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Oil Prices Slip as Concerns over Hurricane Damage Ease

FILE PHOTO: Isla Oil Refinery PDVSA terminal in Willemstad on the island of Curacao, February 22, 2019. REUTERS/Henry Romero/File Photo
FILE PHOTO: Isla Oil Refinery PDVSA terminal in Willemstad on the island of Curacao, February 22, 2019. REUTERS/Henry Romero/File Photo
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Oil Prices Slip as Concerns over Hurricane Damage Ease

FILE PHOTO: Isla Oil Refinery PDVSA terminal in Willemstad on the island of Curacao, February 22, 2019. REUTERS/Henry Romero/File Photo
FILE PHOTO: Isla Oil Refinery PDVSA terminal in Willemstad on the island of Curacao, February 22, 2019. REUTERS/Henry Romero/File Photo

Oil prices slipped on Tuesday after a hurricane that hit a key US oil-producing hub in Texas caused less damage than markets had expected, easing concerns over supply disruption.
Brent futures fell 49 cents or 0.6% to $85.26 a barrel by 0852 GMT, while US West Texas Intermediate (WTI) crude slipped 54 cents or 0.7% to $81.79, Reuters said.
Although oil refining activity slowed and some production sites were evacuated, major refineries along the US Gulf Coast appeared to see minimal impact from Hurricane Beryl, which weakened into a tropical storm after hitting the Texas coast.
"Early indications suggest that most energy infrastructure has come through unscathed," ING analysts Warren Patterson and Ewa Manthey wrote in a client note, adding that price action in crude oil and refined fuel markets reflect little concern on supply disruption from the hurricane.
That eased market worries about the risk of supply disruption in Texas, where 40% of US crude oil is produced.
Major oil-shipping ports around Corpus Christi, Galveston and Houston had been shut ahead of the storm. The Corpus Christi Ship Channel reopened on Monday and the Port of Houston was projected to resume operations on Tuesday afternoon.
Several key refiners such as Marathon Petroleum were also preparing to restart their refining units.
Market participants are also keeping an eye on the situation in the Middle East for more trading cues. Oil prices settled down 1% on Monday amid hopes a possible ceasefire deal in Gaza could reduce worries about global crude supply disruption.
Senior US officials were in Egypt for talks on Monday, but gaps remained between the two sides, the White House said, and Hamas said a new Israeli push into Gaza threatened the potential agreement.
"Crude futures were inching lower early Tuesday after a second consecutive session of losses suggested an overdue pullback from (a) nine-week high," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Markets were also waiting for the release of key US inflation data, with Federal Reserve Chair Powell set to appear before Congress on Tuesday and Wednesday, as investors wagered a slew of soft labor market data has greatly increased the chance of an interest rate cut in September to about 80%.

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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)
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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.