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Saudi Catering Inks $2.4 Bn Concession Deals with Red Sea Global

The Red Sea Global project in Saudi Arabia. (Asharq Al-Awsat)
The Red Sea Global project in Saudi Arabia. (Asharq Al-Awsat)
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Saudi Catering Inks $2.4 Bn Concession Deals with Red Sea Global

The Red Sea Global project in Saudi Arabia. (Asharq Al-Awsat)
The Red Sea Global project in Saudi Arabia. (Asharq Al-Awsat)

Saudi Airlines Catering Company (SACC) signed two contracts with Red Sea Global (RSG) at a total value of $2.4 billion.

The Saudi Tadawul announced a one-day trading halt on Saudi Catering's stock, which came under the company's request before disclosing a material event. Trading on the shares will resume on Tuesday.

The first contract included designing, building, operating, and transferring a central laundry to serve hotels, resorts, and other facilities and sectors at the Red Sea project, valued at $720 million.

The second includes designing, building, operating, and transferring a central production unit for catering and facilities management services.

It will serve RSG's employees at hotel establishments and resorts and other facilities and sectors across the Red Sea destination at an estimated value of $ 1.6 billion.

Each contract is valid for 20 years, said Saudi Catering, adding that it expects a positive contribution to be shown in its accounts by Q3 2025.

The contracts are set to boost the company's business sustainability by increasing its cash flow and strengthening its business.

Furthermore, they come as part of Saudi Catering's strategic plan to attract investment opportunities in new industrial and tourist cities.

The statement said that the two contracts, subject to the RSG board's final sign-off, are part of the strategic plan implemented by Saudi Airlines Catering to attract investment opportunities in new industrial and tourist cities.

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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.