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January 10, 2021

UAE-Qatar ties: Reopening of borders to benefit UAE and GCC economies

The reopening of land, air and sea borders between the UAE and Qatar is expected to see a surge in businesses between the two nations while the ending of a three-year standoff between Qatar and its immediate neighbours will benefit Qatar and GCC economies in the medium term, according to analysts.

“The reopening of borders will allow the recommencement of cross-border trade, services and travel that has been largely in hiatus since the embargo was imposed in June 2017, the diplomatic thaw is unlikely to have immediate material credit ramifications due to the limited intra-GCC trade linkages,” said Thaddeus Best an analyst at rating agency Moody’s.

According to Moody’s, the prolonged duration of the diplomatic spat, which provided Qatar with ample time to build trade and financial ties with new partners outside the GCC in the interim and thus the short-term impact on Qatar economy will be limited. It will nevertheless have some economic benefits for tourism and trade in the region at a time when both sectors are still reeling from the coronavirus shock.

Qatar’s main exports to the GCC, namely piped natural gas to the UAE through the Dolphin pipeline, continued undisrupted throughout the diplomatic dispute. Abu Dhabi National Oil Company (ADNOC) and Qatar Petroleum also renewed an oilfield concession in 2018 despite the embargo.

Tourism impact
The agreement will once again allow visitors to Qatar from Saudi Arabia, Bahrain and the UAE, which accounted for almost 40 per cent of total visitors prior to the dispute. Tourism is not a major contributor to the Qatari economy, accounting for around 9 per cent of GDP, and the pandemic will constrain near-term upside potential, Moody’s noted.

“That said, over the medium-term, the normalisation of relations will allow regional football fans, especially from Saudi Arabia, to attend the 2022 FIFA World Cup. It will also allow Qatar Airways to resume flights over the rest of GCC,” said Alexander Perjessy, an analyst at Moody’s.

Rating agency Fitch said the reopening of borders with neighbours will help Qatar’s battered non-oil economy.

“A resumption of travel links will eventually lift tourism inflows, and greater interest from regional buyers could support the real estate market, which has been in a multi-year downturn,” Krisjanis Krustins, Director, Sovereign Ratings, Fitch Ratings.

UAE and Saudi gains
The UAE – especially Dubai – and Saudi Arabia may benefit more from the reopening of trade, tourism and investment channels with Qatar given their tourism and real estate sectors, according to Moody’s.

However, the rating agency said these gains should be kept in perspective in the context that Qatari tourists accounted for about 1 per cent of Dubai’s visitors before the border closure although they accounted for a proportionately larger share of tourism receipts because of high income levels. As such, the reopening of borders will have limited impact on government revenue and overall fiscal performances across the GCC.

Qatar’s financial system could also benefit if lenders and depositors from the blockading GCC sovereigns return. The normalisation of relations could support renewed inflows of deposits and cross-border lending from the GCC, potentially reversing the decline witnessed since the dispute, but the relatively high average credit rating for Qatari banks has supported ample access to foreign funding regardless.

Source:https://gulfnews.com/business/uae-qatar-ties-reopening-of-borders-to-benefit-uae-and-gcc-economies-1.76372589

January 10, 2021

Bitcoin’s wild weekends turn efficient market theory inside out

Bitcoin just notched one of its best weeks on record, surging about 40 per cent over the seven days through Friday. Anyone expecting the notoriously volatile digital currency to take a breather this weekend had better buckle up.

It’s on Saturdays and Sundays, when most other assets barely budge, that Bitcoin tends to go particularly nuts. Take the first weekend of 2021. Coming off a 300 per cent gain last year, the world’s largest digital coin rose as much as 14 per cent Jan. 2 and another 10 per cent Jan. 3, a period when most of Wall Street was still in holiday mode. The swings were bigger than on any weekday in the prior two weeks and the biggest intraday moves since the weekend before, when it jumped 10 per cent on Dec. 26, according to Bloomberg data.

Bitcoin’s not alone in trading all day, every day. What sets the coin apart is how big its price swings are outside of established business hours. It’s tough to find pricing for the dollar, for example, with currency-market participants usually in agreement to take weekends off. Bitcoin’s average swing on Saturdays and Sundays during the fourth quarter, on the other hand, was 1.5 per cent.

Why weekend swings?
The cryptocurrency’s weekend volatility spikes owe to a couple of factors. One is that it’s held by relatively few people – about 2 per cent of accounts control 95 per cent of all available Bitcoin supply. If these whales trade when volumes are thin, price swings will be magnified. Another is its market structure, which consists of hundreds of disconnected exchanges that in effect are their own islands of liquidity.

“People always tout Bitcoin as 24/7, 365 liquidity, but what that actually means is you have periods of very thin liquidity,” said Nic Carter, a partner at crypto-focused venture firm Castle Island Ventures. “If you want to deploy $500 million of Bitcoin, you probably want to do it during core banking hours.”

The crypto market is relatively nascent. Bitcoin, the original crypto, brought forth the movement a little more than 10 years ago. According to Greg Bunn, chief strategy officer at digital-asset firm CrossTower, the market remains hugely fragmented from an infrastructure standpoint.

Many platforms operate under different standards and with “different philosophies,” said Bunn, who spent decades with firms including Citadel and Deutsche Bank. Yet it lacks a centralized market structure akin to that of traditional assets, which tend to have common means of custody and settlement, for instance.

“If you think about the structure, that makes it conducive to things that are going to be very volatile and where you’re going to have big moves,” he said. “That’s obviously going to be impacted by when people are trading, when people are awake, when people are watching the markets.”

To Binance.US’s Catherine Coley, Bitcoin’s wild weekend patterns are reminiscent of her time trading currencies in Hong Kong in the early 2010s. Volatility sometimes became subdued during lunchtime lulls and around holidays. Professional traders, she says, tend to keep Monday-through-Friday schedules, so it makes sense that liquidity – or how easily an asset can be traded – would wane on weekends.

Market liquidity factor
What’s seen as liquidity requires a steady supply of both buyers and sellers – an ease in freeing up the value of one asset for another. If there are fewer buyers than sellers – or vice versa – then that makes transactions harder, a situation that usually leads to either a spike or crash in prices. Last weekend, Bitcoin’s price was “absolutely ripping on low liquidity,” said Coley, who is Binance.US’s chief executive officer. “In these periods of illiquid times, you’re going to be getting pricing that is a little bit cushioned.”

That could mean someone with a large sell order can’t as easily unload a position over weekend trading. “To some extent, it’s going to be more difficult for them to offload the risk that they’ve got,” she said. “So that’s where you see these weekend moves of dramatic price spiking.”

No one knows for sure and theories explaining Bitcoin’s weekend action abound. Bitwise Asset Management’s Teddy Fusaro says it’s also possible liquidity providers and market-makers are lightly staffed on weekends, which can lead to volatility.

“It’s a feature of the market that has always been there and we expect that it will be a feature of the market that remains into the future,” Fusaro, the company’s chief operating officer, said. “Efficient market hypothesis people would assume that the market should price in the idea that there could be less liquidity on the weekends.”

Mati Greenspan, founder of Quantum Economics, says that while institutional players have been in the spotlight recently, retail investors could be re-entering the space again, as well. They played a big role in Bitcoin’s notorious 2017 run-up – and many got burned when it crashed the following year.

Source:https://gulfnews.com/business/analysis/bitcoins-wild-weekends-turn-efficient-market-theory-inside-out-1.1610251849100

January 10, 2021January 10, 2021

Emirates A380 premium economy debut is well timed, say experts

Emirates airline’s recent introduction of ‘premium economy’ seats is indicative of shrewd long-term decision making, according to experts.

The Dubai-owned airline announced on January 3 that it would deploy its latest flagship A380 aircraft featuring new premium economy seats and enhancements across all cabins to London Heathrow.

While the seats are not yet bookable, passengers flying on the daily EK003/004 flight can experience the new-look premium economy as a discretionary upgrade until more seats are rolled out commercially and at scale.

According to Tobias Rueckerl, president and CEO, Advanced Aviation Consulting Limited (AACL), Emirates would likely have had the plan in the offing for “three to four years” but now is a “good time” to roll out the Middle East’s first premium economy offering.

“This is might seem a strange time to launch this product but it’s not a bad move,” said Rueckerl.

“The pandemic has acted as a catalyst for [aviation] developments that have been coming to pass for years. More and more global airlines have decided to remove first-class products, upgrade business class products and install premium economy,” he said.

Global trends such as business teleconferencing and scaling back luxury corporate travel have been on the rise since the onset of the financial crisis in 2008, the aviation consultant said.

“After the crisis, many western companies changed their travel policies permitting employees to travel in economy only,” ” said Rueckerl. “First class was often filled with mile-collecting upgraders. In this context, it makes sense to re-think the cabins. In the coming years, business travel will become less important and leisure travel will become more popular.”

The AACL expert predicted that business and first-class cabins could be eradicated entirely in the coming years, making space for more low-cost airlines and products offering economy and premium economy.

Fascinating move
Andrew Charlton, managing director at Switzerland-based Aviation Advocacy, said the introduction of premium economy seats by Emirates represents a “fascinating” move.

“There is no doubt that post-pandemic business travel volumes will drop and travel budgets will be tightened, so a value-offer like premium economy may help,” he said. “After the pandemic, many people will want to visit their families or treat their relatives to special flights, so a reasonable upgrade offer might be a good call.”

Charlton predicts that in the coming years business travellers will take occasional longer, consolidated business trips rather than frequent trips.

Stealing a march on competitors
Saj Ahmad, chief analyst at London-based aviation consultants StratAero, said Emirate’s use of a solitary A380 to roll out its premium economy offering highlights that limited scheduling is an issue amid pandemic times.

“Until more airplanes with this cabin are made available for use, it is at Emirates’ discretion regarding who uses premium seats,” he said.

“At the same time, it does allow customers to get a first look at a new product: Emirates is the only GCC airline that has a premium economy suite and so the novelty factor will definitely be an eye-catcher for regular travellers.”

Ahmad added that Emirates has “stolen a march” on its Gulf rivals with its new offering.

“Once we’re through this pandemic, Emirates will have yet another string to its bow for engaging and enticing customers,” he said. “You have to wonder how Gulf competitors will sit on the sidelines before they develop and introduce their own versions.”

Major route
The heavily trafficked route between London airports and Dubai has been a growing battleground for global carriers in recent years.

The London Heathrow-Dubai route alone was the fourth busiest route in the world and attracted 3.4 million passengers in 2017, according to a RoutesOnline study.

The UK capital has historically been a leading aviation hub, providing convenient connections for Emirates passengers to the rest of the UK and wider Europe.

Last week, Sir Tim Clark, president Emirates, said: “The Emirates A380 is already one of the most sought-after travel experiences in the skies, and now we’ve made it even better. While others cut back, Emirates is working hard to restore the products and services that we’ve had to suspend or adjust due to pandemic precautions, and introduce new offerings and enhancements.”

The airline received its newest A380 aircraft from Airbus in December and its remaining order of five A380s will also be delivered with premium economy cabins over 2021 and 2022.

What’s in Emirates premium economy?
The premium economy cabin will have 56 seats in a 2-4-2 cabin layout.
With a pitch of up to 40-inches, Emirates’ premium economy seat is 19.5 inches wide, and reclines eight inches into a comfortable cradle position with ample room to stretch out.
Each seat has a 13.3″ screen, one of the largest in its class as well as easily accessible in-seat charging points, a wide dining table and side cocktail table.
Emirates premium economy is located at the front of the main deck, with two lavatories dedicated to customers.

https://www.arabianbusiness.com/transport/456931-emirates-premium-economy-rollout-is-well-timed-despite-pandemic-say-experts

January 10, 2021January 10, 2021

UAE hotel group boss sees tourism positives in new Qatar agreement

The CEO of UAE-based Rotana Hotels has said the Qatar accord will serve to accelerate the recovery of UAE’s hospitality industry as it gets back to its feet in the wake of the coronavirus pandemic.

The positive impact is likely to echo across several tourism-related sectors including aviation, retail, and hospitality, industry experts agreed.

“Following what was undoubtedly the toughest year on record for the hospitality industry, it is important to unite efforts to promote travel and tourism throughout the Middle East,” said Guy Hutchinson, CEO and vice president of Rotana Hotels.

“The restoration of ties between the UAE and Qatar will have numerous positive effects across many industries such as cross-border trade, investment, aviation, and travel & tourism sectors, accelerating the speed of recovery in 2021,” he continued.

The UAE joined Saudi Arabia, Bahrain and Egypt on Tuesday in signing an accord with Qatar during a summit of Gulf Cooperation Council (GCC) leaders, effectively ending a three-and-a-half year split between the countries.

While Dubai’s real estate sector is likely to reap the biggest benefits from the Qatar Accord in the long run, the emirate’s tourism sector could see a faster positive impact, said industry stakeholders.

“Dubai’s hospitality sector is more likely to see an immediate impact as Qatari tourists begin to return to the emirate. Whilst Qatari tourists were not so significant in terms of overall quantum of tourists visiting Dubai, accounting for 176,000 out of 14.9 million overnight visitors in 2016, their spending power and affinity towards luxury properties is likely to underpin stronger demand levels in this market segment,” said Taimur Khan, head of research at Knight Frank.

“More so, as both corporate and leisure inbound tourism increases we will also see the emirate’s retail and F&B sectors benefit from this trend,” he added.

Full recovery of Qatari tourism to Dubai, however, will be gradual given that multiple countries across the world continue to grapple with the pandemic.

“Qatar has, in the past, been a large market for the UAE. However, taking into account the new world norms, it will take time to return to the previous numbers,” said Hutchinson.

The aviation industry also stands to benefit from the restoration of ties with Qatar, with low-fare carriers Flydubai and Air Arabia expected to be among the big winners.

“The restoration of intra-Gulf links should feed through to lower fares and less flight time for travellers, providing a particular advantage to upcoming events such as Expo in 2021 and FIFA World Cup 2022, aiding to boost the overall GCC tourism sector,” explained Hutchinson.

Direct routes to and from Qatar, from Saudi Arabia, the UAE, Bahrain and Egypt, were halted as part of the country blockade implemented in June 2017. It meant passengers from the four countries travelling to or from Qatar were forced to take connecting flights, through Kuwait or Oman for example, while Qatar Airways was prevented from travelling over the respective airspaces.

That changed on Monday when Saudi Arabia lifted its ban and reopened its borders to Qatar and after the historic agreement was signed in Al Ula at the GCC summit on Tuesday, the other three countries are expected to follow suit.

Source:https://www.arabianbusiness.com/travel-hospitality/456954-uae-hotel-group-boss-sees-tourism-positives-in-new-qatar-agreement

January 10, 2021

How the coronavirus pandemic impacted salaries in the Gulf in 2020

Salaries for the majority of professionals working in the Gulf region were unaffected or positively impacted over the past 12 months, according to recruitment major Hays.

Its 2021 Salary & Employment Report delivered largely positive data for last year despite it being a year of “unprecedented change and challenges for the global jobs market” amid the coronavirus pandemic.

The report, which was compiled from a survey of more than 3,500 employers and employees from across the region, found that while 18 percent of salaries decreased in 2020 compared to 2019, 34 percent increased and 48 percent remained the same.

“As ever, when it comes to salaries, it has been a mixed picture for professionals in the region. With the outbreak of Covid-19 and associated movement restrictions enforced on all in our personal lives, it may be easy to assume that we were all similarly impacted in our professional lives but, as our survey shows, this is just not the case,” said Chris Greaves, managing director of Hays Gulf region.

The report found that of all the different job functions, IT and tech professionals experienced the greatest number of pay increases in 2020 (38 percent), while the lowest number of salary increases were paid to those in office support and administration roles (26 percent).

“Demand and salaries for tech professionals have been relatively high as, despite the challenges Covid-19 has brought to businesses this year, the need for automation is more crucial than ever in enabling organisations to remain competitive in their respective markets. Employers are willing to pay high salaries for the top tech talent to ensure they are setup as efficiently as possible for business going forward,” said Greaves.

He added: “In contrast, demand and salaries for office support and administrative roles have decreased as the pandemic forced the closure of many offices during lockdown and this, along with the shift to more home and remote working, has made many of these roles redundant.”

When comparing different industry sectors, telecoms, pharmaceuticals and life sciences, and banking and financial services were the three most robust industries in 2020, with only 6 percent of employees experiencing a pay cut.

In contrast, the four sectors which introduced salary reductions to the highest degree were aviation, hospitality and tourism, engineering, and property, with 34 percent of employees having their salaries reduced last year.

“It is of no surprise that these industries have been most negatively impacted by the Covid-19 pandemic. Lockdowns and threats of spreading the virus reduced tourism numbers overnight in March and there are still many barriers to travelling. Demand for oil and oil prices have therefore fallen and resulted in some significant cutbacks on fiscal and monetary policies of governments whose economies are somewhat reliant on the oil and gas industry – namely those in the Gulf. This has then seen many construction projects in the region go on hold or be cancelled altogether,” said Greaves.

Looking ahead
According to Hays, salary expectations for 2021 are optimistic with nearly half of employers (47 percent) planning to increase pay rates in the next 12 months. Similarly, 47 percent of employees expect their salary to increase in 2021, most commonly by 5-10 percent.

From our own experiences in the market, business activity really picked up across all sectors towards the end of 2020 and we believe this momentum will continue over the coming months, giving rise to a larger proportion of the working population receiving salary increases in 2021 compared to 2020,” noted Greaves.

He added: “Employers will undoubtedly be more cautious with spend on hiring and remuneration of staff than they were pre-pandemic but we believe that the worst impacts of the pandemic are behind us and organisations will only add to their headcount and reward staff going forward rather than freezing pay or making further redundancies.”

Source:https://www.arabianbusiness.com/jobs/456853-how-the-coronavirus-pandemic-impacted-salaries-in-the-gulf-in-2020

January 10, 2021

Gulf tourism losses due to coronavirus could reach $60bn

The Gulf’s travel and tourism industry may have lost up to $60 billion during 2020 due to the ongoing restrictions related to the global coronavirus pandemic.

Consultants Frost & Sullivan said in a new research report that the sector’s financial loss is expected to reach $50-50 billion, with hotels likely to account for up to $15 billion of the losses.

Frost & Sulllivan said the growth in the tourism and travel sector in the GCC region was about 10 percent during the past five years.

Based on this growth, it was expected that the entire spending on traveland tourism in the region would have reached $110 billion in 2020 but coronavirus dramatically changed things.

“As consumers step out of their homes, maybe for the first time since global lockdowns, they will still want the luxury of a hotel stay but would wish to limit their exposure to other guests beyond their families,” Frost & Sullivan said.

The consultants added: “While the industry is in the process of reinventing itself, it is prudent that the decision-makers understand the basics and ensure that it is not only done in the right areas but also with the right intent for the check-in bells to keep ringing and the footfalls to keep increasing. Understanding the consumer experience journey and innovating at every stage feasible, to make the consumer feel secure, will be the key.”

Dubai gradually reopened its tourism sector in July while Abu Dhabi delayed until last month to allow international visitors.

Saudi Arabia closed its air, land and sea borders again on December 20 following the spread of a new variant of Covid-19 and reopened on Sunday while Oman reopened on December 29

The research said the sector has seen growth in domestic tourism led by Saudi Arabia as most countries closed their borders to international visitors for long periods of the year.

It added that 65 percent of all hotels in the region are expected to adopt bio-bubbles – a safe and secure micro-environment, isolated from the outside world to minimise the risk of infection.

By design, it permits only authorised and accounted for people to enter the protected area after testing negative for the virus.

IPL T20 Tournament in UAE pioneered the bio-bubble and executed a tournament featuring 300+ participants across 24 matches in three cities with zero infections, the report noted.

Frost & Sullivan also said it expects the global cloud kitchen market to grow to $1 trillion by 2030, with operators having a strong foothold in the overhead heavy and predominantly urban GCC market.

“More people are staying home for extended periods as organisations adopt remote working to counter the virus effect. This is feeding demand for whatever industrial kitchens serve up and get F&B operators to deliver to homes around the country.

Plus, with residents less likely to visit crowded destinations, including restaurants, ordering-in has become a definitive need of the hour,” it said.

The report added: “In future, we will witness more experiments like ghost kitchens that can meet the growing demand for delivery… third-party delivery will be a trend that will replace the current staple of eating-out.”

https://www.arabianbusiness.com/travel-hospitality/456789-gulf-tourism-losses-due-to-coronavirus-could-reach-60bn

December 16, 2020

Saudi Arabia FDI up in first half of 2020 as economy shows resilience

Saudi Arabia’s Minister of Investment Khalid al-Falih said on Saturday foreign direct investment (FDI) increased by 12% in the first half of 2020 compared with the same period last year.

The Saudi government, which is hosting this year’s G20 summit, has made attracting greater foreign investment a cornerstone of its Vision 2030 plan to diversify the economy of the world’s largest oil exporter away from oil revenues.

“I’m glad to say that FDI, my area of focus, in the first half has been reported to increase by 12% compared to last year,” Falih, who previously chaired state oil company Saudi Aramco, told a G20 conference.

Falih said in September the kingdom had experienced a slowdown in FDI this year due to the global disruption caused by the COVID-19 pandemic.

“When I mentioned the 12% increase I wanted to assure people that there was no decline, our FDI target is much higher,” Falih said on Saturday.

As part of efforts to attract foreign investors, Saudi Arabia will launch next year special economic zones dedicated to several sectors, Falih said.

In addition to attracting higher investment volumes, it will focus on “qualitative growth”, he said, mentioning areas such as cloud computing, renewable energy, tourism, culture, entertainment, and logistics.

“These investments may have lower investment volumes but higher impact on the economy.”

Saudi Arabia is chairing a two-day summit this weekend of leaders of the 20 biggest world economies, who will debate how to deal with a pandemic that has caused a global recession and how to manage the recovery once it is under control.

Falih said the Saudi economy, which has been hit by the double blow of the pandemic and lower oil prices, had shown resilience this year and had a proven ability to withstand shocks.

Source:https://energy.economictimes.indiatimes.com/news/oil-and-gas/saudi-arabia-fdi-up-in-first-half-of-2020-as-economy-shows-resilience-investment-minister/79347925

December 16, 2020

Yemen rebels claim attack on Saudi oil facility in Jiddah

Yemen’s Houthi rebels said they struck a Saudi oil facility in the port city of Jiddah on Monday with a new cruise missile, just hours after the kingdom finished hosting its virtual Group of 20 leaders summit.

The kingdom did not immediately acknowledge any attack as videos on social media suggested a fire at an Aramco oil facility.

Brig. Gen. Yehia Sarie, a Houthi military spokesman, tweeted that the rebels fired a new Quds 2 cruise missile at the facility. He posted a satellite image online that matched Aramco’s North Jiddah Bulk Plant, where oil products are stored in tanks.

That facility is just southeast of Jiddah’s King Abdulaziz International Airport, a major facility that handles incoming Muslim pilgrims en route to nearby Mecca.

Online videos appeared to show a tank farm similar to the bulk plant on fire. Details of the videos posted predawn Monday matched the general layout of the bulk plant.

Saudi state-run media did not immediately acknowledge the Houthi claim. Saudi Aramco, the kingdom’s oil giant that now has a sliver of its worth traded publicly on the stock market, did not immediately respond to a request for comment.

The claimed attack comes just after a visit by outgoing U.S. Secretary of State Mike Pompeo to the kingdom to see Crown Prince Mohammed bin Salman. The kingdom also just hosted the annual G20 summit, which concluded Sunday.

A Saudi-led coalition has been battling the Iranian-backed Houthis since March 2015, months after the rebels seized Yemen’s capital, Sanaa. The war has ground into a stalemate since, with Saudi Arabia facing international criticism for its airstrikes killing civilians.

Source:https://energy.economictimes.indiatimes.com/news/oil-and-gas/yemen-rebels-claim-attack-on-saudi-oil-facility-in-jiddah/79364812

December 16, 2020December 16, 2020

Fuel supplies not affected by oil facility attack in Jeddah

Saudi Aramco said that the terrorist attack on its petroleum products distribution terminal in the port city of Jeddah had no effect on the company’s fuel supplies.

During a media visit to its oil facility in northern Jeddah, Aramco on Tuesday told reporters that the tank fire caused by the attack was put out in about 40 minutes and the operation resumed in about three hours, confirming there had been no casualties, Xinhua news agency reported on Wednesday.

“The supply to the customers was not affected at all. It only demonstrated the resilience and reliability of the company to ensure the energy’s continuous supply to its domestic and international customers,” said Abdullah al-Ghamdi, manager of the North Jeddah Bulk Plant.

According to al-Ghamdi, a projectile hit one of the 13 tanks in the facility, causing major damage to the tank roof with a hole of almost two by two meters.

The damaged tank remains out of action, he noted.

Serving diesel, gasoline and jet fuel, the North Jeddah Bulk Plant is a “critical facility” in the area that distributes around 120,000 barrels of products per day, al-Ghamdi said.

The Saudi Ministry of Energy said on Monday that a terrorist attack created an explosion and caused a fuel tank fire in the oil facility in Jeddah. The Saudi-led coalition later accused Yemen’s Houthi rebels of being behind the attack.

Source:https://energy.economictimes.indiatimes.com/news/oil-and-gas/fuel-supplies-not-affected-by-oil-facility-attack-in-jeddah-aramco/79409614

December 16, 2020December 16, 2020

Saudi Arabia may raise Asia crude prices in January – survey

Top oil exporter Saudi Arabia is expected to raise its official selling prices (OSPs) for Asian buyers in January, tracking stronger benchmark prices as some refiners increase output to meet higher winter demand, a Reuters survey showed.

Six sources at Asian refiners expect the January OSP for Saudi flagship crude grade Arab Light to rise by 65 cents a barrel on average, with their forecasts ranging between an increase of 50 cents and 85 cents.

Two of the sources forecasted bigger price increases for Saudi lighter grades than heavier ones, as they contain more middle distillates, gasoil and jet fuel, which were more profitable for refiners this month.

Strong demand for spot crude pushed up November’s average differentials to Dubai swaps for benchmarks cash Dubai and DME Oman by around 80 cents a barrel from last month, data compiled by Reuters showed.

Refiners such as Indian Oil Corp stepped up crude purchases in November as fuel demand recovered while weather forecasts were pointing to a harsher winter.

For other oil products, Asia’s cracks for very low sulphur fuel oil margins also strengthened in November , while gasoline and naphtha weakened due to ample supply.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

Source:https://energy.economictimes.indiatimes.com/news/oil-and-gas/saudi-arabia-may-raise-asia-crude-prices-in-january-survey/79491259