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Oil Prices Climb amid US Stocks Decline, Mideast Conflict

FILE PHOTO: A motorist fills a car with fuel at a petrol station in Sydney August 18, 2004. REUTERS
FILE PHOTO: A motorist fills a car with fuel at a petrol station in Sydney August 18, 2004. REUTERS
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Oil Prices Climb amid US Stocks Decline, Mideast Conflict

FILE PHOTO: A motorist fills a car with fuel at a petrol station in Sydney August 18, 2004. REUTERS
FILE PHOTO: A motorist fills a car with fuel at a petrol station in Sydney August 18, 2004. REUTERS

Oil prices extended gains on Wednesday after industry data showed a surprise drop in US crude stocks last week, a positive sign for demand, though markets were also keeping a close eye on hostilities in the Middle East.
Brent crude futures rose 26 cents, or 0.29%, to $88.68 a barrel and US West Texas Intermediate crude futures climbed 26 cents, or 0.31%, to $83.62 a barrel at 0634 GMT, Reuters reported.
US crude inventories fell 3.237 million barrels in the week ended April 19, according to market sources citing American Petroleum Institute figures. In contrast, six analysts polled by Reuters had expected a rise of 800,000 barrels.
Traders will be watching for the official US data on oil and product stockpiles due at 10:30 a.m. EDT (1430 GMT) for confirmation of the big drawdown.
US business activity cooled in April to a four-month low, with S&P Global saying on Tuesday that its flash Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 this month from 52.1 in March.
"This could help convince policy makers that rate cuts are required to support the economy," ANZ analysts said in a note.
US interest rate cuts could bolster economic growth and, in turn, demand for oil from the world's top consumer of the fuel.
Analysts were still bullish that any latest developments in conflicts in the Middle East will still support markets, though the impact on oil supplies remains limited for now.
"Overall, crude oil prices are well supported around current levels by on-going Middle East risk premium. On the topside, risk of possible renewed OPEC production increase from Jun will help limit any significant upside," said head of markets strategy for United Overseas Bank (UOB) in Singapore Heng Koon How.
"We maintain our forecast for Brent to consolidate at USD 90/bbl by end of this year," Heng added.
Israeli strikes intensified across Gaza on Tuesday, in some of the heaviest shelling in weeks.
"Recent reports suggest that both Iran and Israel consider the current operations concluded against one another, with no follow-up action required for now," ING analysts said in a note.
"The US and Europe are preparing for new sanctions against Iran – although these may not have a material impact on oil supply in the immediate term," they added.

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Saudi Arabia and Italy Boast Trade Volume of Around $10.9 Billion

Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
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Saudi Arabia and Italy Boast Trade Volume of Around $10.9 Billion

Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)

Economic affairs were the key focus of Italian Prime Minister Giorgia Meloni’s visit to Saudi Arabia, which began on Saturday and continues until Monday. During her first official trip to the Kingdom, Meloni aims to strengthen bilateral relations and boost trade ties before heading to Bahrain.

As members of the G20, Saudi Arabia and Italy share mutual economic interests. The establishment of the Saudi-Italian Joint Committee has played a pivotal role in advancing economic, trade, and investment relations between the two countries. It has also created effective governance frameworks to foster collaboration and elevate their relationship to the level of a strategic partnership.

Strategic partnerships

Saudi Arabia is Italy’s second-largest trading partner in the region. In 2023, the trade volume between the two countries reached around $10.8 billion. Saudi imports from Italy were valued at $5.875 billion, while exports to Italy amounted to $4.921 billion, including $737 million in non-oil exports. Globally, Italy ranks as the 10th largest exporter to the Kingdom.

Both nations are working to strengthen economic and investment ties by regularly convening the Saudi-Italian Joint Business Council, increasing official and trade delegation visits, encouraging joint ventures, and organizing trade and investment events.

Currently, more than 150 Italian companies operate in Saudi Arabia, with Italy’s foreign direct investment (FDI) stock in the Kingdom exceeding $4.6 billion.

Renewable energy cooperation

Saudi Arabia and Italy are collaborating in the renewable energy sector as the Kingdom focuses on its transition to carbon neutrality. Italy, with its extensive experience in renewable energy technologies, is seeking to establish a long-term partnership with the Kingdom, a potential future leader in green hydrogen production.

In September 2023, the Saudi-Italian Investment Forum, hosted in Milan by Saudi Arabia’s Ministry of Investment in partnership with Italy’s Ministry of Enterprises and Made in Italy, resulted in the signing of 21 agreements and memorandums of understanding. They covered sectors such as traditional and clean energy, healthcare, real estate, waste management, and more.

According to the Italian government, Italy views Saudi Arabia as a key partner, especially regarding investment opportunities tied to the Kingdom’s Vision 2030. The transformative reform plan aims to diversify the Saudi economy, shifting its reliance from oil to a service-based model. It emphasizes tourism, startups, and small- and medium-sized enterprises (SMEs) in high-value-added sectors.

Saudi Arabia ranks sixth globally in terms of the number of visas issued by Italy, underscoring Italy’s position as a leading destination for Saudi tourists.

Italy is also among the top 20 countries investing in Saudi Arabia, with over 150 Italian companies holding foreign investment licenses in the Kingdom. The Saudi-Italian Investment Forum in 2023 further solidified economic ties, with the signing of 21 agreements spanning a wide range of sectors.