Saudi Aramco CEO: Oil Market is Currently Balanced

Saudi Aramco CEO Amin Nasser (Asharq Al-Awsat)
Saudi Aramco CEO Amin Nasser (Asharq Al-Awsat)
TT
20

Saudi Aramco CEO: Oil Market is Currently Balanced

Saudi Aramco CEO Amin Nasser (Asharq Al-Awsat)
Saudi Aramco CEO Amin Nasser (Asharq Al-Awsat)

Saudi Aramco CEO Amin Nasser stated that the oil market is currently balanced, even as global demand is influenced by rising interest rates and slower economic growth in China.

China, the world’s largest oil consumer, is experiencing challenges due to significant shifts in its real estate sector, a key factor in its economic growth.

Speaking during a panel titled “The Future of Energy: What Will Accelerate the Energy Transition?” at the Future Investment Initiative conference, Nasser mentioned that he anticipates global oil demand will reach approximately 106 million barrels per day in the fourth quarter of this year, with an average of 104.5 million barrels for the year.

Earlier this month, OPEC adjusted its forecast for global oil demand growth to 1.93 million barrels per day, down from 2.03 million barrels, marking the third consecutive revision. China accounted for most of this adjustment in the 2024 outlook, with OPEC attributing the revision to actual data and slightly lower demand expectations in certain areas.

Nasser highlighted a positive perspective on the situation, stating: “When people talk about China, they often amplify the negatives while overlooking the positives.”

Discussing the shift to renewable energy, Nasser emphasized the importance of reducing carbon emissions from existing energy sources as a priority, adding that the energy transition must be “affordable, safe, and sustainable.”

He confirmed that Saudi Arabia is “continuing efforts to reduce carbon emissions across all our operations... All our equipment is managed using AI and advanced data analytics.”

Pointing to the Saudi Green Initiative, he underscored the Kingdom’s commitment to the energy transition, while also ensuring continued efforts to expand oil and petrochemical activities.

Nasser further discussed energy needs in the Global South, saying: “The energy transition depends on economic investment levels... We need to start exporting to industrialized nations and enable the Global South to achieve this transition.” He noted that the Global South currently uses just one-tenth of the energy consumed by the Global North.



Turkish Central Bank Surprises with Rate Hike to 46% after Market Turmoil

A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo
A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo
TT
20

Turkish Central Bank Surprises with Rate Hike to 46% after Market Turmoil

A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo
A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo

The Turkish central bank hiked its key interest rate by 350 basis points to 46% on Thursday, in a surprise move that reversed an easing cycle and slightly boosted the lira, following market volatility in the wake of last month's arrest of Istanbul's mayor.

The bank also lifted its overnight lending rate again, to 49% from 46%, after having already raised it last month in an unscheduled decision following the arrest.

In addition, the overnight borrowing rate was lifted to 44.5% from 41%, underlining the hawkish reversal in monetary policy.

"Monthly core goods inflation is expected to rise slightly in April due to recent developments in financial markets," the central bank's policy committee said in releasing the decision, Reuters reported

Leading indicators suggest domestic demand is above projections, "suggesting a lower disinflationary impact," it said.

"Inflation expectations and pricing behaviour continue to pose risks to the disinflation process," the bank said, adding it would tighten further "in case a significant and persistent deterioration in inflation is foreseen."

The central bank had begun easing in December, when the rate was 50%, after an aggressive tightening effort since mid-2023 to bring down years of soaring prices and a series of currency crashes.

In a Reuters poll, ten of 13 respondents forecast the bank would maintain its one-week repo rate while three predicted a hike of up to 350 basis points. Most respondents expected the overnight lending rate would be held at 46%.

The lira strengthened slightly right after the decision and traded at 38.10 to the US dollar, while the benchmark stock index BIST 100 and banking index pared back some of its gains during the day.

Last month, the currency briefly hit a record low of 42 and stocks and bonds plunged after the detention of Istanbul Mayor Ekrem Imamoglu, pushing economic authorities to take several measures to ease the market fallout.

Economists expect the roughly 3% weakening of the lira to lift April and May inflation readings. Annual inflation had slowed to 38.1% in March, and was 2.46% month-on-month, lower than forecast.

Imamoglu - President Erdogan's chief rival - is now jailed pending trial in legal moves that sparked the biggest protests in more than a decade and broad criticism of a politicised judiciary and eroding rule of law, claims the government denies.

The lira steadied near 38 to the dollar and Turkish assets recovered somewhat after the central bank sold some $50 billion since Imamoglu's arrest to stabilise the situation, and it bought some 120 billion lira ($3.15 billion) worth of bonds.

The central bank also raised its overnight lending rate by two percentage points to 46% and paused funding through one-week repo auctions, effectively tightening funding conditions by 400 basis points.

On Thursday the bank said it will closely monitor liquidity conditions and added: "In response to the recent developments in financial markets, additional measures to support the monetary transmission mechanism were quickly put in place."

The rate decision came amid global market turmoil caused by what has become an all-out trade war between the United States and China, with both sides ratcheting up their import tariffs.