Oil Rises as Falling US Inventories Refocus Market on Demand

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
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Oil Rises as Falling US Inventories Refocus Market on Demand

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo

Oil rose on Wednesday after plunging more than 2% in the previous session as reports of falling US crude oil and fuel inventories refocused investors on robust demand in the world's top oil consumer.

Brent crude climbed by 30 cents, or 0.4%, to $81.07 a barrel by 0358 GMT. US West Texas Intermediate crude gained 39 cents, or 0.5%, to $77.46 a barrel, Reuters reported.

US crude oil stocks fell by about 6.1 million barrels in the week ended April 21, according to market sources citing American Petroleum Institute (API) figures on Tuesday. Analysts had expected crude inventories to fall by about 1.5 million barrels.

Gasoline inventories fell 1.9 million barrels last week, while distillate inventories rose by 1.7 million barrels, the sources said the API reported.

Oil prices dived more than 2% on Tuesday, returning to the near the same level before the Organization of the Petroleum Exporting Countries (OPEC) and other producer allies such as Russia, known as OPEC+, announced an additional output reduction in early April.

The upward momentum brought by the OPEC cut is running out and Russian oil exports did not show any obvious decrease, leaving the supply-side with no further supports, said Song Yang, analyst from China Galaxy Futures in a note.

While the API data pushed the market higher on Wednesday, lingering economic concerns and expectations of further interest rate hikes that could curtail fuel demand growth are countering the signs of improving short-term consumption gains.

US consumer confidence dropped to a nine-month low in April as worries about the future mounted, further heightening the risk that the economy could fall into recession this year.

"(The data) revealed a sharper-than-expected moderation in consumer confidence, which adds to the list of downside surprises seen since the start of April and points to a more downbeat economic outlook," said Yeap Jun Rong, market analyst at IG, in a note to clients.

The market is watching out for uncertainties around any spillovers from First Republic Bank which on Monday reported a flight in deposits of more than $100 billion, stoking fears of a potential banking crisis that could impact the US economy.

Investors also showed concern that potential new interest rate hikes by inflation-fighting central banks could slow economic growth and dent energy demand in the United States, Britain and the European Union.

The US Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates at their coming meetings. The Fed meets May 2-3.



Diriyah Company Awards $600 Million Contract to Salini Saudi Arabia for 400 Retail Units

The heart of Diriyah reflecting 300 years of history and heritage (Asharq Al-Awsat)
The heart of Diriyah reflecting 300 years of history and heritage (Asharq Al-Awsat)
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Diriyah Company Awards $600 Million Contract to Salini Saudi Arabia for 400 Retail Units

The heart of Diriyah reflecting 300 years of history and heritage (Asharq Al-Awsat)
The heart of Diriyah reflecting 300 years of history and heritage (Asharq Al-Awsat)

Diriyah Company has awarded a major new $600 million contract for construction work on the high-profile Diriyah Square retail precinct to Salini Saudi Arabia, a subsidiary of the Webuild Group.

The square is located at the heart of Diriyah, the City of Earth, within the unique Najdi-inspired architectural Diriyah Masterplan.

It is designed to develop a vibrant retail district featuring a mix of 400 iconic retail, leisure, and dining brands.

The district will emphasize exceptional customer experiences, focusing on pedestrians and offering unparalleled shopping, dining, and living opportunities. Also, the square aims to pioneer the future retail and leisure landscape of the region.

This marks the third major involvement of the Webuild Group in helping to create the unique flagship retail environment in Diriyah.

Salini is already well advanced in constructing a 10,500-space car park beneath Diriyah Square, which will be among the largest in the world.

The car park will include bus stations, dedicated taxi and VIP drop-off areas, and an underground four-lane gyratory connecting the subterranean Masterplan, providing best-in-class vehicle access and customer parking experiences across Diriyah Square.

Salini is also nearing completion of the structural engineering for all above-ground Diriyah Square assets, including the retail spaces, hotels, branded residences, offices, and the Grand Mosque, according to Diriyah Company.

The contract for developing the retail district includes constructing 73 individual buildings and 400 shell-and-core retail units over a built-up area of 365,340 square meters, covering facades, finishes, and fit-outs of the units.

Every building will use traditional Najdi architectural design themes to create a unique pedestrianized retail environment in the heart of Diriyah reflecting 300-years of history and heritage.

Commenting on the latest contract award, Diriyah Company Group CEO Jerry Inzerillo said: “Diriyah Square is one of our most exciting, anticipated, and prestigious districts, and we are extremely pleased to have signed with Salini to deliver it, bringing their immense global experience to the table.”

“It is yet another significant milestone in our development journey and will help set the stage for Diriyah Square’s retail spaces to welcome a diverse array of shoppers from our residential communities, surrounding office spaces, and the millions who visit us every year,” he added.

Webuild CEO Pietro Salini said: “We are proud to contribute to a project of such symbolic and strategic importance to Saudi Arabia.”

“This will further strengthen our presence in the Kingdom and positively impact both the area and the local community,” he stated.

Salini also said: “We are excited about developing this new phase of Diriyah Square, an integral part of an iconic project. The Webuild Group has been present in Saudi Arabia since 1966, delivering more than 90 projects.”

He added that his company will remain committed to supporting the Kingdom in developing some of the world’s most complex infrastructure projects, particularly in areas such as civil buildings, sustainable mobility, and desalination.