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Saudi Energy Minister: OPEC+ Seeks to Hedge against Possible Scenarios in the Future

A photo of Prince Abdulaziz bin Salman during his participation in the Future Investment Initiative conference in Riyadh. (Reuters)
A photo of Prince Abdulaziz bin Salman during his participation in the Future Investment Initiative conference in Riyadh. (Reuters)
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Saudi Energy Minister: OPEC+ Seeks to Hedge against Possible Scenarios in the Future

A photo of Prince Abdulaziz bin Salman during his participation in the Future Investment Initiative conference in Riyadh. (Reuters)
A photo of Prince Abdulaziz bin Salman during his participation in the Future Investment Initiative conference in Riyadh. (Reuters)

Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that the goal of the OPEC+ alliance - which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and major oil producers - was to hedge against possible scenarios in the future.

Addressing the Qatar Economic Forum, which is organized by Bloomberg, the energy minister stressed that the alliance would continue to be proactive, preemptive and hedge against what may come in the future.

“We should be brave enough to attend to the future without continuing the so-called 'kicking the can' policies, those policies that may allow us to fend the situation for this month, next month or the month after but with that we are losing sight of our intentions and our more important objectives,” he said.

About speculations in the oil market, Prince Abdulaziz said: “Speculators, like in any market, are there to stay. I keep advising them that they will be ouching, they did ouch in April, I don’t have to show my cards... but I would just tell them watch out.”

In his speech, the minister touched on the hydrogen sector, and said that there were no clear policies for investors regarding this sector.

“There is no clear policy in this regard... How can we talk about future energy when the vision is not clear?” he asked.

Saudi Arabia, along with other OPEC+ producers, have announced sudden voluntary cuts in production in April, which led to a rise in prices after a recession led by fears of the impact of a banking crisis on demand.

Members of the OPEC+ coalition will meet on June 4 in Vienna to decide on the next course of action.

The Saudi minister said that the coalition will continue to work proactively, preventively, and hedge against what might come in the future, regardless of any criticism.

He again blamed the Paris-based International Energy Agency (IEA) and its initial predictions for a 3 million barrel per day (bpd) fall in Russian production over the Ukraine war for misleading the market.

“Look who did the most in trying to bring forecasts and data and projections that really created most of the volatility that we have had in 2022 and continue to do so?” Prince Abdulaziz said. “There is an organization called the IEA, I think they have proven that it really takes special talent to be consistently wrong.”

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Business

COP28 Nears Crucial Hours as Divergence Takes Center Stage

Sultan Al Jaber, President of COP28, alongside the Singaporean Minister of Environment and the Norwegian Minister of Environment in a press conference on Friday (AP)
Sultan Al Jaber, President of COP28, alongside the Singaporean Minister of Environment and the Norwegian Minister of Environment in a press conference on Friday (AP)
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COP28 Nears Crucial Hours as Divergence Takes Center Stage

Sultan Al Jaber, President of COP28, alongside the Singaporean Minister of Environment and the Norwegian Minister of Environment in a press conference on Friday (AP)
Sultan Al Jaber, President of COP28, alongside the Singaporean Minister of Environment and the Norwegian Minister of Environment in a press conference on Friday (AP)

COP28 president Sultan Al Jaber has urged countries to get out of their comfort zones and work together to reach an agreement before the two-week United Nations climate summit ends.

The scene at COP28 remains dominated by divergence, with the UN Climate Agency releasing a new draft of the conference agreement on Friday.

This draft included a range of options for the future use of traditional fuels, a highly contentious issue at the conference.

In the coming days, countries are expected to focus on this issue in the hope of reaching consensus before the summit concludes on December 12.

Options mentioned in the draft ranged from “gradual phasing out of fossil fuels in line with the best available science” to no inclusion of any language regarding the future use of fossil fuels.

The document also specified the option of “rapid and unconditional phasing out of coal energy this decade, with an immediate halt to the construction of new coal-fired power plants.”

“Let’s please get this job done,” said Al Jaber, opening a plenary session as the summit entered its toughest phase of negotiations.

“I need you to step up and I need you to come out of your comfort zones,” he added.

The President of COP28 appointed eight ministers, half from developed countries and the other half from the Global South, to work on four topics to break the deadlock in negotiations.

Energy Minister Suhail Al Mazrouei of the UAE, on Thursday, on the sidelines of the COP28 summit, emphasized the need for a gradual phase-out of coal.

“I don't believe we should talk about the gradual phase-out of fossil fuels because technologies are also improving. What if we have technology in the future that removes all carbon dioxide emissions from fossil fuels and makes it as clean as any other fuel type? Why fight it before we have an alternative?” said Al Mazrouei.

Since the adoption of the Loss and Damage Fund agreement on November 30, Al Jaber announced that countries had raised over $726 million to inject into the fund, with more expected by the end of COP28.

Pledges at COP28 are still far from the hundreds of millions needed annually to help developing countries adapt to the warming world, including rising sea levels and increased heat waves.

Business

Morocco Joins International Campaign to Phase out Coal

Morocco's flag with a woman's shadow seen on it. AFP file photo
Morocco's flag with a woman's shadow seen on it. AFP file photo
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Morocco Joins International Campaign to Phase out Coal

Morocco's flag with a woman's shadow seen on it. AFP file photo
Morocco's flag with a woman's shadow seen on it. AFP file photo

Morocco on Friday joined an international campaign to phase out coal, as it plans to secure more than half of its energy needs from renewables in the next seven years.

The Powering Past Coal Alliance (PPCA) now counts 60 national governments united by the desire to make a clean break with coal-fired power generation, Reuters reported.

Earlier at the COP 28 climate summit, the United States, the UAE, the Czech Republic, Cyprus, Dominican Republic, Iceland, Kosovo, Malta and Norway joined the global initiative, PPCA said in a statement.

Morocco "will work together with the PPCA to develop a plan for phasing (coal) out," PPCA said without offering deadlines.

About 70% of Morocco's electricity is generated from coal, with renewable energy representing 20% so far this year, according to official figures.

Morocco plans to raise the share of renewable energy in its energy mix to more than 52% by 2030.

 

 

 

 

 

 

Business

EU Considers Restarting WTO Case Against US Over Steel Tariffs

FILE PHOTO: Chess pieces are seen in front of displayed US and EU flags in this illustration. REUTERS
FILE PHOTO: Chess pieces are seen in front of displayed US and EU flags in this illustration. REUTERS
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EU Considers Restarting WTO Case Against US Over Steel Tariffs

FILE PHOTO: Chess pieces are seen in front of displayed US and EU flags in this illustration. REUTERS
FILE PHOTO: Chess pieces are seen in front of displayed US and EU flags in this illustration. REUTERS

The European Union is considering reopening a case at the World Trade Organization against the United States over a steel and aluminum dispute that saw the allies hit each other with tariffs on more than $10 billion of goods, Bloomberg News reported on Friday, citing people familiar with the matter.
The EU will, however, refrain from immediately reimposing retaliatory tariffs on American goods over the disagreement, the report said.

Business

FAO: World Food Prices Hold Steady in November

Women buy food from a roadside stall in Colombo, Sri Lanka, Friday, Dec. 8, 2023. (AP Photo/Eranga Jayawardena)
Women buy food from a roadside stall in Colombo, Sri Lanka, Friday, Dec. 8, 2023. (AP Photo/Eranga Jayawardena)
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FAO: World Food Prices Hold Steady in November

Women buy food from a roadside stall in Colombo, Sri Lanka, Friday, Dec. 8, 2023. (AP Photo/Eranga Jayawardena)
Women buy food from a roadside stall in Colombo, Sri Lanka, Friday, Dec. 8, 2023. (AP Photo/Eranga Jayawardena)

The United Nations food agency's world price index held steady in November, with lower international cereal prices offset by higher prices of vegetable oils.
The Food and Agriculture Organization's (FAO) price index, which tracks the most globally traded food commodities, averaged 120.4 points in November, around October's levels which were the lowest since March 2021.
The November reading marked a 10.7% decline versus last November.
The FAO cereal price index decreased by 3.0% month-on-month in November, lead by a sharp fall in maize prices, while those of wheat declined by 2.4%, Reuters reported.
Vegetable oil prices, however, rose 3.4% from October.
"Palm oil prices rebounded more than 6% in November, chiefly underpinned by more active purchases by leading importing countries and seasonally lower outputs in major producing countries," the FAO said in a statement.
The agency's dairy price index rose 2.2% from October, led by high demand for butter and skimmed milk powder in Northeast Asia, and increased pre-holiday demand in Western Europe.
Sugar prices rose 1.4% month-on-month in November but averaged 41.1% higher than last November thanks to worsening production prospects in Thailand and India.
In a separate report on cereal supply and demand, the FAO raised its forecast for world cereal production this year to a record 2.823 billion metric tons versus 2.819 billion previously - representing a 0.9% increase from 2022.
"Looking ahead to next season, planting of the 2024 winter wheat crop is ongoing in the northern hemisphere and, reflecting lower crop prices, area growth could be limited," said the FAO.
Nevertheless, the agency sees world cereal stocks up 2.7% by the end of the 2024 season, while the cereal stock-to-use ratio is forecast at 30.8% in 2023/24, "indicating an overall comfortable supply level".

Business

Saudi Arabia, Hong Kong Sign MoU on Enhancing Direct Investments

Saudi Arabia and the Hong Kong have signed a memorandum of understanding (MoU) that aims at encouraging direct investments. SPA
Saudi Arabia and the Hong Kong have signed a memorandum of understanding (MoU) that aims at encouraging direct investments. SPA
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Saudi Arabia, Hong Kong Sign MoU on Enhancing Direct Investments

Saudi Arabia and the Hong Kong have signed a memorandum of understanding (MoU) that aims at encouraging direct investments. SPA
Saudi Arabia and the Hong Kong have signed a memorandum of understanding (MoU) that aims at encouraging direct investments. SPA

Saudi Arabia and the Hong Kong Special Administrative Region of the People's Republic of China have signed a memorandum of understanding (MoU) that aims at encouraging direct investments.

The memorandum was signed in the presence of Saudi Minister of Investment Eng. Khalid Al-Falih.

The MoU aims to enhance joint direct investments by exchanging rules and regulations related to the investment environment and cooperation in organizing exhibitions and business sessions and exchanging visits and expertise.

The memo was signed during a Saudi delegation’s visit to Hong Kong and elsewhere in China, headed by the minister of investment.

Business

Al-Swaha Meets with CEO of Google, Alphabet to Support Growth of Digital Economy

Al-Swaha met with the CEO of Google and Alphabet in Silicon Valley. SPA
Al-Swaha met with the CEO of Google and Alphabet in Silicon Valley. SPA
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Al-Swaha Meets with CEO of Google, Alphabet to Support Growth of Digital Economy

Al-Swaha met with the CEO of Google and Alphabet in Silicon Valley. SPA
Al-Swaha met with the CEO of Google and Alphabet in Silicon Valley. SPA

Saudi Minister of Communications and Information Technology (CIT) Eng. Abdullah bin Amer Al-Swaha met in Silicon Valley in California on Friday with the CEO of Google and Alphabet, Sundar Pichai, and a number of senior executives to expand the strategic partnership in the field of cloud computing, innovation and capacity development.

According to an official report, released by the ministry of CIT in Riyadh, the two sides discussed areas of common interest and deepening the strategic partnership in the field of cloud computing to enhance the growth of the digital economy and entrepreneurship and provide a pioneering generation in the field of technology and innovation to contribute to accelerating the digital transformation journey in the Kingdom.

Al-Swaha also met with the CEO of Intel to discuss the partnership and develop research in network technologies and artificial intelligence solutions to contribute to enriching innovative solutions and building a digital economy based on innovation and technology.

Business

China's Leaders Pledge to Spur Domestic Demand, Economic Recovery

FILE PHOTO: A traveller is seen with his belongings at a railway station, following the coronavirus disease (COVID-19) outbreak, in Beijing, China January 13, 2021. REUTERS/Thomas Peter/File Photo
FILE PHOTO: A traveller is seen with his belongings at a railway station, following the coronavirus disease (COVID-19) outbreak, in Beijing, China January 13, 2021. REUTERS/Thomas Peter/File Photo
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China's Leaders Pledge to Spur Domestic Demand, Economic Recovery

FILE PHOTO: A traveller is seen with his belongings at a railway station, following the coronavirus disease (COVID-19) outbreak, in Beijing, China January 13, 2021. REUTERS/Thomas Peter/File Photo
FILE PHOTO: A traveller is seen with his belongings at a railway station, following the coronavirus disease (COVID-19) outbreak, in Beijing, China January 13, 2021. REUTERS/Thomas Peter/File Photo

China will spur domestic demand and consolidate and enhance the economic recovery in 2024, the Politburo, a top decision-making body of the ruling Communist Party, was quoted by state media as saying on Friday.
The government has in recent months unveiled a flurry of measures to shore up a feeble post-pandemic economic recovery that has been held back by a property crisis, local government debt risks, slow global growth and geopolitical tensions.
Ratings agency Moody's slapped a downgrade warning on China's credit rating on Tuesday, saying costs to bail out debt-laden local governments and state firms and control its property crisis would weigh on the growth outlook of the world's second-largest economy.
According to Reuters, analysts believe the government will have to unveil more stimulus to support the economy, which still faces headwinds.
China will continue to implement a proactive fiscal policy, which will be moderately strengthened, and implement a prudent monetary policy, which will be "flexible, moderate, precise, and effective", state media quoted the Politburo as saying.
The meeting, which was chaired by President Xi Jinping, also said the country will enhance the consistency of macroeconomic policies, the official Xinhua news agency reported.
China will "effectively enhance economic vitality, prevent and resolve risks, improve social expectations, consolidate and enhance the positive trend of economic recovery, continue to promote the effective improvement of quality and reasonable growth of the economy," Xinhua said.
"Efforts should be made to expand domestic demand and form a virtuous cycle of mutually promoting consumption and investment. We need to deepen reforms in key areas and continuously inject strong impetus into high-quality development."
President Xi said in a meeting with non-Communist Party representatives held on Wednesday that the country's economic recovery is still at a critical stage, Xinhua said in a separate report on Friday.
Most analysts believe China's growth is on track to hit the government's target of around 5% this year, but that compares with a COVID-weakened 2022 and activity remains uneven. The Politburo's meeting on economic work is usually a prelude to the annual agenda-setting Central Economic Work Conference, which is expected to be held around mid-December.
China's government advisers will recommend a steady growth target for 2024 and more stimulus to the policymakers' meeting.
"There is no doubt fiscal policy will take a leading role in 2024," said Bruce Pang, chief economist at Jones Lang Lasalle.
Analysts at UBS expect China to set a fiscal deficit target of 3.5%-3.8% of gross domestic product, and a special local government bond quota of around 4 trillion yuan ($560 billion) for 2024, versus this year's 3.8 trillion yuan.
The government has launched a slew of policy measures in recent months to shore up a feeble post-pandemic economic recovery impacted by a property crisis, local government debt risks, slow global growth and geopolitical tensions.
The central bank has delivered modest interest rate cuts and pumped out more cash in recent months to support growth.
In October, China unveiled a plan to issue 1 trillion yuan in sovereign bonds by the end of the year, raising the 2023 budget deficit target to 3.8% of gross domestic product (GDP) from the original 3%.
The Politburo also studied plans for anti-corruption work and reviewed regulations on party disciplinary action, Xinhua said.

Business

Gold Heads for First Weekly Drop in Four Weeks ahead of US Jobs Data

FILE PHOTO: Gold bars are pictured at the plant of gold and silver refiner and bar manufacturer Argor-Heraeus in Mendrisio, Switzerland, July 13, 2022. REUTERS/Denis Balibouse//File Photo
FILE PHOTO: Gold bars are pictured at the plant of gold and silver refiner and bar manufacturer Argor-Heraeus in Mendrisio, Switzerland, July 13, 2022. REUTERS/Denis Balibouse//File Photo
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Gold Heads for First Weekly Drop in Four Weeks ahead of US Jobs Data

FILE PHOTO: Gold bars are pictured at the plant of gold and silver refiner and bar manufacturer Argor-Heraeus in Mendrisio, Switzerland, July 13, 2022. REUTERS/Denis Balibouse//File Photo
FILE PHOTO: Gold bars are pictured at the plant of gold and silver refiner and bar manufacturer Argor-Heraeus in Mendrisio, Switzerland, July 13, 2022. REUTERS/Denis Balibouse//File Photo

Gold was on track for its first weekly fall in four weeks after the dollar firmed, although prices held steady on Friday as markets looked ahead to key US jobs data to gauge the chance of a rate cut by the Federal Reserve as early as March.
Spot gold edged 0.1% higher to $2,030.32 per ounce by 0750 GMT. Bullion, however, has fallen nearly 2% for the week so far. US gold futures were steady at $2,047.10.
Bullion scaled an all-time peak of $2,135.40 on Monday on elevated bets for a rate cut by the Fed, before dropping more than $100 on uncertainty over the cut's timing, Reuters reported.
The dollar index was on track to snap a three-week losing streak, making greenback-priced gold more expensive for other currency holders.
Gold remains well-supported above $2,006 per ounce level, but stronger-than-expected payrolls data could put this support level in jeopardy, said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.
Data this week suggested that the US labor market was gradually losing momentum as higher borrowing costs curb demand in the broader economy.
The US non-farm payrolls report for November is due at 1330 GMT, which should show that employers added 180,000 jobs last month.
Markets are pricing in a 60% chance of a US rate cut as soon as March, CME's FedWatch Tool showed, but a Reuters poll saw rates unchanged until at least July.
Lower interest rates tend to support non-interest-bearing bullion.
"Outlook remains very bright for gold. Expect prices to remain in the range of $2,005 and on the upside it can test $2,080 in the near-term," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
Spot silver rose 0.1% to $23.81 per ounce, while platinum gained 0.9% to $915.19 and palladium inched 0.6% higher to $975.20 per ounce.

Business

Al-Rumayyan: PIF Analyzes Global Trends Before Investments

A group photo at the opening ceremony of the FII PRIORITY Summit Hong Kong (PIF)
A group photo at the opening ceremony of the FII PRIORITY Summit Hong Kong (PIF)
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Al-Rumayyan: PIF Analyzes Global Trends Before Investments

A group photo at the opening ceremony of the FII PRIORITY Summit Hong Kong (PIF)
A group photo at the opening ceremony of the FII PRIORITY Summit Hong Kong (PIF)

Yasir Al-Rumayyan, Governor of Saudi Arabia's Public Investment Fund (PIF) and Chairman of the Future Investment Initiative (FII) Institute, emphasized that the Fund's strategy hinges on a thorough understanding of needs, global trends, and emerging directions.

Al-Rumayyan highlighted the importance of aligning these factors in the most effective manner.

This involves a thorough examination of business and financial feasibility before making any investments.

Al-Rumayyan made these remarks during a panel discussion on humanitarian priorities at the FII PRIORITY Summit Hong Kong which brought together global investors, innovators and policymakers to tackle technology, climate, and economic threats.

The two-day summit was organized by the Hong Kong government, its stock exchange and the FII Institute— a nonprofit founded by PIF.

Al-Rumayyan discussed the impact of global trends on PIF’s investments.

He highlighted the expected economic growth in Asia this year, approximately 4.6%, contributing 52% to global economic growth.

Al-Rumayyan added, “43% of funding for startups, 51% of technological expenses, and 88% of patent applications all come from Asia.”

Saudi Arabia’s national transformation plan, known as Vision 2030, aims to diversify the country’s economy beyond reliance on energy, reaffirmed Al-Rumayyan.

On his part, Hong Kong Chief Executive John Lee called the summit “yet another significant step forward, in the deepening (of) ties between Hong Kong and the Middle East, particularly the Kingdom of Saudi Arabia.”

He described Hong Kong as one of the most competitive and free economies globally, acting as a major international financial center.

Lee noted that around a thousand fintech companies are currently operating in Hong Kong, a 25% increase from the previous year.

Moreover, Richard Attias, CEO of the FII Institute, stated that both Hong Kong and Saudi Arabia serve as “vital connectors” for people from diverse cultures and markets.

Attias praised Hong Kong as the gateway to Asia, citing its simple and low-tax system and robust legal framework.

Laura Cha, chair of the Hong Kong stock exchange, emphasized the increasing need for global communication.

“The world needs connection now more than ever,” she said.

Cha anticipated stronger relationships between the Middle East, mainland China, and Hong Kong throughout the event.

“Only by working together can we progress and overcome the most pressing challenges facing our generation,” she said.

The summit was attended by around a thousand investors, innovators, entrepreneurs, and policymakers from around the world, with over 100 speakers, including industry leaders, government officials, and academics.

Discussions focused on rapidly changing priorities in the social, economic, and geopolitical landscape.

Business

Saudi Ministers Affirm Commitment to Economic Diversification

Saudi ministers of finance and economy attend the first dialogue session of the Budget 2024 Forum, titled “Sustainable Finance” in Riyadh (Asharq Al-Awsat)
Saudi ministers of finance and economy attend the first dialogue session of the Budget 2024 Forum, titled “Sustainable Finance” in Riyadh (Asharq Al-Awsat)
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Saudi Ministers Affirm Commitment to Economic Diversification

Saudi ministers of finance and economy attend the first dialogue session of the Budget 2024 Forum, titled “Sustainable Finance” in Riyadh (Asharq Al-Awsat)
Saudi ministers of finance and economy attend the first dialogue session of the Budget 2024 Forum, titled “Sustainable Finance” in Riyadh (Asharq Al-Awsat)

The Saudi Minister of Finance asserted on Thursday that since its initiation in 2016, the national transformation plan of the Kingdom, known as Vision 2030, has incorporated a diverse range of sectoral and regional strategies.

“These strategies include a large number of projects and the Kingdom has been conducting a comprehensive review of all these strategies over the last two years,” said Mohammed Al-Jadaan.

“We are currently halfway through the Vision,” he added, underlining the need for the optimum utilization of the limited revenues and resources so as to achieve the greatest economic return.

Al-Jadaan highlighted the focus of Vision 2030 on economic diversification, particularly on non-oil domestic products, with a targeted range of approximately 18%-21%.

The minister stressed that the range should not be exceeded, otherwise it will be a burden on the economy.

Addressing the first dialogue session of the Budget 2024 Forum, titled “Sustainable Finance” in Riyadh, Al-Jadaan discussed the concept of financial capacity in local debt markets and its considerations with the private sector.

“In its borrowing endeavors, the Kingdom takes into account the needs of the private sector, considering their access to financing in banks for small and medium-sized enterprises, consumer loans, and providing financial support,” noted the minister.

He highlighted the global market, international loans, and the allocation of approximate amounts for each country based on risk diversification, economic strength, credit rating, pointing to indicators such as debt service to the gross domestic product (GDP) and non-oil GDP, emphasizing financial sustainability.

On his part, Minister of Economy Faisal Al-Ibrahim affirmed that Saudi Arabia seeks to achieve optimal economic diversification.

Al-Ibrahim also confirmed that many targets of Vision 2030 have been realized.

The institutional capacities of government entities, coupled with their collaboration with other sectors, have become well-established and of high quality, added Al-Ibrahim.

He pointed out that exports of services rose to SAR135 billion currently, compared to SAR65 billion in 2016, which contributed to improving the Kingdom’s trade balance.

The contribution of non-oil revenues to covering costs jumped from 19 percent to 35 percent, which is due to the basic growth of the non-oil economy, said Al-Ibrahim while noting that unemployment rates continue to decline systematically.

Al-Ibrahim said that the Kingdom’s Vision 2030 created a fertile environment for economic diversification, building national capabilities and raising the efficiency of government institutions, in addition to improving the trade balance.

He underlined the need to support the private sector to reach the government target.

The minister also stressed that all sectoral strategies and mega projects aimed to enable the private sector to exploit available opportunities and grow to respond to demand within the Kingdom and also compete with other producers outside Saudi Arabia.