Oil Updates – crude set for weekly gain on signs of improving demand
Updated 17 May 2024
Reuters
NEW YORK : Oil prices gained on Friday, with global benchmark Brent set for its first weekly increase in three weeks on signs of improving global demand amid stronger economic indicators from key consumers China and the US, according to Reuters.
Brent crude oil prices climbed 21 cents, or 0.25 percent, to $83.48 a barrel by 6:14 a.m. Saudi time. US West Texas Intermediate crude futures rose 7 cents, or 0.09 percent, to $79.30 a barrel.
Brent futures are set to rise about 1 percent on a weekly basis, with WTI futures set to gain 1.4 percent.
“WTI crude oil prices seem to have found a near-term floor/support at around $78.40/barrel after a 9 percent+ decline from 26 April in the past week due to several encouraging factors such as two consecutive weeks of decline in US crude oil stockpile and more upcoming ‘piecemeal’ stimulus measures from China,” said OANDA senior market analyst Kelvin Wong, referring to the country’s potential program to buy up unsold homes directly from property developers.
Markets were also bolstered by China’s industrial output growth at 6.7 percent year-on-year in April as recovery in its manufacturing sector gathered pace, pointing to possibly stronger demand to come.
Declines in oil and refined products inventories at major global trading hubs have also created optimism over oil demand growth, reversing a trend of rising stockpiles that had weighed heavily on crude oil prices in prior weeks.
Recent economic indicators from the US have fed into the optimism over global demand. US consumer prices rose less than expected in April, data showed on Wednesday, boosting expectations of lower interest rates in the country.
Those expectations were further bolstered by data on Thursday that showed a stabilizing US job market.
Lower interest rates could help soften the US dollar, which would make oil cheaper for investors holding other currencies and drive demand.
On the supply side, investors were mostly looking for direction from an upcoming OPEC+ meeting on June 1, which will likely be held online.
An extension of OPEC+ cuts in oil output beyond June is likely to see firmer prices in the medium term, said OANDA’s Wong.
ANZ analysts said in a client note: “We see three possible scenarios for the outcome of the 1 June meeting: extend, unwind or complete removal of the voluntary cuts of 2.2mb/d. Our current model is based on a gradual unwinding of the cuts in H2 2024. Even with that, we see the market moving into a deficit, with the future call on OPEC production well above current output.”
Kuwait expects 12% rise in budget deficit to $20bn for 2025-2026
Updated 03 February 2025
Mohammed Al-Kinani
JEDDAH: Kuwait’s government projected its budget deficit to rise by 11.9 percent to 6.31 billion Kuwaiti dinars ($20.4 billion) for the fiscal year 2025-2026, up from the 5.6 billion dinars shortfall estimated for the current fiscal period.
The Cabinet approved the draft budget on Feb. 2 for the upcoming fiscal year, which will be submitted for final approval by the Emir, Sheikh Meshal Al-Ahmed Al-Sabah.
In a brief statement following an extraordinary meeting, the Cabinet noted that the government expects revenues to total 18.2 billion dinars, a decrease from the 18.9 billion dinars forecast for 2024-2025. Expenditures are projected at 24.5 billion dinars, slightly lower than the 24.6 billion dinars allocated for the current year.
This comes amid growing economic challenges in Kuwait, with a recent report from the International Monetary Fund forecasting a 2.8 percent contraction in 2024, followed by a recovery in 2025. The IMF highlighted risks related to oil dependence and delays in reforms, though it also noted signs of recovery in the non-oil sector despite a contraction in the oil sector.
Despite the projected deficit for the full fiscal year, Kuwait posted a budget surplus of 150.4 million dinars in the first half of 2024-25, according to Finance Ministry figures released in November. The surplus was attributed to higher revenues and reduced spending.
The draft budget for the period from April 1, 2025, to March 31, 2026, includes projected oil revenues of 15.3 billion dinars, reflecting a 5.7 percent decline from the current budget. Non-oil revenues are expected to rise by 9 percent, reaching 2.92 billion dinars, as stated by Minister of Finance and Minister of State for Economic and Investment Affairs Noura Al-Fassam.
The finance minister stated that total estimated revenues decreased by 3.6 percent, with oil revenues, estimated at 15.3 billion dinars, falling by 5.7 percent for the current budget ending on Mar. 31, 2025.
She added that wages and subsidies are expected to account for 79.5 percent of total spending, with capital expenditures estimated at just 9.1 percent. Additionally, non-oil revenues are projected at 2.92 billion dinars, reflecting a 9 percent increase from the current budget.
The finance minister noted that the government is budgeting for an oil price of $68 per barrel for the upcoming fiscal year, although the breakeven price needed to cover the fiscal deficit is pegged at $90.5 per barrel.
Saudi CMA, Insurance Authority forge partnership to strengthen sector oversight
Deal aims to strengthen oversight for insurance firms listed on the Saudi financial market
It also seeks to ensure role integration and consistency between the two authorities
Updated 03 February 2025
REEM WALID
RIYADH: Saudi Arabia’s insurance sector is set to see improved supervision and enhanced growth prospects following a new agreement between the Kingdom’s Capital Market Authority and the Insurance Authority.
The memorandum of cooperation aims to strengthen oversight for insurance firms listed on the Saudi financial market, while also fostering greater stability and growth within the sector, the Saudi Press Agency reported.
This aligns with the expected growth of Saudi Arabia’s insurance market, which is projected to reach a gross written premium of $19.27 billion this year, according to German data gathering platform Statista.
While the US is expected to generate the highest gross written premium at $3.93 trillion, Saudi Arabia’s market is witnessing rapid growth, driven by economic development and increasing awareness of the need for insurance protection.
The newly signed memorandum aims to ensure role integration and consistency between the two authorities, supporting the Kingdom’s Vision 2030 goals of developing the financial sector to meet its economic and developmental objectives.
Medical insurance was a key driver of overall growth, with revenues rising by 13.6 percent, largely due to the government’s implementation of mandatory health coverage regulations, according to the analysis.
Motor insurance also saw a significant boost, with revenues up 22.7 percent year on year, the report said.
The analysis added this growth was tied to an expanding auto market and regulatory measures ensuring compliance with insurance requirements.
The property and casualty insurance segment also experienced strong growth, with a 20.4 percent increase in revenues, reflecting the ongoing expansion of infrastructure and real estate projects across Saudi Arabia.
The growth comes as the Kingdom’s regulatory body is working to improve the sector’s efficiency and stability while supporting local infrastructure and fostering a thriving business ecosystem, the analysis said.
Saudi Arabia, Germany ink 200k-tonnes green hydrogen export deal
Updated 03 February 2025
Nadin Hassan
RIYADH: Saudi Arabia and Germany have signed an agreement to export 200k tonnes of green hydrogen annually from the Kingdom to Europe by 2030, strengthening their clean energy partnership.
The memorandum of understanding was inked between ACWA Power and the German energy trading company SEFE, and will see the Saudi company serve as the developer, investor, and primary operator of green hydrogen and ammonia production assets.
SEFE will act as a co-investor and key buyer and will be responsible for marketing the green hydrogen to its customers in Germany and Europe.
The deal was signed during a meeting between the Kingdom’s Minister of Energy Prince Abdulaziz bin Salman and German Minister of Finance Jorg Kukies.
The agreement is part of the ongoing Saudi-German Energy Dialogue, and focuses on green hydrogen production, processing, and transportation.
This aligns with Saudi Arabia’s strategic push for clean energy, reinforcing the initiative’s goal to advance collaboration in renewables and hydrogen technologies while solidifying the Kingdom’s role in the global energy transition.
During the meeting, both sides explored areas of mutual interest in the energy sector, particularly clean hydrogen initiatives, building on the MoU signed between the two nations in 2021. This marks a continuation of Saudi Arabia and Germany’s growing energy cooperation following the agreement.
“By combining ACWA Power’s proven expertise in green hydrogen production with SEFE’s extensive market knowledge, we are forming a strong partnership to deliver substantial quantities of green hydrogen to Germany and beyond,” Marco Arcelli, CEO of ACWA Power, said in a statement.
He added: “This is contributing to global decarbonization efforts, European security of supply by offsetting gas demand, and industrial demand preservation in Europe by making available the most competitive green energy.”
Egbert Laege, CEO of SEFE, described the partnership as perfectly embodying the firm’s dual ambition of securing Europe’s energy supply while driving the energy transition.
“By expanding our green hydrogen portfolio and investing in local production, we are equipping ourselves with solutions to help our customers achieve decarbonization,” he said.
Saudi Arabia is ramping up efforts to establish itself as a global leader in green hydrogen production and exports by leveraging its vast renewable energy resources, particularly solar and wind, which, due to its high solar irradiance, enable more efficient and cost-effective hydrogen production than countries like Germany.
Round table talks
Aside from the MoU signing, the German finance minister met with the Kingdom’s Minister of Finance Mohammed Al-Jadaan following a Saudi–German roundtable meeting in Riyadh.
In a post on X, Al-Jadaan said the two discussed “the most prominent global financial and economic developments.”
كما سررت اليوم بلقاء معالي وزير المالية الألماني الدكتور يورغ كوكيس، لمناقشة أبرز التطورات المالية والاقتصادية العالمية، وبحث المواضيع ذات الاهتمام المشترك.
I was also pleased today to meet with His Excellency the German Minister of Finance, Dr. Jörg Kukies, to discuss the most… pic.twitter.com/7QUKOEyH71
— محمد عبدالله عبدالعزيز الجدعان | Mohammed Aljadaan (@MAAljadaan) February 2, 2025
The roundtable was attended by a number of the largest private sector firms from both nations.
Saudi Arabia’s Ministry of Investment, National Center for Privatization, and the Financial Sector Development Program reviewed the investment opportunities available for German companies.
The roundtable also saw a focus on how human capital expertise in both conventional and renewable energy, and the industrial and manufacturing strength of Germany, are part of the ongoing relationship that contributes to achieving the goals of Vision 2030.
The German finance minister also held talks with the Saudi Minister of Economy and Planning Faisal Al-Ibrahim, with the pair discussing areas of economic, trade, and investment cooperation between the two countries, according to the Saudi Press Agency.
A further meeting involved the Kingdom’s Minister of Commerce Majid Al-Kassabi and Kukies, with the Saudi official posting on X that the pair talked about “strengthening the Kingdom’s economic and trade cooperation and developing promising opportunities in our two friendly countries.”
RLC Global Forum to address the future of Saudi Arabia’s retail landscape
Updated 03 February 2025
Nadin Hassan
RIYADH: Over 100 speakers from more than 600 organizations will convene at the Retail Leaders Circle Global Forum 2025 in Saudi Arabia to discuss collaboration amid digital innovation and economic reforms.
The two-day event, taking place from Feb. 4-5 at the Fairmont Hotel in Riyadh, will bring together industry executives, policymakers, and investors to explore strategies for navigating a rapidly changing retail landscape.
Themed “Rebuilding a Shared Future,” the event aims to address how the sector can rebuild trust and cooperation while adapting to digital transformation, shifting consumer behaviors, and new regulatory frameworks.
This year’s forum comes as Saudi Arabia’s retail sector continues to show strong resilience and sustained growth, with total sales reaching SR37.4 billion ($9.97 billion) in the third quarter of 2024, despite ongoing global economic uncertainties.
Retail sales in the Kingdom are forecast to reach $161.4 billion by 2028, according to data platform Statista, while the e-commerce sector is projected to surpass $13.2 billion by 2025.
“Saudi Arabia’s Vision 2030 is really shaking up the retail sector, and we’re seeing exciting changes across the board,” said Panos Linardos, chairman of the RLC Global Forum, in an interview with Arab News.
He pointed out that retail is a key pillar of the Kingdom’s diversification efforts, and “it’s evolving rapidly with digital transformation, regulatory changes, and shifting consumer expectations.”
Linardos added: “There’s a lot of opportunity ahead, but also some challenges that need to be tackled to fully unlock the sector’s potential. That’s where the RLC Global Forum comes in.”
RLC is an invitation-only platform that brings together industry leaders, policymakers, and innovators to discuss key issues shaping the retail sector.
Some of the partners involved include Diriyah Co., Apparel Group, and Cenomi Centers, the largest owner, operator, and developer of contemporary lifestyle centers in Saudi Arabia.
Chalhoub Group, and Panda Retail Co. are also set to attend.
Panos Linardos, chairman of the RLC Global Forum. Supplied
The event provides data-driven research, thought leadership, and best practice sharing, in line with Saudi Arabia’s Vision 2030, which seeks to diversify the economy and position the Kingdom as a global retail and business hub.
“Retailers in Saudi Arabia face several challenges, such as competition from cross-border e-commerce, changing consumer expectations, and regulatory complexities,” Linardo said.
To stay competitive, he added that retailers need to “embrace digital transformation, adopt omnichannel strategies, and use data to better understand and serve their customers.”
The Kingdom’s retail sector is experiencing significant growth and investment opportunities, driven by Vision 2030 and the accelerated digital transformation.
The demand for seamless shopping experiences and experiential retail concepts continues to rise, driving expansion in e-commerce, lifestyle destinations, and mixed-use developments.
“Mega-projects like NEOM, ROSHN, and Diriyah Gate are also fueling demand for high-end retail and hospitality-focused shopping experiences, making the market even more attractive,” Linardos said.
The forum chairman mentioned that the growing focus on smart retail solutions, AI-driven insights, and sustainable practices is creating new opportunities for forward-thinking investors.
Strengthening investment climate
Saudi Arabia’s retail sector continues to attract international investors, supported by progressive economic reforms and policies aimed at fostering a transparent and competitive market.
The Kingdom has made significant strides in streamlining regulations, enhancing investor protections, and reducing barriers to entry, creating an environment that encourages long-term growth and foreign direct investment.
“Saudi Arabia’s booming investment landscape is no accident. It’s the result of deliberate efforts to create a business-friendly and secure environment, supported by policies and reforms that align with global investment standards,” Linardos said.
He mentioned that the International Monetary Fund had described the new law as a game-changer, offering equal opportunities to both Saudi and foreign investors, along with stronger protections and clearer rules of engagement.
Linardos explained that the challenge now is getting the word out — building investor confidence and showcasing Saudi Arabia’s retail market as a high-potential, forward-thinking destination.
Future of retail innovation
The rapid integration of artificial intelligence, data analytics, and predictive modeling is transforming the global retail landscape, and Saudi Arabia is no exception.
RLC will also explore how businesses can leverage AI to optimize operations, enhance customer engagement, and drive new business models.
“Innovation and technology are reshaping Saudi Arabia’s retail sector in a big way. AI and e-commerce are no longer just buzzwords — they’re driving real change,” Linardos said.
He pointed out that AI is providing businesses with deeper insights into consumer behavior, enhancing inventory management, and enabling more personalized marketing.
“At the same time, e-commerce is making shopping more convenient and accessible, with digital payment solutions and omnichannel strategies creating seamless experiences that meet rising customer expectations,” Linardos added.
The chairman further highlighted that for retailers, integrating advanced technologies is no longer optional but a necessity in an increasingly competitive and fast-evolving market.
In essence, he added, businesses that embrace innovation early can unlock new growth opportunities, expand their customer reach, and strengthen their market position.
Unlocking full value
Saudi Arabia’s e-commerce sector is rapidly expanding, fueled by a digitally engaged population, rising consumer demand, and the government’s commitment to digital transformation, with Linardos noting the Kingdom’s emergence as one of the region’s most promising e-commerce markets.
Industry experts highlight the growing influence of social media, mobile commerce, and fintech solutions, which are reshaping how consumers shop and engage with brands.
“The Kingdom’s high social media engagement and widespread mobile use also make it a prime market for further e-commerce expansion and investment,” said Linardos.
However, he acknowledged that challenges persist, pointing out that “cross-border platforms dominate a large share of the market,” while traditional retail remains deeply embedded in consumer habits.
To fully realize Saudi Arabia’s e-commerce potential, industry leaders stress the importance of creating a balanced competitive landscape, strengthening omnichannel strategies, and integrating online and offline shopping experiences.
What’s next?
As Saudi Arabia’s retail sector undergoes transformation, Linardos expects the industry to move beyond traditional retail models in the coming years, placing greater emphasis on lifestyle-oriented concepts, integrated retail-tourism experiences, and cutting-edge digital innovations.
“The growth won’t just come from more stores or online platforms — it will come from creating unique, immersive experiences that blend culture, entertainment, and commerce in ways that haven’t been seen before in the region,” he added.
Linardos also explained that the challenge for retailers will be to remain flexible, embracing innovation while maintaining a strong local connection.
Those who can strike the right balance — leveraging technology, data, and customer insights — will not only grow but also redefine what retail means in Saudi Arabia, he said.
GCC equity markets post monthly gains in January: Markaz
Kuwait’s All Share Index posted a monthly gain of 5.7%, Saudi Arabia’s equity market grew 3.1%
Abu Dhabi’s equity index rose 1.8%, Qatar Stock Exchange increased by 0.9%
Updated 03 February 2025
Nirmal Narayanan
RIYADH: Equity markets in the Gulf Cooperation Council countries saw strong growth in January, with Kuwait and Saudi Arabia emerging as top performers, according to an analysis.
In its latest report, Kuwait Financial Center, also known as Markaz, said the substantial increase in the equity markets of Kuwait and the Kingdom pushed up the S&P GCC Composite Index by 3 percent last month.
Kuwait’s All Share Index posted a monthly gain of 5.7 percent in January, followed by Saudi Arabia’s equity market which grew by 3.1 percent during the same period.
The S&P GCC Composite Index’s performance in January was higher than the S&P 500 indices, which expanded at 2.7 percent, and the MSCI EM index, which posted a growth of 1.7 percent. The MSCI World Index grew by 3.5 percent.
GCC Markets: A Strong Start to 2025
Kuwait’s All Share Index soared 5.7% in January, fueled by robust banking earnings and strong investor confidence.
Saudi’s TASI climbed 3.1%, driven by optimism around corporate earnings and economic growth. @marmoremena#Markazpic.twitter.com/ejN2HcdwEP
“Kuwait equities outperformed global and GCC markets driven by the anticipation of strong earnings of banking stocks and the increased deal activity in the energy and real estate sectors, with most sectors closing the month in positive territory,” said Markaz.
Abu Dhabi’s equity index rose by 1.8 percent, Dubai’s index grew by 0.4 percent, and the Qatar Stock Exchange increased by 0.9 percent in January.
Bahrain’s index fell by 5.4 percent due to the decline of Aluminum Bahrain stock by 18.5 percent after officially terminating a proposed deal with the Saudi Arabian Mining Co.
Kuwait’s equity market growth was supported by the movement in key sectors like oil and gas and real estate, which expanded by 11.7 percent and 11.1 percent, respectively, according to the report.
Last month, Saudi Telecom Co. was the top gainer in Tadawul, with the company’s share price rising by 8.7 percent.
Gold surged 6.8% in January, as investors sought safe-haven assets amid market volatility.
STC Bank, the financial arm of stc Group, received a non-objection certificate from the Saudi Central Bank to commence its banking operations in the Kingdom.
STC Bank is the first licensed digital bank in the Kingdom and the latest approval aligns with the financial institution’s strategy to promote digital transformation and competitiveness within the banking sector while safeguarding monetary and financial stability, SAMA said in a press statement at the time.
Saudi Arabia’s Etihad Etisalat Co.’s share price surged by 8.4 percent, while the stock price of energy giant Saudi Aramco dipped by 0.9 percent due to a delay in phasing out OPEC+ cuts.
Markaz added that Brent crude oil closed the month at $76.8 per barrel, marking a 2.8 percent increase from December.
Interest rate policies will be a key market driver, with the Fed’s stance influencing liquidity flows into emerging markets.
“This move was driven by the US energy sanctions against Russian entities. Further clarity on (US President Donald) Trump’s trade policies, possible increase in production from the US, and the recovery of demand from China will determine the further course of oil prices,” said the report.
Gold prices also increased by 6.8 percent month on month, closing at $2,759.3 per ounce.
The analysis said that the outlook of global asset classes in the coming months could be shaped by Trump’s trade policies and possible changes in the US Fed’s rate cut trajectory.
“With China being in the crosshair of Trump’s tariffs, oil prices could take a hit if the demand recovery from China weakens. Weakness in oil prices could alter OPEC+ plans to unwind production cuts, which would in turn affect GCC economies and markets,” the report added.
