The initial public offering (IPO) of “SAL Saudi Logistics Services” has taken the financial world by storm.
In this article, we’ll delve deep into this remarkable event, shedding light on the tremendous investor interest, the pivotal role of HSBC Saudi Arabia, and what makes this IPO stand out in the Kingdom of Saudi Arabia.
The IPO of SAL Saudi Logistics Services witnessed a tremendous response right from the outset. Individual investors displayed extraordinary enthusiasm, with the subscription coverage reaching an astonishing 16.1 times the number of shares offered. This translated into a substantial investment of 254.4 million Saudi Riyals, underlining a strong belief in the company’s potential.
The resounding success of this IPO can be largely attributed to individual investors who showed unwavering confidence in “SAL Saudi Logistics Services.”
The IPO’s remarkable start with high subscription coverage sets a positive tone for its future performance.
HSBC Saudi Arabia: The Architect of Success
HSBC Saudi Arabia played a pivotal role in orchestrating the triumph of this IPO. Acting as the financial advisor, subscription manager, and underwriter, HSBC played a crucial part in ensuring the seamless execution of the IPO.
The involvement of HSBC in this IPO adds a layer of trust and credibility. The institution’s global reputation and vast experience in financial matters further solidify the investors’ faith in the offering.
HSBC effectively managed the allocation of shares to individual investors, ensuring each subscriber received a minimum of two shares. Additional allocations were based on the size of the subscriber’s request, reaching up to 1.9805% on a proportional basis. This strategy ensured a wide range of individual investors could participate in the offering.
HSBC’s role in share allocation guarantees a fair and equitable distribution among individual investors, irrespective of the size of their investments.
The Numbers Speak
To gauge the extent of investor interest, let’s look at the numbers. The company offered a total of 2.4 million shares to individual investors, constituting 10% of the total shares available in the IPO. This 10% allocation also represents 30% of the company’s overall share capital.
The offering’s price per share was set at 106 Saudi Riyals, leading to a company valuation of 8.48 billion Saudi Riyals upon listing. This valuation reflects the market’s unwavering confidence in “SAL Saudi Logistics Services.”
Institutional investors also expressed significant interest in the IPO. Subscription requests from institutions reached an astounding 182.4 billion Saudi Riyals, indicating an oversubscription of approximately 72 times. This high level of institutional interest underscores the broader market’s belief in the company.
Comparing the Success
To grasp the magnitude of this IPO, it’s essential to compare it to other economic events in the Kingdom of Saudi Arabia. Notably, it is the second-largest IPO on the Saudi stock market this year, following “Adiyat,” which had a size of 4.6 billion Saudi Riyals. This comparison highlights the significance of investor interest in new shares and emphasizes the growing confidence in the Saudi financial market and emerging companies like “SAL Saudi Logistics Services.”
SAL’s IPO has achieved a remarkable feat by becoming the second-largest IPO of the year. This success reflects not only the company’s potential but also the resilience of the Saudi financial market.
The robust investor interest in new shares bodes well for emerging companies in Saudi Arabia. This overwhelming response paves the way for more businesses to explore IPOs, boosting the country’s profile as a prime investment destination.
Turkey seeks cooperation with the Kingdom of Saudi Arabia to transfer energy to Europe.
In the context of Turkey’s endeavor to strengthen relations with
the Kingdom of Saudi Arabia and other countries,
Turkey’s plan focuses on being the center for exporting energy to Europe,
according to the statements of the Turkish Finance Minister,
adding that Turkey’s strategic location in terms of geographical
advantage is heard to be the corridor of energy from Saudi Arabia.
To Russia that this will reduce the high cost and safe shipping,
as he indicated the necessity of cooperation with the Saudi side,
which contributes to the stability of the region,
and this saves a lot in energy and gas prices and will lead to forward aspirations
Saudi imports from the Turkish side witnessed a significant decline in 2021 to the lowest levels in 38 years,
and the volume of trade exchange between the two countries declined during 10 years to 16.7 billion riyals,
and since then, the two countries have been seeking to strengthen relations
again in various fields and attract more investments,
This came after a visit by Turkish President Recep Tayyip Erdogan in April,
which was the first visit since 2017, in the context of correcting the course of relations between the two countries again,
and one of the main reasons for the tension in
relations was the case of the murder of journalist Jamal Khashoggi in the Saudi consulate in Turkey.
Strengthening open relations between the two parties
During the coming periods, the pace and cooperation of Saudi Arabia and Turkey will increase,
and the field will be open after the Kingdom’s plan under the slogan
“The Kingdom’s Vision 2030” and also Turkey for the year 2023,
where it will be transferred to a new stage of cooperation and we will contribute to achieving peace
and prosperity in the vicinity of the region, in addition to supporting the Turkish side to Saudi Arabia.
And also the two countries efforts to fight terrorism, so the two sides seek to strengthen relations,
investments, and trade, and Turkish relations extended to strengthening trade exchange
and cooperation also with the UAE side and an economic partnership
that facilitates business and reduces customs duties as well,
and this is a prelude to a new beginning of the era that includes cooperation
article name Turkey seeks cooperation with the Kingdom of Saudi Arabia
Expectations of a Fed rate hike to 5% could cause a global recession.
The idea of raising interest rates remains to dominate the minds of Fed officials,
whatever its consequences. It is expected that the meeting that
will be held next week will carry with it a wave of economic paralysis,
as it is certain that they will not abandon the decision to raise interest rates,
which will reach nearly 5% during March 2023.
This would create a recession that would sweep
the entire world and not only the United States of America,
as mentioned by the most important economists.
The Fed meeting will be held next Wednesday at two o’clock Washington time
According to a Bloomberg survey, the committee is expected to raise the interest
rate by another 75 basis points for the fourth time in a row,
due to the rise in employment costs that appeared on Friday,
and the move away from the goal of satisfaction from the desired inflation situation.
One of the most important reasons for the Fed’s decision to raise interest rates again.
From the point of view of economic analysts,
it is difficult for the Fed officials to abandon their hard-line positions
in abandoning the interest rate hike to fight inflation,
which has reached its peak for nearly 40 years.
Point during the two successive meetings, according to what the committee stated
that 4.4% is the committee’s goal for this year,
and 4.6% will be reached during the next year before the start of the reduction,
which will start during 2024, which may cause a global recession during the coming period,
and unemployment may also worsen as well.
Fed Chairman Powell mentioned that fighting inflation by raising interest rates will be a not easy job.
Most of the Fed officials agreed that the next two years will cause the markets a major recession
with a period of zero or negative growth in the future.
This was the result of the expectations of the poll conducted before the Fed official’s meeting.
Perhaps history will repeat itself and the same goals of the eighties,
when the interest rate reached its highest levels, from the point of view of economists
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That the Fed may be excessively
tightening its monetary policy as economists’ expectations
put the average peak target interest rates at 4.75% and that 75% of economists have warned
that there is a greater risk that the central bank will increase interest rates significantly,
and cause unimaginable burdens. Unnecessary, instead of not raising it enough,
and thus failing in the desired goal, which is to control inflation,
which has reached its peak during the past forty years.
Expectations are different among event readers, some expect 50 basis points,
and others expect 75 points. As for investors, they expected the second option,
the 75, and it is expected that the interest rate will reach 4.8 next December,
but if the Federal Reserve raises the interest rate again by seventy-five Next week,
the total of 375 basis points increases since last March,
will be the Fed’s biggest rate
hike since the 1980s when Volcker was Fed chair and was grappling
with high inflation like those days when The United States of America is going through
while it is attempting to reduce the Federal Bank of assets to 1.1 trillion dollars annually,
and economists expect the balance sheet to reach eight and a half trillion dollars
at the end of this year and will decline to 6.7 trillion dollars in December 2024,
when the Fed begins to return to the tightening policy cash gradually.
article name Turkey seeks cooperation with the Kingdom of Saudi Arabia
Amazon declines in market value to less than a trillion dollars
in light of the slowdown in growth in the fourth quarter of 2022.
The “Amazon” earnings report, which was disappointing and greatly disappointing about the future outlook,
caused investors to sell the shares of the technology giant,
as the market value of “Amazon” fell to less than a trillion dollars.
Amazon stock recorded a decline of about 12%, in light of the expectations of technology companies
to slow down in profits during the last quarter of this year 2022,
and Amazon stock recorded a decline of 21% at the end of trading last week,
thus the company joins the rest of the technology sector companies that record a decline
and that witnessed major collapses in market value
Collective retreats
While some technology sector companies, whose value exceeded
a trillion dollars during the current year, declined,
and this came at a time when US Treasury bonds were declining,
in addition to high inflation that reached its highest levels in decades,
all of these factors had a direct impact on the shares of technology giants,
and the place The Nasdaq 100 index fell by about 32%,
it included the problem of supply chains as well as closures due to the Corona epidemic in China
and the continuation of the Russian-Ukrainian war
The market value of the electric car giant, which used to exceed one trillion dollars,
has now fallen to 710 billion dollars, while the market value of the “Meta Platforms” company,
which includes “Facebook” also declined, with a decline of 75% from its historical peak,
which amounted to 10.08 trillion dollars in the year 2021,
and thus came out of the list of the 20 largest companies
Negative pressure
The strong impact of the ban due to the Coronavirus in China has caused
the business growth of “Amazon” company,
whose market value has reached a peak of 1.88 trillion dollars, since last year,
but with the slowdown experienced by the turbulent global economy,
their name fell by about 33% during 2022.
In addition to the decline in the ranking of the richest man in the world,
which was owned by the founder of the company, it is currently ranked third.
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Oil falls as the dollar declines and Asian stocks continue to rise
Oil prices fell moderately on Wednesday morning after rising on Tuesday to their highs since early July
while Asian stocks continued their global rally on Wednesday as strong US earnings
and an expected resumption of Russian gas supplies to Europe helped lift risk sentiment and ease recession concern
while the dollar declined to two-week lows.
By Wednesday morning, September Brent crude futures fell by $0.59, or 0.55 percent on the London Futures Exchange
to $106.76 per barrel.
Brent crude oil also rose on Tuesday by $1.08, or 1 percent, to $107.35 per barrel.
August WTI futures were at this moment cheaper in electronic trading on the New York Mercantile Exchange (NYMEX) by $0.34 or 0.33 percent, to $103.88 per barrel, during the previous session
where the futures contract rose by $1.62, advancing by 1.6 percent to $104.22 per barrel.
US President Joe Biden pledged on Tuesday to take “strong executive action” to combat climate change
and support renewable energy, without elaborating.
Data released overnight by the American Petroleum Institute indicated
that last week US oil inventories increased by about 1.5 million barrels.
Experts have forecast an increase of 400 thousand barrels,
and the US Department of Energy will publish its own inventory statistics later on Wednesday.
Asian stocks continue to rise globally as the dollar weakens
European futures also pointed to a stronger opening, with eurozone futures Stokes 50rising by 0.2 percent.
S&P 500 futures and the Nasdaq rose by 0.5 percent, following stronger-than-expected results from US companies overnight
including Netflix Inc, allowing relief for investors concerned about rising inflation
and the Federal Reserve raising interest rates that affected corporate profits.
On Thursday, the S&P 500 rose by 2.8 percent while the heavy Nasdaq composite rose by 3.1 percent.
In Asia, MSCI’s broader index of Asia-Pacific stocks outside Japan rose by 1.2 percent
driven by a 1.6 percent jump in resource-intensive Australia and 1.7 percent in Hong Kong stocks
and Japan’s benchmark Nikkei indexrose by 2.5 percent.
Chinese stocks rose by 0.4 percent, slowing in other markets
as the central bank kept record lending rates unchanged in a fragile economic recovery from COVID lockdowns.
In the analysts’ view, in addition to the technology-led rally in stocks
the flood of major news about Europe has mostly raised the euro again above 1.02 with European core yields also broadly rising.
The escalation of the gas crisis in Germany
The euro rose 0.2 percent to $1.0244 by Wednesday morning
after making the biggest one-day percentage gain in a month during the previous session
as traders raised their bets on interest rate hikes.
Russian gas flows through the Nord Stream 1 pipeline are expected to resume on time
on Thursday after scheduled maintenance is completed
easing investors’ concern about gas supplies to Europe.
It has been a positive night for risk, but concern about a recession has certainly not gone away
and a rebound in stocks over the past week could largely reverse the recovery
from saturation levels in the sale and extreme pessimism levels.
The Bank of Japan also issued a policy decision on Thursday
but no changes are expected to be made to its ultra-easy position.
On Wednesday
the US dollar slipped 0.1 percent against its main counterparts
bottoming out at two weeks’ lows as expectations that the Fed could turn to a 100 basis point
hike at its meeting next week eased.
Markets still expect the Fed to raise the rate significantly by 75 basis points to rein in inflation.
Other major currencies have likewise risen on the back of a weak greenback and as banks globally become increasingly tight in their efforts to reduce high inflation.
The US dollar index against a basket of major currencies fell by 0.14 percent to 106.52
off a two-decade high of 109.29 last week.
The greenback’s decline also coincided with lower expectations
for a 100 basis point rate hike in next week’s Fed policy review.
The Australian dollar rose by 0.4 percent to $0.6925, after rising by 1.3 percent overnight
also the highest in a month.
Ahead of next week’s Federal Reserve meeting, markets had expected a 23.2 percent chance of a 100 basis point rate hike
with expectations of a massive rate hike tempered after policymakers rushed to water it down.
Earlier on Wednesday, Reserve Bank of Australia Governor Philip Lowe also suggested interest rates could at least double from current lows
similarly, the sterling advanced by 0.28 percent to $1.2031.
In contrast, the Japanese yen remained in the opposite position on Wednesday morning and was last traded at 138.155 against the dollar as the Bank of Japan appears determined on its pessimistic stance.
A closely watched portion of the US yield curve remained inverted on Wednesday
with the last two-year yield at 3.2335 percent, and little changed from the previous close of 3.2310 percent.
US crudeinventories also lost about 77 million barrels since the beginning of 2021 and 20 million barrels since the beginning of 2020 Last week, API announced that there was an increase in crude oil inventories amounted to 3.754 million barrels after analysts expected a drop of 1.867 million barrels
Oil prices fell on Tuesday as the European Union is unlikely to reach an agreement to prohibit Russian oil and gas imports
In the middle of the day, the West Texas broker was traded down 0.73% at $111.3 a barrel on a day-an increase of $15 a barrel a week
Brent Crude was trading down 0.42% a day at $115.10 a barrel on the day – also higher by $15 a barrel
At the end of the day, West Texas mediator was traded at $111.30 (-0.73%),
with Brent Crude trading at $114.90 (-61%)
Oil production rates this week
Over 6 consecutive weeks, US Crude oil production, including last week, did not rise.
US oil production declined to 11.6 million barrels a day and is still 1.5 million barrels a day from pre-epidemic times
Latest Decisions of Movable Companies for Oil Market
Rockcliff Energy, an American gas exploration company, is said to be seeking $4 billion in a sale
where Haynesville’s production base has already exceeded a billion cubic feet of production recently
US Oil Company Exxon Mobil (New York Stock Exchange under Code: NYSE: XOM) has reinforced its portfolio
in the Mediterranean region by discovering another marine water for Cyprus,
as the company found another “high quality” gas tank in Block No 10,
it is the same as the cluster that has seen the capacity of 7 billion cubic feet in 2019
The Greater Italian Energy Company (NYSE: E) has registered an important discovery of oil and gas in the Algerian Birkin basin,
as it was reported that the Zamla Al Arabi concession contains 140 million barrels of crude oil and unspecified quantities of natural gas
Oil and gas producers in the Middle East returned to the vogue as a major disorder in Russian supplies puts the oil market in a state of tension
Germany is assigned to Qatar
for energy supplies, and Japan asked from the United Arab Emirates to increase its exports,
while the British Prime Minister travelled to Riyadh and Dubai
asking from Heavyweight countries in OPEC to increase their productions
Saudi Aramco has doubled its net income
for 2021 more vulnerable, with $110 billion,
dramatically, reducing its net profit and allowing it to issue free shares
Expecting an unexpected increase in profits in 2020, Saudi Aramco plans to increase its capital
expenditure in the area of excavation and production by about 40-50 billion dollars,
strengthening its position as a world-rested global product
Updates of Oil Sector
Members of the European Union are torn due to increased sanctions on Russia.
Internal pressure on members of the European Union is increasing, as many members called for a ban on oil imports on Russia.
Germany quickly reduced this initiative, where it claimed that any reduction of accreditation should be gradual
Saudi Arabia expects more Houthi attacks
Saudi Arabia has declared that it will not bear any responsibility for oil shortage in global markets
if other attacks from Al Houthi militias in Yemen cause damage, as the last attack on Sunday
caused a fire at an oil storage facility in Jeddah
Grand Petroleum Services companies are ashamed of full exit from Russia
The New York Oil Field Services (NYSE:HAL) and Schlumberger (listed on the New York Stock Exchange under the NYSE:SLB)
announced that they will call their future operations in Russia
while maintaining their current portfolio in line with international laws and sanctions
Germany wants a Qatari LNG deal
The German government indicated that it was about to cut a deal to a long-term supply of LNG with Qatar
This news comes on the background of Germany’s commitment to building 2 new LNG stations.
Qatar has not reached a limit that an agreement was concluded
Saudi Arabia and Kuwait agree on a joint gas project
Riyadh and Kuwait signed an agreement to develop the Durra gas field jointly,
which was discovered in 1960 but wasn’t used so far because it is located in a disputed border area.
It is expected to produce one billion cubic feet of gas daily and 84,000 barrels a day from capacitors at maximum production rates
Shell tries again with Al Gourap Field
After the initial development plan was rejected in the North Sea in the UK for environmental reasons last year.
British oil major Shell (LON:SHELL) has presented an offsetting scheme for the field
hoping that the current gas price environment will facilitate the decision
Oil Rock raises Argentine oil production
Increased production from the Vaka Rocky Factory in Argentina, which was already 222,000 barrels a day,
pushed total oil production in Latin America to the highest levels in 11 years last month, an increase of 14% on an annual basis at 570,000 barrels a day
Belgium was stalled at the deadline for nuclear turnover for 2025
Fearing of higher fossil fuel prices, the Belgian government declared that it will extend nuclear power plants currently operating in the country,
DOEL 4 and TIHANGE 3, for another 10 years so as not to be turned off in 2025
Saudi Arabia expects the growth of reserve production capacity by 2025
Saudi Aramco seeks to increase its backup production capacity to 13 million barrels a day by 2027,
with growth in the first place of marine fields in Morgan, Bryan and Ceros.
The expected growth of about 1 million barrels a day indicates that current hopes in increased supply may be removed
Britain wants to nationalise its subsidiary company in the United Kingdom
British government is said to be instructed to nationalize the UK retail supply arm, Gazprom for marketing and retail.
This company is an entity that provides nearly 20% of the volume of commercial gas in Britain
It is difficult to extinguish the rail strike in Canada
The Canadian government has called for a rapid end of the strike in the second largest CAD in the country
(CP) as large quantities of wheat and potential fertilisers risk stumbling in the country at high prices
A sudden decline in U.S Oil inventories: On Tuesday, Nov 9, 2021 the American Petroleum Institute (API) reported the first decline of crude oil stockpiles in six weeks.
Evest follows market developments in the following report.
The API estimated a decline of 2.485 million barrels in crude oil stockpiles, this week.
Despite the rise over the past six weeks, U.S. crude oil stockpiles are still less by 60 million barrels than they were at the year’s beginning,
and still lower enough to keep pressure on prices progressively. Yet analysts expected a rise of 1.90 million barrels for the week.
In the last week, the API recorded a rise of 3.594 million barrels in oil stockpiles, compared with the 1.567 million barrels expected by analysts.
The API proclaimed a drop in gasoline stockpiles by 552.000 barrels by the week ending Nov 5, compared with last week’s consumption of 552.000 barrels.
Distillate stockpiles rose by 573.000 barrels throughout the week, compared with last week’s rise of 573.000 barrels.
Oil prices for the week
On Tuesday, oil prices rose before data was published, West Texas Intermediate crude rose to $83.96,
Brent crude was for $84.57 a barrel in dealings.
West Texas Intermediate crude rose by midday to less than $50 in the week, while Brent crude stood steadily this week.
Oil production weekly rates
U.S. Oil production for the week ended on 29 Oct (the last week, the EIA has reported data about production) rose by 200.000 bpd to be 11.5 million bpd,
but still less by 1.6 million bpd than its highest levels ever of 13.1 million bpd; which has been reached directly before the pandemic has struck the USA.
Saudi Arabia is unsatisfied with reducing reserve oil production
The CEO of the world’s largest oil exporter said that the expected rise of plane fuel demand,
will slow down the demand recovery on other fuels and would consume all energy reserves.
Amin Nasser, ARAMCO’s CEO said yesterday that the world will witness a decline in oil reserves capacity production in the next year,
as demand on plane fuel is back to pre crisis levels.
He added that the reserve capacity of the industry is 3 or 4 million bpd and it is easing the market,
he also said that the reserve would decline especially in the next year when demand rise and that should arouse concerns, according to Reuters
Nasser said that the insignificant reserves capability amid shortage of investment in oil and gas should arouse market’s concerns.
“Expanding capacity in the oil industry takes from 5 to 7 years, and the world’s investments aren’t enough to raise capacity; that is also a big source of worry.” Nasser said.
Aramco’s In Saudi Arabia
Aramco CEO confirmed the company plan to raise its production capability to 13 million bpd by 2027 as its production is 12 million bpd for now,
confirming that demand on oil and gas will stay in order for decades.
“Renewable energy can’t meet the world’s energy needs.” Said Nasser in a forum reported by Bloomberg.
Aramco’s CEO asserted the company’s view that the global oil demand will exceed 100 million bpd in the early time of the next year.
At the end of the last month Nasser said that crude oil production capacity is diminishing globally and there is an urgent need of more investments in the new production.
Nasser also said to Bloomberg that this is a big source of worry; he added that if the aviation sector recovered in the next year,
the reserve energy would run out. As the offer now is limited and all reserves are declining fast.
The impact of oil prices rise on Saudi’s economy
Saudi Arabia recorded 6.8% economic growth for the third quarter on the basis of oil prices rise,
Reuters noted in a report that this is the highest quarterly growth for the kingdom since 2012.
Saudi’s general authority for statistics said that the positive growth is due to a 9.0% rise in oil activities 9.0%
as a result of the global demand rise on crude oil and the rise of Saudi’s production.
The general authority for statistics added that the seasonal average of the domestic production rose 5.8% per quarter,
due to the expansion of 12.9% in the Saudi oil activities.
Oil prices rose greatly since the year beginning due to the progressive demand and lack of offer, including globally reserved oil.
As a consequence oil producers got unexpected gains.
Aramco recorded net gains of $30.4 billion for the third quarter of this year, recording 158% rise from the third quarter of 2020.
The CEO, Amin Nasser, said that the strong quarterly result is due to the global economic recovery,
which made the demand on energy rise.
Nasser noted that Aramco’s low cost product helped in its performance in the third quarter as well.
“The global economy is facing some challenges, this is partly due to logistics chain problems;
but we are still optimistic that the energy demand will stay in order in the near future.” Amin Nasser said.
As it benefited from the oil basics case, Saudi Arabia raised its official selling price of “RB light” for Asian buyers more than $1 per barrel.
As a consequence Asian traders and refinery companies will pay $2.70 for Saudi’s light crude oil,
delivered by December over the average of Oman and Dubai.
The country is maintaining its production rates, although it is working to increase its production capacity to 13 million bpd.
Oil prices rise as US inventories decline: on Tuesday 21st September 2021, the American Petroleum Institute (API) declared a decline in crude oil stockpiles by 6.0108 million barrels by the week ending September 17th, exceeding analysts’ expectations by 2.400 million barrels throughout the week.
The API declared a decline in oil stockpiles by 5.437 million barrels for the last week,
while analysts’ expectations were 3.903 million barrels.
U.S. oil stockpiles lowered vastly in 2021, according to the API data it lowered by more than 76 million barrels, less than prior pandemic levels.
At the same time the latest data by Energy Information Administration (EIA) indicates that U.S oil reserves are less than 7%
than the average of the five years for the same time of the year to 417.4 million barrels.
The API declared a decline in gasoline stockpiles by 423.000 barrels for the week ending September 17th compared with last week’s decline by 2.761 million barrels.
Distillate stockpiles lowered by 2.720 million barrels this week compared with last week’s drop by 2.888 million barrels.
Cushing stockpiles dropped by 1.748 million barrels this week, while the last week drop was 1.345 million barrels.
Oil-prices-for-the-week
On Tuesday oil prices rose before data publishing, as U.S crude oil reserves weekly declined, and OPEC’s production was under market’s expectations,
also U.S. oil production lowered due to hurricane Ida. West Texas Intermediate crude rose 0.31% on Tuesday afternoon before data publishing.
At midday West Texas intermediate crude was for 70.51$, to rise 0.33$ in the week and 0.22$ throughout the day. Brent crude oil rose 0.70% at 74.44$ a barrel.
Oil production weekly rates
Lately, U.S oil production fell by more than a million barrels in the last two weeks,
to 10.1 million barrels by the week ending September 10th as hurricane Ida led to suspension of production in the Gulf of Mexico.
According to BSEE, 16.64% of GOM’s production is still offline up till now.
Dubai’s gas tech conference report
This week the world’s biggest gas traders and producers are meeting in Dubai to attend the Gas Tech conference;
this is the first face to face main action since Covid-19 struck.
According to world oil, the report mentioned that the conference is held from 21st to 23rd September at a time Europe faces a gas problem,
as gas prices are jumping to high levels.
Experts warned of electricity cuts in some countries by winter.
“We hope that winter in the northern half of the earth won’t be cold or we will face problems.” Didier Holt, French ENGIE’s deputy executive director said.
German UNIPER SE mentioned that risks in this industry credit are rising and many companies would find problems in cash.
Den Hollander, UNIPER’s commercial director, said that there wasn’t anything to say that Russia would suspend its gas supplies to Western Europe.
He also mentioned that, Russian PJSC Gazprom needed to renew its domestic market reserves
as this is one of the reasons why Russia wouldn’t be able to increase its exports.
Shell is off to the end of the year as an Ida’s consequence
Shell declared that an offshore platform run by the company would be off by the end of the year as a consequence of hurricane Ida,
as the platform got structural damages.
Shell also mentioned that another platform affected by Ida would be back to work by the end of the year.
Ida was one of the most destructive hurricanes lately, affecting gas and oil production in the Gulf of Mexico,
about 95% of oil production was off.
This week, after twenty days of Ida’s arrival to shore, more than 20% of production is still off.
According to the International Energy Agency (IEA) Ida caused cumulative losses in oil supplies reaching 30 million barrels,
to be the first decline in international oil supplies in five months and also international reserves declined sharply.
The US oil production fell from 11.5 million barrels per day to 10 million barrels per day after hurricane Ida struck the Gulf coast,
according to the EIA. After three weeks of Ida, about 40% of shell offshore production in the Gulf of Mexico is still off.
Saudi Arabia remains China’s biggest oil supplier
Official Chinese data reported by Reuters on Monday shows that Saudi’s crude oil exports to China rose to 53% yearly in August,
keeping its position as the main exporter to the world’s biggest oil importer for the ninth month in a row.
In the last month China’s crude oil imports from Saudi Arabia, the world’s biggest oil exporter,
rose by 53% compared with August’s 2020.To reach 1.96 million barrels,
according to Reuters’s data calculations by ton, of China’s customs general administration.
In the last few weeks the Chinese refineries began to raise their crude oil imports after a decline for months in buying oil from the spot market,
as Covid-19’s closure measures were one of the reasons why China’s oil buying from the spot market lowered.
There was another decline in importing shares due to governmental restrictions on private refineries.
Russia and Saudi Arabia are competing to export oil to China
Saudi Arabia beats Russia again to maintain the first position,
not only because the biggest oil producers in OPEC diminished their reductions,
but also China diminished its imports for private refineries in the third quarter.
Russian ESPO blend crude has a big fame in these refineries, known as “Teapots”.
Russia was the second biggest crude oil exporter to China.
Its exports rose by 12.6% throughout the year to 1.59 million barrels per day in August,
Russian exports didn’t change in the last month compared with the previous month’s 1.56 million barrels.
Last year, Saudi Arabia and its partner in OPEC Russia were competing for the first place as the biggest oil exporter to China,
the world’s biggest oil importer.
