SINGAPORE: Oil prices edged higher on Thursday, supported by lower US inventories, as investors waited for a decision from key producers on whether they would maintain or ease supply cuts in the second half of the year.
Brent crude for September gained 17 cents, 0.2 percent, to $74.79 a barrel by 0355 GMT while the US West Texas Intermediate crude for August was at $73.68 a barrel, up 21 cents, or 0.3 percent, close to its highest since 2018 of $74.45.
WTI rose more than 10 percent in June while Brent added over 8 percent, touching highs since 2018, as summer travel picked up and more people got vaccinated.
Analysts had forecast a wider supply deficit globally in the second half as the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, maintained production cuts while demand rises.
OPEC+ is easing supply cuts between May and July by 2.1 million barrels per day and will meet on Thursday to decide whether to leave production unchanged or boost output, possibly by more than 1 million bpd or by a more modest 0.5 million bpd in August. The group is expected to also discuss whether to extend the supply reduction deal to beyond April 2022.
“Sideline discussions indicate that Russia is proposing to boost supply while Saudi Arabia wants a more cautious approach,” ANZ analysts said in a note.
Analysts at Citi bank said global oil market fundamentals should be robust enough to justify an easing of production cuts, adding that they were factoring a 1 million barrels per day (bpd) surge in OPEC supplies in August.
Even after accounting for higher OPEC+ production, Citi expects the market to remain in a deep deficit of more than 3 million bpd through the third quarter with a high probability of Brent hitting around $85.
However, outbreaks of the Delta virus variant are raising concerns demand recovery may falter. Renewed lockdowns and rising costs have already weakened momentum in Asia’s factory activities in June.
In the United States, crude stockpiles fell last week for the sixth straight week in response to rising demand, data from the Energy Information Administration showed.
A drop in crude inventories at Cushing, Oklahoma, the delivery point for WTI, to the lowest since March 2020 also underpinned the US benchmark, squeezing its discount to Brent
Brent was seen averaging $67.48 a barrel this year and WTI $64.54, both up from forecasts in May, a June Reuters poll showed.
Oil prices nudge higher before OPEC+ meet
https://arab.news/bpyz4
Oil prices nudge higher before OPEC+ meet
- OPEC+ is easing supply cuts between May and July by 2.1 million barrels per day
- WTI rose more than 10 percent in June while Brent added over 8 percent
Closing Bell: Saudi equities continue 4-day upward trend
RIYADH: Saudi equities closed higher on Wednesday, with the Tadawul All Share Index rising 51.52 points, or 0.47 percent, to finish at 10,945.15.
Trading activity was robust, with 373.9 million shares exchanged and total turnover reaching SR6.81 billion.
The MT30 Index also ended the session in positive territory, advancing 11.93 points, or 0.82 percent, to 1,472.82, while the Nomu Parallel Market Index declined 116.82 points, or 0.49 percent, to 23,551.47, reflecting continued volatility in the parallel market.
The main market saw 90 gainers against 171 decliners, indicating selective buying.
On the upside, Al Kathiri Holding Co. led gainers, closing at SR2.18, up SR0.12, or 5.83 percent. Wafrah for Industry and Development Co. advanced to SR23, gaining SR0.99, or 4.5 percent, while Al Ramz Real Estate Co. rose 4.35 percent to close at SR60.
SABIC Agri-Nutrients Co. added 4.21 percent to SR118.70, and Al Jouf Agricultural Development Co. climbed 4.12 percent to SR45.
Meanwhile, losses were led by Saudi Industrial Export Co., which fell 9.73 percent to SR2.69. United Cooperative Assurance Co. declined 5.08 percent to SR3.74, while Thimar Development Holding Co. dropped 4.54 percent to SR35.30.
Abdullah Saad Mohammed Abo Moati for Bookstores Co. retreated 4.15 percent to SR48.50, and Gulf Union Alahlia Cooperative Insurance Co. slipped 3.96 percent to SR10.44.
On the announcement front, Saudi National Bank announced its intention to issue US dollar-denominated Additional Tier 1 capital notes under its existing international capital programe, with the final size and terms to be determined subject to market conditions and regulatory approvals.
The planned issuance aims to strengthen Tier 1 capital and support the bank’s broader financial and strategic objectives.
The stock closed at SR42.70, gaining SR0.70, or 1.67 percent, reflecting positive investor reaction to the capital management move.
Separately, Almasane Alkobra Mining Co. said its board approved the establishment of a wholly owned simplified joint stock company to provide drilling, exploration and related support services, with a share capital of SR100 million and headquarters in Najran, subject to regulatory approvals.
The new subsidiary aligns with the company’s strategy to enhance operational efficiency and expand its role in the Kingdom’s mining sector.
Shares of Almasane Alkobra Mining closed at SR98.70, up SR0.30, or 0.3 percent, by the end of the session.
