Oil Prices Set for Best Week in Over 2 Months on Solid Demand Outlook

FILE PHOTO: Petrochemical storage tanks are seen at the Suncor Energy chemical plant near Edmonton, Alberta, Canada, October 7, 2021.  REUTERS/Todd Korol/File Photo
FILE PHOTO: Petrochemical storage tanks are seen at the Suncor Energy chemical plant near Edmonton, Alberta, Canada, October 7, 2021. REUTERS/Todd Korol/File Photo
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Oil Prices Set for Best Week in Over 2 Months on Solid Demand Outlook

FILE PHOTO: Petrochemical storage tanks are seen at the Suncor Energy chemical plant near Edmonton, Alberta, Canada, October 7, 2021.  REUTERS/Todd Korol/File Photo
FILE PHOTO: Petrochemical storage tanks are seen at the Suncor Energy chemical plant near Edmonton, Alberta, Canada, October 7, 2021. REUTERS/Todd Korol/File Photo

Oil prices eased on Friday as markets evaluated the impact of US interest rates staying higher for longer than anticipated, but crude benchmarks headed for their best week in more than two months after solid projections for crude and fuel demand.
Brent crude futures were down 34 cents, or 0.4%, at $82.41 a barrel by 0344 GMT. West Texas Intermediate (WTI) US crude futures lost 41 cents, or 0.5%, to trade at $78.21 a barrel.
However, Brent and the US benchmark gained over 3% for the week - the best week since April 5.
The Organization of Petroleum Exporting Countries (OPEC) stuck to a forecast for relatively strong growth in global oil demand for 2024 and Goldman Sachs projected solid US fuel demand this summer.
This helped reverse losses in the previous week which were driven by an agreement by OPEC and its allies, together called OPEC+, to start unwinding output cuts after September.
"Overall, this week can be characterized as a recovery effort for oil," said Tim Waterer, chief market analyst at KCM Trade based in Australia.
"I wouldn't be surprised to see oil prices head higher from here whilst the demand outlook continues to look rosier. Much may depend on how the northern hemisphere summer demand picture plays out."
Providing further support to the market, Russia pledged to meet its output obligations under the OPEC+ pact, after saying it exceeded its quota in May.
However, the price rally this week cooled after the US Federal Reserve held interest rates steady and pushed out the start of rate cuts to as late as December.
Meanwhile, the International Energy Agency said in a report on Wednesday it sees oil demand peaking by 2029, leveling off at around 106 million barrels per day (bpd) towards the end of the decade.
On the downside, concerns over economic outlook grew after the Fed's view on rate cut, but that said, to the extent that this buoys the US dollar, it could offer a measure of support to Brent, BMI analysts wrote in a note.
Market focus is also on the ongoing Gaza ceasefire talks, which, if resolved, would alleviate concerns about potential disruptions in oil supply from the region.
The US is very concerned that hostilities on the Israel-Lebanon border could escalate to a full-out war, a senior US official said, saying that specific security arrangements are needed for the area and a ceasefire in Gaza is not enough.



Positive Outlook for Saudi Stock Market Next Week

A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)
A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)
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Positive Outlook for Saudi Stock Market Next Week

A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)
A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)

Saudi Arabia’s Tadawul All Share Index (TASI) ended the second week of March with a slight decline for the third consecutive week, closing down 0.73% at 11,725.88 points, compared to the previous week's close of 11,811.11 points.

In an analysis of the market performance during the week ending March 13, Dr. Suleiman Al-Humaid Al-Khalidi, a financial market analyst, told Asharq Al-Awsat that the market experienced a sharp decline not seen in years, coinciding with a drop in global markets, particularly in the US, where $2 trillion in value was wiped out in a single day.

This accounted for roughly 60% of the total market value of the Saudi stock market.

Al-Khalidi noted that the key player in the Saudi market is the banking sector, especially Al-Rajhi Bank's shares, which showed resilience and did not follow the downward trend. This was attributed to the strong profits reported by the banking sector in 2024.

The primary factors contributing to the market’s decline include global economic pressures, particularly US tariffs on most global economies, ongoing global uncertainty, and the Federal Reserve's tight monetary policies, he explained.

These factors have significantly impacted liquidity flows into financial markets. Additionally, fluctuations in global oil prices, despite recent stability, have also played a role.

This downturn has been accompanied by caution among sovereign wealth funds, investment institutions, and some portfolios in injecting new liquidity or altering their positions until there is more clarity in the financial markets, he went on to say.

Moreover, Al-Khalidi said that the Saudi stock market has not accurately reflected the true strength and size of the Saudi economy, which has grown to SAR 4 trillion, up from SAR 600 billion in 2016, before the launch of Vision 2030.

Additionally, the country’s GDP has reached approximately $1.1 trillion.

Looking ahead to the market's performance in the coming week, he noted that there are strong support levels at 11,550 points, followed by 11,450 points.

These levels could help shift the market toward an upward trajectory and better reflect the robust growth of the Saudi economy.

Al-Khalidi emphasized that the banking and energy sectors could play a leading role in driving the market higher, pushing the index beyond this week’s closing levels.

He also pointed out that some stocks are hitting new lows, presenting significant investment opportunities for those seeking safe havens with steady returns in the Saudi market.