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Oil steadies after two-day drop as traders examine Hormuz traffic

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Oil steadied on Wednesday following two days of severe declines as investors waited for signs of progress in talks to end the U.S.-Iran dispute and reopen commerce through the blockaded Strait of Hormuz.

Brent crude futures were up 26 cents, or around 0.33%, at $79.62 a barrel by 0110 GMT. U.S. West Texas Intermediate crude was up 0.16%, or 12 cents, to $75.90 a barrel.

Qatar claimed on Tuesday mediators are making headway in efforts to end the war, bringing oil prices lower, though Tehran has dismissed U.S. President Donald Trump’s assertion that discussions are already under way. Brent fell below $80 a barrel for the first time since July 13 on Tuesday.

“The main sticking point appears to be whether Iran will stick to its guns and demand a level of control over the waterway, and whether the US will stand its ground and reject that outcome,” IG analysts wrote in a note.

Brent fell more than 5% on Tuesday, adding to sharp losses after comments from Qatar on Monday raised expectations that an agreement may be struck shortly. Some 20% ‌of ⁠the world’s oil and liquefied natural gas passed through the strait before the war, and prices soared 50% in March alone.

Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and Trump spoke on Tuesday about attempts to reduce divisions between Washington and Tehran and boost the prospects for a durable settlement, the Emiri administration said.

Trump claimed on Monday discussions with Tehran had begun and Iran had a “last chance” to strike a deal. Iranian officials deny that any talks are taking place with the U.S.

U.S. oil and gasoline stockpiles rose and distillate stocks declined last week, market sources reported on Tuesday citing data from the American Petroleum Institute.
Crude inventories rose by roughly 2.7 million barrels in the week ended July 31, sources said on condition of anonymity.

Official figures from the EIA, the statistical arm of the U.S. Department of Energy, are due at 10:30 a.m. ET (1430 GMT) on Wednesday.

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Nine companies prequalified for GEPCO privatisation

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The Privatisation Commission Board has shortlisted nine companies to take over 51% to 100% of the shares and control of Gujranwala Electric Power Company (GEPCO).

This decision was made during a meeting of the Privatisation Commission Board, led by Prime Minister’s Adviser Muhammad Ali, where the progress on GEPCO’s privatisation and other state-owned companies was discussed.

The board received 11 applications for GEPCO’s privatisation, and nine of them were approved to move forward.

The companies that made it through the first round include Aktor Electric and Genvira Energy from Türkiye, and Engro Energy, Hub Power, Sapphire, Shirazi Investments, Artistic Milliners, and AKD Securities from Pakistan.

K-Electric officially pulled out of the bidding, and Al-Sharif Contracting did not submit the required paperwork.

The Privatisation Commission said the nine approved companies will now start the due diligence process using a virtual data room.

The meeting also looked at the progress on outsourcing Islamabad, Karachi, and Lahore airports.
The board agreed to reorganize the team handling the airport outsourcing deals.

Additionally, the board has decided to speed up the privatisation of Zarai Taraqiati Bank Limited (ZTBL) and the House Building Finance Company Limited (HBFCL), asking advisers to work quickly on these deals.

A spokesperson from the Privatisation Commission stated that all privatisation deals will be handled in a fair, competitive, and professional way.

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IMF talks likely to clear way for 1.2 billion dollar tranche

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Ongoing talks between Pakistan and the International Monetary Fund (IMF) are likely to end this week, which might lead to a staff-level agreement and the release of about $1.2 billion, according to officials from the Finance Ministry.

The discussions have centered around Pakistan’s economic performance and how well the country is meeting important goals set by the IMF program.

Officials said the IMF is happy with Pakistan’s foreign exchange reserves and liked the performance of the Federal Board of Revenue in reaching its revenue targets during the July-September period.

Meeting the tax collection target was called a major achievement for the first quarter of the current financial year, according to the sources.

Both sides also talked about a plan to start a fixed tax system for farmers by the end of the current financial year.

The State Bank of Pakistan shared details with the IMF team about steps taken to keep foreign exchange reserves stable and reduce inflation.

The central bank told the delegation that foreign exchange reserves are at $21.4 billion, and commercial banks hold an additional $5.4 billion, the sources added.

The IMF delegation is set to give Pakistan’s economic team a draft of the Memorandum of Economic and Financial Policies (MEFP).

Reaching an agreement on the MEFP would help move forward with a staff-level agreement, which could lead to the release of a $1.2 billion funding amount, the sources said.

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Oil rises after Houthis claim attack on Saudi Aramco facilities

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After the Iran-aligned Houthi rebels in Yemen claimed to have attacked Saudi Aramco, the kingdom’s state oil corporation, the price of oil increased internationally.

On October 4, Reuters reported that the Houthis claimed to have fired drones and ballistic missiles targeting Aramco installations in the Khurais region and in Riyadh, the Saudi capital.

Prices increased due to worries that Saudi Arabia, one of the main exporters of crude in the Middle East, would experience production disruptions.

Brent crude futures were up 81 cents, or 0.79%, at $103.06 per barrel as of 10:02 p.m. GMT. West Texas Intermediate crude futures in the United States increased by 46 cents, or 0.50%, to $91.57 per barrel.

One of Saudi Arabia’s primary oil-producing regions is Khurais, which the Houthis designated as a target.

Whether the attack actually damaged any infrastructure or interfered with the production of crude oil was not immediately apparent.

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