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Oil Holds on to Last Week’s Gains Buoyed by Mideast Tensions

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Holds on to Last Week’s Gains Buoyed by Mideast Tensions

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed in early Asian trading on Monday, holding on to most of last week's more than 3% gains, supported by geopolitical tensions and better economic data.

Brent crude futures fell 7 cents, or 0.09%, to $79.59 a barrel by 0021 GMT, while US West Texas Intermediate crude futures rose 2 cents, or 0.03%, to $76.86.

"Traders remain mindful of simmering tensions in the Middle East," ANZ analysts said in a note, Reuters reported. .

The risk of an escalation in the Israeli-Palestinian conflict continued to support prices after Iran and Hezbollah vowed to retaliate for the assassinations of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr.

The Israeli incursion into Gaza intensified on Saturday with an airstrike on a school compound that killed at least 90 people, according to the Gaza Civil Emergency Service, though Israel said the death toll was inflated. Hamas cast doubt on its participation in new ceasefire talks on Sunday.

Brent ended last week up more than 3.5% on the week, while WTI gained more than 4%, on supportive economic data and increased hopes of a US interest rate cut.

Three US central bankers said last week that inflation appeared to be cooling enough for the Federal Reserve to cut interest rates as soon as next month.

China's consumer prices rose faster than expected in July, and US weekly jobless claims fell more than expected last week.

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Revenue Growth, New Projects Boost Profitability of Saudi Public Utility Companies

People walk in the lobby of the Saudi Stock Exchange. (AP)
People walk in the lobby of the Saudi Stock Exchange. (AP)
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Revenue Growth, New Projects Boost Profitability of Saudi Public Utility Companies

People walk in the lobby of the Saudi Stock Exchange. (AP)
People walk in the lobby of the Saudi Stock Exchange. (AP)

Public utility companies listed on the Saudi Stock Exchange (Tadawul) achieved a 15.76 percent growth in their net profits by the end of the first half of 2024, reaching SAR 6.56 billion ($1.75 billion), compared to SAR 5.67 billion ($1.51 billion) during the same period in 2023.

The companies recorded a 14-percent growth in their revenues during the same half, equivalent to SAR 5.79 billion ($1.54 billion), after achieving sales worth more than SAR 46.76 billion ($12.47 billion) during the first half of 2024, compared to SAR 40.98 billion ($10.93 billion) in the same period last year.

This growth in revenues and net profitability is a result of an increase in sales and revenues, the launch of new projects and rise in the number of subscribers and demand for services.

The sector includes six companies: Saudi Electricity Company, ACWA Power, Alkhorayef Water and Energy Technology, Marafiq, National Gas and Industrialization Company (GASCO), and Miyahuna.

According to the financial results announced on Tadawul, all companies in the sector achieved growth in profits, except for Marafiq, which recorded a decline in profits by 59.37 percent to SAR 108.13 million.

In comments to Asharq Al-Awsat, financial advisor at the Arab Trader Mohammad Al-Maymouni said that Alkhorayef Company has driven this boost in profitability by registering the highest growth rates, as a result of recovery in the areas of development, design and production.

ACWA Power had also a strong impact on the growth of the sector’s profits, Al-Maymouni noted, thanks to the increased activity of water and energy supply projects and the cost of maintenance revenues, which contributed to the overall rise in the company’s revenues.

The cost of energy and fuel, as well as financing costs and interest rates, are the greatest burden on the profits of companies in the sector as they contributed significantly to the decline in the profitability of Marafiq by 59 percent during the second quarter of 2024, he noted.

Al-Maymouni highlighted factors that will support the profitability of the sector, such as continuity of projects acquired by sector companies, infrastructure and wastewater development operations, and lower financing costs and interest rates during the coming quarters.