Latest news with #OpecPlus
The National
4 days ago
- Business
- The National
Oil climbs while US stock futures dip as Israel-Iran conflict continues
Oil prices rose on Tuesday while US stocks slumped further as the Israel-Iran conflict stoked fears that an escalation could spill into the Gulf region, choking global energy supplies. Iran and Israel's air war, which began on Friday when Israel attacked Iran's nuclear facilities, has dented the mood of investors as they also await an interest decision by the US Federal Reserve. Brent, the benchmark for two-thirds of the world's oil, was trading 2.25 per cent higher at $74.88 a barrel at 4.17pm on Tuesday, extending oil's advance since hostilities started to more than 7 per cent. West Texas Intermediate, the gauge that tracks US crude, jumped 2.09 per cent to $73.27 per barrel. Oil prices could surge to as much as $120 a barrel if the attacks by Iran halt traffic in the Strait of Hormuz, a gateway for about a fifth of the world's daily output, according to analysts. 'While Iran appears to be signalling restraint, US President Donald Trump urged the evacuation of Tehran, and Israel has vowed to continue its strikes,' said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. 'This makes it a one-sided de-escalation at best, and keeps risks across energy markets and haven assets tilted to the upside. If Iran fails to find room to manoeuvre diplomatically, it could easily make a U-turn.' The upside for oil appears limited as the market remains well-supplied, with the US pumping crude oil at record levels and Opec+ adding hundreds of thousands of barrels back into the market, Ms Ozkardeskaya added. 'Yet global energy supply remains fragile and it wouldn't take much to shake the physical flow of oil and reverse market sentiment in a heartbeat,' she said in a note to investors. As Israel and Iran continued to trade attacks, President Trump left the G7 leaders' meeting in Canada early to deal with the crisis. Though he has not outlined what comes next, Mr Trump told reporters aboard Air Force One he was looking for 'a real end, not a ceasefire' to the conflict. 'Everyone should immediately evacuate Tehran,' Mr Trump said in a post on his Truth Social platform on Monday. ' Iran should have signed the 'deal' I told them to sign. What a shame, and waste of human life,' he wrote. The nuclear talks, which Mr Trump has accused Iran of 'slow-walking', have stalled amid the conflict. South Pars gas field Separately, Qatar said on Tuesday that its gas production at Iran's South Pars field is steady and supply is proceeding normally, after the world's largest gas field was struck by Israel on Saturday. Iran partially suspended production at South Pars, which it shares with Qatar. Qatar is the world's third-biggest liquefied natural gas exporter after the US and Australia. 'So far, gas supplies are proceeding normally. However, the ill-advised targeting raises concerns for everyone regarding gas supplies,' Qatar's foreign ministry spokesperson Majed Al Ansari said, according to Reuters. 'This is a reckless move … The companies operating in the fields are international, and there is a global presence, especially in the North Field,' he said during a weekly press briefing in Doha. Stock futures and Fed decision While energy markets remain volatile, global equities have recovered from the knee-jerk reaction after Israel began its military campaign last week. S&P 500 futures, which track the S&P 500 stock market index, slid 0.34 per cent, while Dow Jones futures dropped 0.39 per cent and Nasdaq futures declined 0.36 per cent. Global equity investors are monitoring the Fed's monetary policy decision on Wednesday, when interest rates are widely expected to remain unchanged. Traders are pricing in two cuts by the end of the year. 'While no change in Fed rates is expected, geopolitical uncertainty and trade tensions make the outlook more complex. Recent inflation data has been reassuring – suggesting price pressures are not accelerating – but tariffs and the risk of an oil price spike due to Middle East tensions will likely keep the Fed in a cautious stance,' according to Ms Ozkardeskaya. That said, markets could still react strongly to even a hint of dovishness from the Fed this week, she said. 'Investor positioning and sentiment suggest a clear appetite to push the S&P 500 to fresh all-time highs. But with little fundamental support behind the current risk rally, much of it appears to be driven by FOMO – the fear of missing out,' she added. Haven assets Spot gold was up 0.1 per cent to $3,386.29 an ounce on Tuesday. Zero-yield bullion is considered a hedge against geopolitical and economic uncertainty and tends to thrive in a low-interest environment. The gold market's reaction to the escalating conflict between Israel and Iran remains very moderate, with prices up less than 1 per cent since before Israel's initial attack, according to Carsten Menke, head of next-generation research at Swiss bank Julius Baer. 'Barring a severe economic impact or a spreading in the region, we do not expect the conflict to lastingly lift prices, in line with the historical pattern,' he said. 'We assume that this reaction has been driven by some speculators and automated trading systems in the futures market rather than by physical safe-haven demand.'
Zawya
4 days ago
- Business
- Zawya
Bahrain's non-energy sector growth prospects stay positive
Bahrain's economy faces a nuanced outlook for 2025, navigating a weaker global growth forecast and new US tariffs, even as regional oil output increases offer some tailwind, according to the Institute of Chartered Accountants in England and Wales (ICAEW) Economic Insight report for Q2, prepared by Oxford Economics. Released yesterday, the report notes that the International Monetary Fund (IMF) has cut its 2025 world GDP growth forecast to 2.4 per cent from 2.8pc last year, marking the lowest expansion since 2020. This comes as most of the world, including the Middle East, continues to face tariffs of around 10pc. Despite these headwinds, the Middle East is expected to see stronger growth this year than in 2024, largely driven by Opec+ countries accelerating the rollback of oil production cuts. Regional GDP is now projected to grow by 3.5pc in 2025, up from 1.5pc in 2024. For the GCC, which includes the kingdom, GDP growth is forecast at 4.4pc this year. This upward revision is primarily due to Opec+ members, including Saudi Arabia and the UAE, raising oil supply faster than anticipated. Saudi Arabia's average oil production is now projected at 9.7 million barrels per day (bpd) for the year, boosting its oil sector growth forecast to 5.2pc. The UAE's oil sector is expected to grow by 6.1pc. However, GCC countries, including Bahrain and Oman, now face a universal 10pc US tariff on their goods, superseding existing free trade agreements. While the direct impact is expected to be muted given that GCC exports to the US are only 3pc of total exports and energy is exempt, trade uncertainty could dampen near-term external demand and investment. The increased Opec+ supply and global growth concerns pushed Brent crude oil prices to their lowest since 2021 in early April. Although prices have stabilised near $65 per barrel, continued tepid demand and building supply are expected to limit gains, with an average price of $67.3 per barrel forecast for 2025. The kingdom's non-energy sector growth prospects remain positive, though the projected pace of expansion has been slightly lowered to 4.1pc this year for the GCC region. High-frequency data indicate resilient growth momentum, particularly in Saudi Arabia and the UAE, driven by robust hiring and significant project spending. Tourism is also a key growth engine for the region. Dubai saw a 3pc year-on-year increase in international visitors in Q1, with hotel occupancy at 82pc. The UAE anticipates a 10.3pc rise in tourist arrivals this year, benefiting its real estate, hospitality, and infrastructure sectors. The lower oil price environment has elevated fiscal risks for the region. For countries like Bahrain, Oman, Qatar, and Kuwait, where commodity exports account for over 70pc of government revenue, downward pressure on oil prices will strain budgets, potentially leading to wider deficits or increased borrowing. While Qatar and the UAE are still projected to run surpluses, Saudi Arabia is now forecast to have a budget deficit of 3.4pc of GDP in 2025, up from 2.8pc last year. Despite low inflation across the region, with Bahrain and Qatar experiencing negative annual inflation, domestic interest rates are expected to remain high due to their currencies' peg to the US dollar. The US Federal Reserve is anticipated to begin aggressive rate cuts in December, which should support domestic consumption and investment next year. The kingdom, along with other GCC nations, continues to be viewed as an attractive investment destination, with growing foreign participation in both bond and equity markets. The region saw a record 53 IPO deals last year, raising over $13 billion, as authorities aim to deepen capital markets and further diversify their economies. Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Bloomberg
4 days ago
- Business
- Bloomberg
Oil Hedges Seeing a Huge Spike on Israel-Iran: Expert
CC-Transcript 00:0072, Brent. What should it be trading at? Knowing the headlines that we know? Actually, you think, given the fact that we haven't lost any supplies. The market is probably, you know, fairly priced, probably a couple of dollars higher would also be fairly justified. Where I do worry about this market is that it's probably become a bit too complacent, that there won't be any supply risks now or supply outages. We're not saying that's definitely going to happen, but we did see some outages, right? We saw Israel take out attack from in South Pars 14 in Iran. That's definitely led to some losses in condensate and LPG. Gas production has also been affected. So it's not nothing. And I do wonder if the market's just completely dismissing the possibility that, you know, there will be any supply outages whatsoever. But you've seen a lot of the volatility today. Yeah, exactly. Falling down from where it was on Friday. So putting the Strait of Hormuz aside, if we do get some strikes and there are outages in the oil and gas market, can the Saudis make up for that? Can the US make up for that? Who makes up for that? Great question. I mean, look, Opec+ is increasing production already at an accelerated pace. You know, they do have spare capacity. Again, that does mean if there's a genuine outage over millions of barrels a day, there is fear in the market. But I would also caution that I think within or back in Middle Eastern oil back, there will be you know, I don't think anybody's going to jump in order to fill that gap because nobody wants the situation to escalate. Everything that's going to be done by other countries in the region is going to be trying to de-escalate. That's right. And nobody wants to be seen to be taking advantage of a situation. But of course, if there is a genuine outage, you know, Opec+, it is adding barrels and I think they will continue to do so to mitigate any of those risks. I'm curious as to what the situation was like for the oil market prior to this. And I know at least certainly here on the U.S. side, looking at the CFTC data, you definitely had a market that basically saw oil prices continuing to drift lower or at least to stay low where they had been. What were the potential upside catalysts? You know, now, of course, you know the military conflict right now between Iran and Israel. I'm glad you asked that question, you know, because last month, literally just about a month ago, we put out a piece that was called The Pain Trade. And this was exactly something we were highlighting, that the market had continued to go short and probably to early in our balances, are calling for a build in Q4 and 2026. But right here, right now, inventories are very tight. China's buying for its SVR and OPEC+, even though production is increasing. Exports happened because Middle Eastern summer burden is high and demand is high. As a result of that. We're not seeing a market that is losing the front. And our point was that you might actually get these shorts having to cover before the market actually weakens in terms of balances. And that's exactly what was playing out. And of course, the geopolitics has made it worse. With regards, though, to some of the disruptions that we had had because of obviously the sanctions that were already in place in Iran. Obviously the issues going on with Ukraine and Russia, which it also had created some potentially, I guess, upward price pressures here. How much is that adding to the concern? I don't think any of the Russia concerns are in the price. Because generally speaking, President Trump has been very reluctant to put any sanctions on Russia, even though, you know, the wider kind of team or the Europeans are kind of asking him to do so. So that's really not in the price. I think what we've seen in the last couple of sessions has been the Middle Eastern conflict. I think your question is almost suggest I would agree with. I think if there were to be sanctions on Russia, you know, the price could go significantly higher because even if there are workarounds, there will always be arounds. You could easily get 2 to 3 million barrels per day off initial disruptions at least. Right. Which is just more complicated when you don't have, say, Venezuela making up oil, for example, as well. If I'm a producer right now and I'm an oil producer and my hedging these levels and does that make me sort of more immune then to if we do go into the forties or the fifties, like President Trump has made clear he wants? Yeah, I absolutely think that one of the reasons why we've seen the short covering the catalyst has been producer hedging. We did that was another thing, but one that, you know, we are going to start seeing producers hedge because again, if the outlook isn't rosy, they will use any rally. And the last couple of days, according Quantum are pointing out this is one of the biggest increases you've seen in hedging, you know, kind of on a kind of day to day basis. And that again means that, you know, hedging the 2026 part of the curve, the curve flattening and anybody who has been short the December 25, December 26 contract, which, you know, we call it accurate day, they're all getting stopped up. It does mean the producers have some protection for next year, especially, like you said, if prices do go into the fifties next year with the bills. But at the same time, you know, the flipside, of course, is that we don't get the bills because, you know, just generally due to sanctions or whatever reasons that fundamentals end up being stronger than expected, then of course they will be underwater. But as of right now, all our balances do point to oversupply for next year. So the producer hedging would be prudent.
The National
11-06-2025
- Business
- The National
World Bank upgrades UAE growth forecast to 4.6% this year on non-oil boost
The World Bank has upgraded its growth forecast for the UAE to 4.6 per cent this year, up from its 4 per cent projection in January, on expanding non-oil activity and phase-out of the Opec+ oil production cuts. The Washington-based multilateral lender projects the UAE economy to grow at 4.9 per cent in 2026 and 2027, respectively, it said in its latest Global Economic Prospects report. The Emirates' economy is estimated to have expanded by 3.9 per cent last year, the lender said on Tuesday. In its January 2025 update, the World Bank estimated UAE growth for 2024 at 3.3 per cent. The UAE has been focusing heavily on diversifying its economy from oil by developing sectors such as technology, manufacturing, tourism, trade and innovation. The UAE's economy grew by 3.9 per cent in 2024, the Central Bank reported in April, with the non-oil growth up 4.6 per cent. The banking regulator expects the country's gross domestic product to expand at 4.7 per cent this year, with non-oil growth at 5.1 per cent. Meanwhile, late last month oil producers group Opec+ agreed to increase its monthly output by 411,000 barrels per day for July, the same as in May and June, as part of its plans to gradually ease cuts. In March, Opec+ said it would proceed with a 'gradual and flexible' unwinding of voluntary production cuts of 2.2 million bpd, starting in April and moving until September 2026. The planned return of production cuts – originally made by eight Opec+ members, including Saudi Arabia, Russia, the UAE and Iraq, in November 2023 – had been pushed back several times amid concerns about growing supply and dampening demand in the market. Globally, the World Bank projects the economy to expand 2.3 per cent this year, about half a percentage point lower than estimates at the start of the year, it said in the report. The global economy is set to suffer the consequences of heightened trade tension and policy uncertainty, with the World Bank estimating the pace of growth to fall to the slowest level since 2008 outside of global recessions. The turmoil caused by the US's bid to levy historic tariffs on global trade has resulted in 'growth forecasts being cut in nearly 70 per cent of all economies – across all regions and income groups', the lender said. Growth is anticipated to continue to be boosted by expanding non-oil activity, particularly in the manufacturing, construction, and services sectors, in several economies, including Bahrain, Kuwait, Oman, and the UAE World Bank A global recession is not expected. However, if forecasts for the next two years materialise, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s. Meanwhile, growth in Gulf countries is forecast to increase to 3.2 per cent in 2025, 4.5 per cent in 2026, and 4.8 per cent in 2027, the World Bank said. 'The phase out of Opec+ oil production cuts starting in April 2025 is expected to lead to rising oil production, despite projected lower oil prices amid weakening global demand,' according to the lender. 'Growth is also anticipated to continue to be boosted by expanding non-oil activity, particularly in the manufacturing, construction, and services sectors, in several economies, including Bahrain, Kuwait, Oman, and the UAE.' The World Bank expects growth in Saudi Arabia to increase to 2.8 per cent this year on 'a gradual expansion of oil production', the report said. However, the forecast for 2025 has been downgraded by 0.6 percentage point, mainly because of expected lower oil prices and fiscal revenue leading to lower export proceeds, as well as heightened uncertainty curbing investment, the lender forecasted. Among oil exporting countries, further declines in crude prices from slower global growth and weaker demand from major export destinations, including China, could increase fiscal pressures and diminish growth prospects, the lender said. "While the phase-out of oil production cuts by Opec+ members will benefit growth in oil exporters, lower oil prices could lessen the positive effects, including on revenue collection," it said.
Khaleej Times
10-06-2025
- Business
- Khaleej Times
World Bank raises UAE growth forecast for 2025 and 2026
The World Bank has raised its economic growth forecasts for the UAE for 2025 and 2026, citing robust expansion in both hydrocarbon and non-oil sectors. This growth is expected to offset the negative impact of weakening global demand and lower oil prices. According to the World Bank's latest Global Economic Prospects report, released on Tuesday, the UAE's GDP growth forecast for 2025 has been revised upwards by 0.6 percentage points to 4.6 per cent, while the 2026 forecast was increased by 0.8 percentage points to 4.9 per cent. The Bank also projects a 4.9 per cent economic expansion in 2027. Growth across the GCC region is also expected to accelerate, reaching 3.2 per cent in 2025, 4.5 per cent in 2026, and 4.8 per cent in 2027. 'The phase-out of Opec+ oil production cuts starting in April 2025 is expected to lead to higher oil output, despite anticipated lower oil prices driven by weak global demand. Growth will also continue to be supported by expanding non-oil sectors — particularly manufacturing, construction, and services — in economies including Bahrain, Kuwait, Oman, and the UAE,' the World Bank stated. In April, Opec+ surprised markets by announcing a larger-than-expected increase in oil output for May, despite weak prices and subdued demand. The group's decision to extend the 411,000 barrels-per-day production increase into June raised concerns about a potential global supply surplus. In a separate projection released earlier this year, the International Monetary Fund (IMF) estimated the UAE's GDP would grow by four per cent in 2025 and five per cent in 2026. Meanwhile, UAE Minister of Economy Abdullah bin Touq Al Marri stated that he expects the economy to grow by 5-6 per cent in 2025, fuelled by strong performance in key sectors such as technology, renewable energy, trade, financial services, and infrastructure. Slowing but no recession Globally, the World Bank warned that escalating trade tensions and policy uncertainty are expected to slow growth in 2025 to its weakest pace since 2008 – excluding official recessions. Growth forecasts have been revised downward for nearly 70 per cent of countries worldwide, across all regions and income levels. The Bank now expects global GDP to grow by just 2.3 per cent in 2025 – almost half a percentage point lower than earlier projections. 'A global recession is not expected,' the report said. 'However, if these forecasts hold, average global growth during the first seven years of the 2020s will be the slowest of any decade since the 1960s.' Indermit Gill, chief economist at the World Bank, noted a concerning long-term trend for developing countries. 'Outside of Asia, the developing world is becoming a development-free zone. Growth in developing economies has declined steadily – from six per cent annually in the 2000s, to five per cent in the 2010s, and now to under four per cent in the 2020s.' This downward trend parallels a decline in global trade growth, which has slowed from an average of five per cent in the 2000s to below three per cent in the current decade. Investment growth has also weakened, while global debt levels have surged to record highs. In 2025, growth is expected to decelerate in nearly 60 per cent of developing economies, with average growth projected at 3.8 per cent. This figure is forecast to rise slightly to 3.9 pe cent in 2026 and 2027 – still more than a full percentage point below the average growth seen during the 2010s. For low-income countries, the World Bank projects a 5.3 per cent growth rate in 2025, marking a 0.4 percentage point downgrade from previous forecasts. At the same time, higher tariffs and tight labor markets are pushing global inflation upwards, with prices expected to rise by an average of 2.9 per cent – remaining above pre-pandemic levels. Nonetheless, the World Bank notes that global growth could rebound more quickly if leading economies successfully reduce trade tensions and navigate policy challenges.
