Oil Falls as Demand Outlook Weakens, Iran Supply Disruption Concerns Ease
Steam rises from the chimneys of a thermal power plant and an oil refinery amid smog in Omsk, Russia October 14, 2024. REUTERS/Alexey Malgavko
Oil prices slid as much as $3 to a near two-week low during Asian trade on Tuesday on the back of a weaker demand outlook and after a media report said Israel is willing not to strike Iranian oil targets, which eased fears of a supply disruption.
Brent crude futures were down $2.81, or 3.6%, to $74.65 per barrel at 0640 GMT, having dropped earlier to $74.26, its lowest since Oct. 2, Reuters reported.
US West Texas Intermediate futures fell $2.72, or 3.7%, to $71.11 per barrel. The contract fell as low as $70.75, its weakest since Oct. 3.
Both benchmarks had settled about 2% lower on Monday. They are down almost $5 so far this week, nearly wiping out cumulative gains made in the seven sessions up to last Friday when investors were concerned about supply risks as Israel planned to retaliate against a missile attack from Iran.
Israeli Prime Minister Benjamin Netanyahu told the US that Israel is willing to strike Iranian military targets and not nuclear or oil ones, the Washington Post reported late on Monday.
"Weakening demand has led to traders withdrawing the 'war premium' from prices," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"However, geopolitics still continues to support oil at this level. Without geopolitics in the equation, oil would have tumbled even more, maybe even below $70 per barrel mark amid the current weakening demand narrative."
The Organization of the Petroleum Exporting Countries (OPEC) on Monday cut its forecast for global oil demand growth in 2024, with China accounting for the bulk of the downgrade. China's demand is now seen growing by 580,000 barrels per day (bpd) this year, down from 650,000 bpd.
OPEC also lowered its global oil demand growth projection for next year to 1.64 million bpd from 1.74 million bpd.
China's customs data showed that September oil imports fell from a year earlier, as plants curbed purchases because of weak domestic fuel demand and narrowing export margins.
Independent market analyst Tina Teng said that while the demand outlook remains weak due to record high US production and soft Chinese demand, "oil retreated from the Middle East-tension-led surge as the market reaction may have been overdone."
Global Logistics Forum in Riyadh Paves the Way for Strategic Partnershipshttps://english.aawsat.com/business/5071171-global-logistics-forum-riyadh-paves-way-strategic-partnerships
Global Logistics Forum in Riyadh Paves the Way for Strategic Partnerships
The Global Logistics Forum addressed key topics in the transport and logistics sector. (Asharq Al-Awsat)
The Global Logistics Forum, which concluded in Riyadh on Monday, saw the signing of over 60 strategic local and international partnerships and memorandums of understanding, with a total value exceeding SAR 16 billion ($4.3 billion).
In its 2024 edition, the forum aimed to boost international cooperation in the logistics sector, with the goal of reshaping the global logistics services map.
Saudi Deputy Minister of Transport and Logistics Services Dr. Rumaih Al-Rumaih stated that the forum “serves as a platform for collaboration” within the logistics system, with the goal of enhancing efficiency, resilience, sustainability, and profitability in today’s world.
According to Al-Rumaih, the agreements announced reflect the significance of the forum and its importance for the future of the sector, showcasing the transformative impact of cooperation and highlighting the Kingdom’s leadership role in the global logistics services sector.
“We aim to leverage our unique strategic position at the crossroads of three continents,” he added.
Medical supply agreements
The Ministry of Transport and Logistics Services, in collaboration with the Ministry of Investment, announced a series of significant agreements and memorandums of understanding.
Among the most prominent was a MoU with FedEx to explore investment opportunities in Saudi Arabia’s logistics and transport sector, agreements with Sadel Group to establish cold storage warehouses in Jeddah (western Saudi Arabia), and other agreements with Pacific International Lines and the Saudi Ports Authority (Mawani) to explore new opportunities in integrated logistics services and multimodal transport.
The Ministry of Transport and Logistics Services also announced the signing of memorandums of understanding with the National Unified Procurement Company for Medical Devices and Supplies (NUPCO) to establish new regional centers for supplying medical equipment and with the Saudi Industrial Development Fund to collaborate in developing transport and logistics services to support industrial transformation.
Key announcements and partnerships
The event witnessed major announcements from global sector leaders. Agility Logistics revealed the expansion of its warehouses in Saudi Arabia and signed an agreement with the Saudi Railways Company.
Additionally, Saudi Cargo signed a new partnership with the Second Airport Group to improve air cargo services.
New scholarship and training initiatives were launched during the event. The Ministry of Transport and Logistics Services announced agreements to send a group of national talents abroad for training and capacity-building to meet the needs of the sector in the Kingdom.
The agreements were made in collaboration with the Saudi Group, Airport Holding, The Helicopter Company, The Executive Company, and Saudi Railways Company.
The Saudi Logistics Academy also announced a series of training initiatives in cooperation with NEOM, Qassim University, and Al-Salihiya Logistics Agency.
Participants are seen at a panel discussion at the forum. (Asharq Al-Awsat)
Economic zones and hydrogen trains
The General Authority of Civil Aviation (GACA) unveiled a series of agreements with companies such as Alat, Bahri, and Danfoss.
It also granted licenses for integrated logistics service zones to several entities. The Economic Cities and Special Zones Authority awarded certificates to Tharawat Group and Masarat Logistics Services for establishing new centers in King Abdullah Economic City.
It also signed a memorandum of understanding with Saudi Post to develop a new addressing system that will facilitate business operations in Saudi Arabia’s special economic zones.
In addition, CEO of the Saudi Railways Company Dr. Bashar Al-Malik revealed the success of Saudi Arabia’s experiments with the first hydrogen-powered train aimed at evaluating the suitability of this technology for the Kingdom’s environment.
This comes after Prince Abdulaziz bin Salman, the Saudi Minister of Energy, announced last year during his speech at the opening of Climate Week that Saudi Arabia would have the first hydrogen-powered train in the Middle East.
The inaugural edition of the Global Logistics Forum addressed key topics in the transport and logistics sector, such as enabling global markets, investing in logistics infrastructure, enhancing the resilience of logistics services in the face of disruptions in the Red Sea region, in addition to discussing the “New Era of Energy Ports” and empowering talents to develop the industries of the future.
The event was held in the presence of a large number of ministers, senior officials, leaders of international organizations, industry associations, experts, academics, and analysts, and featured 130 speakers and 80 exhibitors from 30 countries.
