
“This is a platform where we can share ideas about how we can improve the standards of living for all and not just focus on issues that may benefit a few,” he added.
“We want to see growth, especially in terms of trade and economy, and that must be beneficial to all. We want to see growth that is sustainable and equitable — growth that is inclusive. This is an opportunity to strengthen trade and investment linkages between the GCC and Southeast Asia.
“We need to strike the right balance when we talk about the quantity of the growth vs. the quality of that growth.”
Aziz said that parties are also exploring new multilateral trade agreements between the ASEAN union and the GCC, in an effort to launch a more comprehensive economic partnership agreement.
“This will deepen the relationship between countries in terms of economy, which will bring about peace. Malaysia is an open economy,” he said.
“While we continue to engage China as Malaysia’s largest trade partner, we are looking to engage other countries in constructive ways.”
SFD, AfDB sign deal to finance development initiatives in Africa
RIYADH: Emerging African economies are poised to receive a funding boost for growth initiatives following a deal involving the Saudi Fund for Development, aiming to foster sustainable progress.
The memorandum of understanding, signed with the African Development Bank Group, aims to promote mutual objectives and activities for sustainable international development between the two parties, the Saudi Press Agency reported.
This initiative aligns with SFD’s objective to enhance both social and economic growth by creating diverse opportunities.
Moreover, the newly signed agreement aims to facilitate the exchange of knowledge and experiences while advocating for optimal co-financing strategies. It will also support the attainment of sustainable development goals and optimize the impact of these initiatives.
Additionally, the MoU also aims to enhance collaboration in pursuit of shared goals that promote the expansion of crucial opportunities in diverse beneficiary African nations, ultimately contributing to global prosperity for the most impoverished and least developed communities.
Since 1975, SFD has played a significant role in strengthening sustainable development in emerging economies on a global level.
It focuses on improving living conditions, fostering knowledge development, capacity building, and providing job opportunities for individuals.
The fund has provided support and financing for over 800 projects and development programs, with a total value exceeding $20 billion.
These initiatives included a wide range of development and essential sectors that directly impact populations in over 100 developing countries.
In January 2023, the SFD ventured into the Caribbean region by signing an $80 million financing agreement for the expansion of the University of the West Indies at Five Islands in Antigua and Barbuda.
This funding was intended to be used to achieve sustainable development goals in the Caribbean, while also promoting scientific innovation and adding additional educational facilities to the university.
The financing agreement also included constructing seven energy-efficient buildings to accelerate the sustainability journey.
In May 2023, the fund signed two development loan agreements with Saint Vincent and the Grenadines, another country in the Caribbean.
The $6 million agreement was intended to fund the construction of a primary care center to improve the quality and resilience of the healthcare sector in the island nation. Additionally, the $10 million agreement was allocated to construct a cultural center and a market for craft and agricultural products in Belle Vue.
In August 2023, SFD laid the foundation stone to kick off the construction of the Mangoky Bridge in Madagascar, an island country lying off the southeastern coast of Africa.
For this project, the fund contributed $20 million as a soft loan, while the construction works also received assistance from institutions and development funds in the Arab Coordination Group and the government of Madagascar.
Upon completion, the Mangoky Bridge will connect the Atsimo-Andrefana and Menabe regions in Madagascar, and it is also expected to reduce the travel time between these two destinations, thus facilitating local farmers to get their produce to the market.
Saudi Central Bank and BIS co-host meeting on reserve management in Riyadh
RIYADH: The evolving global landscape presents new challenges and opportunities for central bank reserve managers, the governor of Saudi Arabia’s apex financial institution explained at a high-level meeting.
Speaking at an event in Riyadh which was attended by the Bank for International Settlements, Ayman Al-Sayari set out his view on the complexities of the current macro-financial environment.
The two-day gathering, which began on April 28, brought together reserve managers and experts from central banks in the Middle East and North Africa region, as well as participants from other apex financial institutions, to discuss the latest trends in managing foreign exchange reserves.
The event served as a platform for participants to exchange insights, perspectives and expertise on the most critical aspects of reserve management through a series of panel discussions and keynote speeches.
In March, SAMA’s monthly statistics bulletin revealed that foreign assets of Saudi Arabia’s commercial banks surged by 22 percent in February, reaching a total of SR347.63 billion ($92.7 billion) compared to the same month of the previous year.
This rise reflects a significant expansion in the commercial institutions’ international holdings and investments.
The central bank added that its net foreign assets reached SR1.55 trillion in February.
Central banks’ foreign holdings are primarily for reserve management and monetary policy purposes, while commercial banks’ foreign assets are for business operations, customer services, and investment activities.
The report added that Saudi Arabia’s total reserve holdings amounted to SR1.62 trillion, representing a five percent decline compared to the same month of 2023.
DIFC records $2.6bn in gross written premiums, highest figure in its 20-year history
RIYADH: Dubai International Financial Centre recorded its highest gross written premiums in its 20-year history, amounting to $2.6 billion in 2023, marking a 23 percent increase from the previous year.
DIFC, a global financial center in the Middle East, Africa, and South Asia region, connects the fast-growing markets of the region with global economies and offers dining, retail, and living amenities, according to its website.
The center also recorded a 20 percent increase in the registration of insurance and reinsurance firms, including the first move of a Guernsey-based captive.
The Emirates News Agency reported that DIFC “has consolidated its position as the principal hub for the (re)insurance industry,” adding that DIFC’s appeal for managing general agents, representing 43 percent of new registrations, is a major factor shaping its insurance landscape.
This is credited to the center’s well-established regulatory framework, facilitating partnerships with cedants and brokers.
The influx of global insurers, reinsurers, and brokers, as well as captives, MGAs, and other industry stakeholders into DIFC, is driven by several factors. These include buoyant oil prices and increased infrastructure spending, as well as a focus on sustainable projects and low insurance penetration in the region.
Among the notable entities to join DIFC’s insurance sector in the past year are Alif Limited, Arc Insurance and Reinsurance Limited, and Barents Risk Management Limited. Joining them are BharatRe Global Ltd. and many more, it added.
Arif Amiri, CEO of DIFC Authority, emphasized the center’s role as a global industry hub, hosting over 120 registered insurers, reinsurers, captives, MGAs, and related entities.
The significance of DIFC’s stature in the insurance domain is further underscored by its co-hosting of the Dubai World Insurance Congress, featuring discussions on key themes reshaping the industry’s future, including innovation, capital attraction, and talent development.
In 2023, a survey conducted at DWIC revealed an 87 percent confidence in the Middle East, Africa, and Southern Asia market’s strategic opportunities. Property, health, energy, cyber, and liability lines of business were identified as holding the most potential. The survey also highlighted an 85 percent confidence rate in renewals and client retention.
Over two decades, DIFC has fostered the growth of the insurance and reinsurance industry, attracting talent and expertise to access key markets in the Middle East, Asia, and Africa.
The center hosts major insurance brokers, five of which are top ranked by the specialized insurance credit rating agency, AM Best. This has contributed to a significant 61 percent increase in brokered premiums compared to 2022, surpassing the $2 billion mark and solidifying DIFC’s position as a global market for insurance and reinsurance placements.
