Business

Oil prices jump 3% ahead of OPEC+ meeting to discuss supply cuts

Published

2 years ago

Farwa

Brent crude gains $2.73 to $91.59 a barrel.
Oil rises on prospect of big crude output cut.
Weakening US dollar boosts oil.

NEW YORK: Oil prices rose by 3% on Tuesday on expectations of a large cut in crude output from the OPEC+ producer group, and support from a weaker US dollar.

The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, look set to cut output when they meet on Wednesday. The move would squeeze supply in an oil market that energy company executives and analysts say is already tight due to healthy demand, a lack of investment and supply problems.

Brent crude gained $2.73, or 3.1%, to $91.59 a barrel at 1:35 p.m. EDT (1735 GMT). US West Texas Intermediate (WTI) crude was up $2.76, or 3.3%, to $86.39.

Sources from the group have said OPEC+, which includes Russia, is discussing output cuts in excess of one million barrels per day (bpd). Oil extended gains after Bloomberg reported that OPEC+ was considering a two million bpd cut.

“We expect a substantial cut to be made, which will not only help to tighten the physical fundamentals but sends an important signal to the market,” Fitch Solutions said in a note.

Kuwait’s oil minister said OPEC+ would make a suitable decision to guarantee energy supply and to serve the interests of producers and consumers.

Production target

OPEC+ has boosted output this year after record cuts put in place in 2020 when the pandemic slashed demand.

In recent months, the group has failed to meet its planned output increases, missing in August by 3.6 million bpd.

The production target cut being considered is justified by the sharp decline in oil prices from recent highs, said Goldman Sachs, adding that this reinforced its bullish outlook on oil.

Also boosting oil prices, the US dollar was headed for a fifth daily loss against a basket of currencies as investors speculated that the US Federal Reserve might slow its interest rate hikes.

“There’s no doubt that there’s underlying support from a weak dollar and the potential for a Fed pivot,” said Bob Yawger, director of energy futures at Mizuho in New York.

Meanwhile, a senior US Treasury official said G7 sanctions on Russia will be implemented in three phases, first targeting Russian oil, then diesel and then lower-value products such as naphtha.

Sanctions from the G7 and the European Union, which is opting for a two-phase ban, are set to begin on December 5.

Swiss lender UBS said it sees several factors that could send crude prices higher toward year-end, including “recovering Chinese demand, OPEC+ further supply cut, the end of the US Strategic Petroleum Reserve (SPR) release and the upcoming EU ban on Russian crude exports”.

Top oil traders also said at the Argus European Crude Conference in Geneva on Tuesday that economic headwinds have not yet caused significant erosion of global oil demand.

US crude oil stocks were estimated to have increased by about 2 million barrels in the week to Sept. 30, a preliminary Reuters poll showed on Monday.

Business

The amount of trade between Saudi Arabia and Pakistan hits $700 million.

Published

10 hours ago

Farwa

Through the Special Investment Facilitation Council (SIFC), Pakistan’s trade connections with Saudi Arabia have grown significantly, with bilateral trade volume rising from $546 million to $700 million and exports to the Kingdom growing by 22%.

As bilateral economic cooperation continues to grow, Saudi investors have shown a strong interest in Pakistan’s construction, energy, agricultural, and information technology sectors. The objective for exporting IT services between the two countries has been raised from $50 million to $100 million.

Saudi Arabia has set up a help desk dedicated to making it easier for Pakistani IT companies to register in the Kingdom in order to expedite commercial procedures. The goal of this program is to speed up economic collaborations between the two countries and lower administrative barriers.

The well-known Saudi restaurant chain AlBaik has revealed plans to open locations in Pakistan, which is a big step for the food service industry and should lead to the creation of new job possibilities in the area.

Officials have noted that stronger business links between the two countries lead to greater economic stability, and the SIFC has played a crucial role in promoting these trade advancements. For bilateral trade and investment projects, the Council remains a crucial facilitator.

According to a trade official with knowledge of the developments, “the establishment of dedicated support mechanisms, such as the help desk for IT companies, demonstrates a commitment to long-term economic partnership,” The goal of these programs is to improve the conditions for commercial collaboration between the two nations.

The increasing amount of trade and the diversity of investment sectors show that Saudi Arabia and Pakistan’s economic ties are changing as both countries seek to deepen their business alliances in a number of industries.

Business

After more than 50 years, Bangladesh and Pakistan resume direct trade.

Published

10 hours ago

Farwa

After more than 50 years, the two governments will resume direct bilateral trade, with Bangladesh’s food ministry announcing Sunday that it will receive a supply of 25,000 tonnes of rice from Pakistan next month.

After former Prime Minister Sheikh Hasina was overthrown last August, relations between Bangladesh and Pakistan have begun to improve after decades of tense relations.

Since then, there have been increased bilateral interactions between Bangladesh and Pakistan. Nobel laureate Muhammad Yunus, the interim government’s senior adviser, has met twice with Pakistani Prime Minister Shehbaz Sharif.

According to the food ministry, Dhaka completed an agreement earlier this month to import grains from Pakistan.

“On March 3, the first shipment of 25,000 tonnes will reach Bangladesh,” Zia Uddin Ahmed, a ministry assistant secretary, told Arab News.

“This is the first time that Bangladesh has started importing rice from Pakistan at the government-to-government level since 1971.”

Following direct maritime contact between the two South Asian countries in November—a Pakistani cargo ship stopped in Bangladesh for the first time since 1971 with imports and exports arranged by private companies—their trade relations grew.

Resuming trade with Pakistan is a significant step for Bangladesh, according to Amena Mohsin, a lecturer at North South University and a specialist in international relations.

“We want to see progress in our bilateral relationship with Pakistan. Most significantly, we are currently going through a low point dispute with India, even though we constantly diversify our partnerships.

This most recent move to purchase rice from Pakistan is really significant in this context,” she told Arab News.

Business

The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

Published

3 days ago

Farwa

As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.