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Oil Falls after US Fed Governor Says No Rush to Cut Interest Rates

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Oil Falls after US Fed Governor Says No Rush to Cut Interest Rates

Oil prices fell on Friday after a US Fed official said interest rate cuts should be delayed at least two more months, but indications of healthy demand and concerns over supplies could boost prices in the coming days.
Brent crude futures were down 38 cents, or 0.5%, at $83.29 a barrel at 0524 GMT, while US West Texas Intermediate crude futures were 40 cents, or 0.5%, lower at $78.21, Reuters said.
US Federal Reserve policymakers should delay interest rate cuts by at least another couple of months to see if a recent uptick in inflation signals stalling progress toward price stability or is just a bump in the road, Fed Governor Christopher Waller said on Thursday.
Higher interest rates for longer slow economic growth, which could curb oil demand in the world's largest oil consumer. But some analysts say demand has remained largely healthy, including in the US.
Analysts at ANZ research said US crude oil inventories rose at a less-than-expected rate last week, while run rates at refineries ended a streak of declines and may increase in coming weeks.
JPMorgan's high frequency demand indicators are showing oil demand rising 1.7 mbd month-over-month through February 21, its analysts said in a note on Friday.
"This compares to 1.6 mbd increase observed during the prior week, likely benefitting from increased travel demand in China and Europe," the analysts said.
Oil benchmarks pared some of their Thursday gains after Waller's comments.
The US central bank has held its policy rate steady in the 5.25%-5.5% range since last July, and minutes of its policy meeting last month show most central bankers were worried about moving too quickly to ease policy.
Waller also pushed back on the idea that the Fed risks sending the economy into recession if it waits too long to cut rates, saying the Fed can afford to "wait a little longer".
Oil futures had settled higher on Thursday as hostilities continued in the Red Sea, with Iran-aligned Houthis stepping up attacks near Yemen to show support for Palestinians in the Gaza war.
Israel Prime Minister Benjamin Netanyahu's war cabinet has approved sending negotiators to truce talks taking place in Paris on Friday as pressure mounts in the Middle East, according to a source briefed on the matter and Israeli media.

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Business

Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.