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Oil Slips on Higher US Crude Stocks, Market Watches Middle East

The US last week announced a 10-nation coalition to counter the attacks in the Red Sea. - File Photo
The US last week announced a 10-nation coalition to counter the attacks in the Red Sea. - File Photo
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Oil Slips on Higher US Crude Stocks, Market Watches Middle East

The US last week announced a 10-nation coalition to counter the attacks in the Red Sea. - File Photo
The US last week announced a 10-nation coalition to counter the attacks in the Red Sea. - File Photo

Oil prices fell on Wednesday after industry data showed US crude inventories swelled more than expected, though futures were still up about 2% this week as traders factored in continuing conflict in the Middle East.

Brent crude futures dropped $1.14, or 1.5%, to $74.90 a barrel by 1255 GMT. US West Texas Intermediate crude futures shed $1.10, or 1.53%, to $70.64.

Oil had settled higher in the previous two sessions, paring last week's losses of more than 7%. Those declines stemmed from worries about Chinese demand and some easing concerns around Middle East oil supply being disrupted, but investor sentiment appeared to reverse at the start of this week, Reuters reported.

"Two days of rallies eat at much of last week's 7% loss due to market perceptions of how the pieces of the war puzzle are falling into a timely picture in which Israel finally strikes directly at Iran," said PVM analyst John Evans.

Wednesday's price drop came after data showed US crude stocks rose by 1.64 million barrels last week, according to market sources citing American Petroleum Institute figures on Tuesday. Analysts polled by Reuters had expected an increase of 300,000 barrels.

Official US government oil inventory data is due on Wednesday at 10:30 a.m. EDT (1430 GMT).

But the inventories impact on prices was countered somewhat by persistent concerns over potential oil supply risk from conflict in the Middle East.

"The market continues to wait for Israel's response to Iran's missile attack," ING analysts said on Wednesday, adding that Tuesday's price strength was possibly because of the lack of any outcome from US Secretary of State Antony Blinken's latest visit to Israel.

Blinken pushed on Wednesday for a halt to fighting between Israel and militant groups Hamas and Hezbollah, but heavy Israeli airstrikes on a Lebanese port city demonstrated that there was no respite.

"Market participants priced for the Middle East conflict to drag for longer, with a ceasefire deal potentially seeing some gridlock," said IG market strategist Yeap Jun Rong.

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Saudi-UAE Trade Exchange Reaches $244 Billion in 10 Years

The Saudi Minister of Economy and Planning addresses attendees at the Saudi-Emirati Economic Forum. (Asharq Al-Awsat)
The Saudi Minister of Economy and Planning addresses attendees at the Saudi-Emirati Economic Forum. (Asharq Al-Awsat)
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Saudi-UAE Trade Exchange Reaches $244 Billion in 10 Years

The Saudi Minister of Economy and Planning addresses attendees at the Saudi-Emirati Economic Forum. (Asharq Al-Awsat)
The Saudi Minister of Economy and Planning addresses attendees at the Saudi-Emirati Economic Forum. (Asharq Al-Awsat)

The Saudi-Emirati Economic Forum, which kicked off at the Federation of Saudi Chambers headquarters in Riyadh on Sunday, highlighted significant growth in trade between Saudi Arabia and the United Arab Emirates, reaching SAR 915 billion ($244 billion) over the past decade (2014 to 2023). In the past three years alone, trade reached its highest levels, totaling SAR 327.5 billion ($87.3 billion).

Saudi Minister of Economy and Planning Faisal Al-Ibrahim noted that trade between Saudi Arabia and the UAE increased by 25% over the past five years, reaching SAR 113 billion ($30 billion) by the end of 2023, compared to SAR 90 billion ($24 billion) in 2019.

He added that both countries have seen significant transformations in investment due to policies and measures designed to develop and improve the investment environment.

Al-Ibrahim also highlighted that, as of the end of last year, the UAE recorded positive growth in foreign direct investment (FDI) in Saudi Arabia, totaling around SAR 111 billion ($29.6 billion), marking a 15% increase from 2022.

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef emphasized that Saudi Arabia and the UAE have promising potential to enhance integration in industry and mining.

He expressed eagerness to collaborate on joint initiatives to support entrepreneurs by improving access to financing and training.

Al-Khorayef noted that Saudi exports to the UAE grew at an annual rate exceeding 9%, reaching about SAR 31 billion SAR this year.

UAE Minister of Economy Abdullah Al Marri revealed that UAE investments in Saudi Arabia have reached AED 15.7 billion, stressing that the forum provides a platform to continue strengthening the economic partnership between the two countries and advancing it to new levels.

He underlined the forum’s role in helping business communities explore promising growth opportunities in both countries. Al Marri underscored the private sector’s critical role as a key partner in helping both governments achieve their future vision, stressing that current global economic challenges underline the need to strengthen partnership channels.

He further highlighted that the UAE is Saudi Arabia’s largest Gulf and Arab trading partner and second-largest global partner, while the Kingdom is the UAE’s top Gulf and Arab trading partner and fourth globally.

Non-oil trade between the two nations reached AED 137 billion in 2023, with non-oil trade exchanges totaling AED 75 billion in the first half of this year, reflecting over 18% growth compared to the same period in 2023.

UAE investment inflows into Saudi markets grew by more than AED 15.7 billion in 2023, a 6% increase from 2022. Saudi cumulative investments in the UAE reached $6.5 billion by the end of 2022, making Saudi Arabia the fourth-largest investor in the UAE, according to Al Marri.

Chairman of the Saudi-Emirati Business Council Abdulhakim Al-Khaldi said the economic partnership with the UAE is strong and growing, encompassing trade and investment cooperation in most major sectors.

Vice President of the Federation of Saudi Chambers Fayez Al-Shuaili said the forum would support achieving shared goals, produce actionable recommendations, and foster a business-friendly environment to boost trade and investment growth.

Trade between the two countries reached around $30 billion last year, with further growth anticipated in trade and investment relations, he added.