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Morgan Stanley Lifts Q3 Brent Crude Oil Forecast on Geopolitical Risk

Morgan Stanley raised its Brent crude oil price forecast for the third quarter of this year by $4 per barrel to $94. Reuters
Morgan Stanley raised its Brent crude oil price forecast for the third quarter of this year by $4 per barrel to $94. Reuters
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Morgan Stanley Lifts Q3 Brent Crude Oil Forecast on Geopolitical Risk

Morgan Stanley raised its Brent crude oil price forecast for the third quarter of this year by $4 per barrel to $94. Reuters
Morgan Stanley raised its Brent crude oil price forecast for the third quarter of this year by $4 per barrel to $94. Reuters

Morgan Stanley has raised its Brent crude oil price forecast for the third quarter of this year by $4 per barrel to $94, citing geopolitical risks.
"That the degree of geopolitical risk in key oil producing regions has increased recently seems clear and uncontroversial," the bank said in a note dated Monday.
OPEC+, a group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, last week kept its oil supply policy unchanged and pressed some countries to increase compliance with output cuts.
According to Reuters, Morgan Stanley said that with OPEC supply restraints, some downside to Russia production, and a seasonal upswing in demand ahead, it expects tightness in the second and third quarters.
Ukrainian strikes on Russian refineries may have disrupted more than 15% of Russian capacity, a NATO official said earlier this month.

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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)

As Saudi companies start reporting their Q2 financial results, experts are optimistic about the transport and logistics sector. They expect a 10% annual growth, with total net profits reaching around SAR 900 million ($240 million), driven by tourism and an economic corridor project.

In Q1, the seven listed transport and logistics companies in Saudi Arabia showed positive results, with combined profits increasing by 5.8% to SAR 818.7 million ($218 million) compared to the previous year.

Four companies reported profit growth, while three saw declines, including two with losses, according to Arbah Capital.

Al Rajhi Capital projects significant gains for Q2 compared to last year: Lumi Rental’s profits are expected to rise by 31% to SAR 65 million, SAL’s by 76% to SAR 192 million, and Theeb’s by 23% to SAR 37 million.

On the other hand, Aljazira Capital predicts a 13% decrease in Lumi Rental’s net profit to SAR 43 million, despite a 44% rise in revenue. This is due to higher operational costs post-IPO.

SAL’s annual profit is expected to grow by 76% to SAR 191.6 million, driven by a 29% increase in revenue and higher profit margins.

Aljazira Capital also expects a 2.8% drop in the sector’s net profit from Q1 due to lower profits for SAL and Seera, caused by reduced revenue and profit margins.

Mohammad Al Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that the sector’s continued profit growth is supported by seasonal factors like summer travel and higher demand for transport services.

He predicts Q2 profits will reach around SAR 900 million ($240 million), up 10% from Q1.

Al Farraj highlighted that the India-Middle East-Europe Economic Corridor (IMEC), linking India with the GCC and Europe, is expected to boost sector growth by improving trade and transport connections.

However, he warned that companies may still face challenges, including rising costs and workforce shortages.