PARIS: Global demand for oil will be slightly higher than expected this year, driven by increased consumption in India, the US and Germany, the International Energy Agency (IEA) predicted Thursday.
“Estimates of global oil product demand growth in 2017 have been revised up... to 1.4 million barrels per day, on surprisingly robust preliminary second quarter demand numbers,” the IEA wrote in its latest monthly oil market report.
After “lackluster” oil demand growth in the first quarter, “there was a dramatic acceleration” in the second quarter, “due to a combination of expected increases in India, and some surprise additions in the US and Germany,” it said.
In total, global oil demand was projected to reach 98 million barrels per day this year.
And it was set to increase at around the same pace again next year to 99.4 million barrels per day, the IEA said.
In a bid to reduce the glut of oil and shore up prices, the Organization of Petroleum Exporting Countries (OPEC) agreed to cut production from the start of the year, with non-OPEC producers led by Russia partially matching the cuts.
But some observers feel that the so-called “rebalancing” of the market and the resulting rise in prices is taking too long to materialize.
The IEA called for patience.
“Oil investors are going through a period of waning confidence with prices recently returning to levels not seen since early November,” it wrote.
“The widespread interpretation of this is that investors believe, perhaps impatiently, that oil market re-balancing is taking too long with some calling for additional action by producers to speed up the process.”
The agreement to cut output had subsequently been extended and now runs until March 2018.
“And success is judged over the whole period rather than in one month,” the IEA said.
“It is OPEC’s business to manage its output and we must wait and see if the changing supply picture from the group as a whole forces an adjustment to the current arrangements.”
The IEA noted that compliance from the 10 non-OPEC producers who volunteered to cut production improved in June, “higher than the rate achieved by OPEC.”
OPEC output increased to 32.61 million bpd in June from 32.21 million bpd in May.
Producers are now set to meet in St. Petersburg in Russia on July 24 to review the output situation.
According to the IEA, OPEC’s compliance with cuts slumped to 78 percent last month from 95 percent in May as higher-than-allowed output from Algeria, Ecuador, Gabon, Iraq, the UAE and Venezuela offset strong compliance from Saudi Arabia, Kuwait, Qatar and Angola.
“Each month something seems to come along to raise doubts about the pace of the rebalancing process. This month, there are two hitches: A dramatic recovery in oil production from Libya and Nigeria and a lower rate of compliance by OPEC with its own output agreement,” the IEA said.
OPEC members Libya and Nigeria were exempted from the cuts due to years of unrest that have sapped their output. The two countries have managed to increase their combined production by more than 700,000 bpd in recent months, the IEA said.
“For fellow OPEC members, who agreed to reduce production by 1.2 million bpd, to see their cut effectively diluted by nearly two-thirds must be very frustrating, especially as their pact has, hitherto, been well observed by historical standards,” the IEA said.
The cuts have stabilized oil at around $45-50 per barrel, but prices have come under renewed pressure in recent weeks due to growing US output and little evidence of global stocks falling from record highs above 3 billion barrels.
The IEA, which advises industrialized nations on energy policy, said strong demand growth in the second half of 2017 and in 2018 should nevertheless speed up market rebalancing.
It said demand for OPEC’s crude was forecast to rise steadily through 2017 and reach 33.6 million bpd in the fourth quarter — up 1 million bpd on OPEC’s June output.
“Provided there is strong compliance with OPEC’s cuts, that would imply a hefty stock draw, even if Libya and Nigeria recover further,” it said.
The IEA said stocks in industrialized nations in May were 266 million barrels above the five-year average, down from 300 million barrels in April. Preliminary data shows a further moderate reduction in stocks for June.
The agency also said that while non-OPEC producers such as the US, Canada and Brazil were firmly back in growth mode, the recent decline in oil prices could force some US producers to reassess their prospects.
“Financial data suggests that while output might be gushing, profits are not and recent press reports quoted leading company executives saying that oil prices need to be around $50 per barrel to maintain production growth,” the IEA said.
IEA raises forecast for global oil demand this year
IEA raises forecast for global oil demand this year
Saudi Arabia drives MENA e-commerce growth during festive season: report
RIYADH: Saudi Arabia played a pivotal role in driving a 44 percent increase in e-commerce orders across the Middle East and North Africa region during the 2024 festive season, according to a joint study by Flowwow and Admitad.
The surge was fueled by trends in mobile shopping, cultural celebrations, and gifting. Saudi Arabia led the way in mobile commerce adoption, with 62 percent of online purchases made via mobile devices.
The report also highlighted significant growth in the broader MENA e-commerce market, which is expected to reach $50 billion by 2025. During the holiday season, this market experienced a substantial uptick in activity.
Flowwow, a UAE-based gifting marketplace, reported a 62 percent rise in purchases, an 86 percent increase in sales turnover, and a 15.76 percent increase in average order value compared to the previous year.
Slava Bogdan, CEO of Flowwow, said: “The festive season is one of the peak shopping periods for Flowwow gifting marketplace. It’s a time when our customers focus on celebrating and sharing joy through thoughtful gifts for their loved ones.”
He continued: “Starting with White Friday in November and continuing through the Christmas and New Year festivities, this period represents a critical shopping time in the GCC region, especially with the growing expat population.”
According to the study, November emerged as the busiest month for e-commerce, driven by Black Friday sales and preparations for Christmas and New Year. Ramadan in March and International Women’s Day in January also contributed to sales growth, with increases of 11 percent and 14 percent, respectively.
Across the region, the average order value rose from $30 in 2023 to $36 in 2024, reflecting a shift toward higher spending on quality items.
The report further revealed that mobile commerce accounted for 44.6 percent of all orders in the region in 2024. Following Saudi Arabia’s lead, the UAE recorded 60 percent adoption, Bahrain had 59 percent, and Oman followed with 58 percent. Kuwait and Qatar also saw strong mobile commerce uptake at 57 percent and 54 percent, respectively.
Marketplaces continued to dominate, contributing to 67 percent of total sales. Key product categories included electronics, fashion, and home and garden, while high-value items like furniture and jewelry drove higher AOVs.
“This year’s surge in e-commerce activity demonstrates the evolving shopping habits in the MENA region, where mobile-first experiences and marketplace-driven sales have become the backbone of consumer behavior. Our data highlights how businesses can leverage these trends to optimize their strategies and grow significantly during peak seasons,” said Anna Gidirim, CEO of Admitad.
Among the countries in the region, Kuwait recorded the highest average order value at $127, followed by the UAE at $102, Egypt at $74, Saudi Arabia at $52, and Qatar at $50.
Pakistan saw the largest sales growth at 28 percent, with notable increases in Kuwait at 17 percent and Saudi Arabia at 8 percent, according to the survey data.
The report emphasized the importance of cultural celebrations in shaping consumer behavior and underscored the growing role of mobile commerce and marketplaces in the region’s e-commerce landscape.
Closing Bell: Saudi main index ends week in red; trade volume nears $3bn
RIYADH: Saudi Arabia’s Tadawul All Share Index closed in red on Thursday, losing 68.61 points, or 0.57 percent, to settle at 11,892.44.
The total trading turnover of the benchmark index was SR10.9 billion ($2.9 billion), as 51 of the listed stocks advanced, while 185 retreated.
The MSCI Tadawul Index also decreased by 8.95 points, or 0.60 percent, to close at 1,489.42.
The Kingdom’s parallel market Nomu gained 247.96 points, or 0.79 percent, to close at 31,444.21. This comes as 33 of the listed stocks advanced, while 49 retreated.
The best-performing stock of the day was Savola Group, with its share price surging by 9.97 percent to SR36.95.
Other top performers included Middle East Specialized Cables Co., which saw its share price rise by 5.14 percent to SR41.90, and Arabian Centers Co., which saw a 3.94 percent increase to SR21.62.
Bawan Co. and Al-Baha Investment and Development Co. also saw a positive change, with their share prices surging by 3.64 percent and 3.23 percent to SR57 and SR0.32, respectively.
The worst performer of the day was Fitaihi Holding Group, whose share price fell by 6.68 percent to SR4.05.
Arabian Contracting Services Co. and AYYAN Investment Co. also saw declines, with their shares dropping by 4.17 percent and 14.42 percent to SR156.40 and SR3.87, respectively.
Moreover, Raydan Food Co. and East Pipes Integrated Co. for Industry also saw declines in today’s session, with their share prices dropping by 3.32 percent and 3.30 percent to SR22.10 and SR135, respectively.
On Nomu, the top performer was Leaf Global Environmental Services Co., with its share price surging by 13.29 percent to reach SR110.
In second place was Intelligent Oud Co. for Trading, which saw an 8.92 percent surge in terms of share price to SR48.25, followed by National Environmental Recycling Co., which saw a 6.71 percent surge in its share price to reach SR8.11.
Saudi Azm for Communication and Information Technology Co. and Gas Arabian Services Co. also fared well with 6.16 percent and 4.67 percent increases, respectively.
On the announcement front, United Electronics Co., also known as eXtra, has recommended repurchasing up to 3 million ordinary shares to be held as treasury shares, according to a filing with the Tadawul.
The board highlighted that the current market price of the company’s stock is below its fair value, prompting the buyback proposal.
The repurchase will be financed through eXtra’s internal resources, including proceeds from the successful initial public offering of its subsidiary, United International Holding Co.
Currently, 4.4 percent of eXtra’s share capital is held as treasury shares. The company highlighted that repurchased shares will not carry voting rights at shareholders’ meetings.
The proposed buyback is subject to approval by the extraordinary general meeting. It will also require compliance with financial solvency requirements outlined in the executive regulations of the Companies Law governing listed joint-stock companies.
ACWA Power Co. has also submitted a request to the Capital Market Authority to increase its capital through an SR7.13 billion rights issue, according to a bourse filing.
The company stated that further updates regarding the capital increase will be disclosed in due course.
Red Sea International Co.’s subsidiary, Fundamental Installation for Electric Work Co., has signed an agreement to increase its credit facilities with Saudi Awwal Bank by SR100 million, according to a statement to Tadawul.
As a result, the total value of the facilities will rise to SR296.11 million, with the financing period extending until Dec. 18, 2025.
The agreement includes a promissory note of SR296.10 million signed by Fundamental Installation for Electric Work, Red Sea International, and MSB Holding, as well as Fares Esamet Al-Saadi and Zeyad Al-Sayegh.
Personal guarantees of SR14.50 million and SR29.01 million were also provided by Al-Sayegh and Al-Saadi, respectively, while MSB Holding and Red Sea International issued corporate guarantees of SR101.56 million and SR151.01 million, respectively.
The additional credit facilities aim to increase the limit of letters of credit to support the import and procurement of goods for one of the company’s projects.
United Electronics Co.’s share price increased by 3.05 percent in Thursday’s trading session to reach SR98.
ACWA Power Co. Saw a 2.13 percent drop in its share price to close Thursday’s trading at SR377.60.
Red Sea International Co.’s share price dropped 1.06 percent to settle at SR0.60 by Thursday’s end.
NEOM signs JV agreement to accelerate construction automation
RIYADH: NEOM has entered into a joint venture agreement with Samsung C&T Corp. to advance the development and deployment of construction automation technology in Saudi Arabia.
This strategic partnership will unlock an initial investment exceeding SR1.3 billion ($350 million) in construction robotics. The agreement comes just a week after NEOM signed a separate deal with GMT Robotics to fast-track the delivery of its ambitious projects.
According to the statement, the collaboration with Samsung C&T will focus on automating rebar cage assembly using advanced robotic welding and tying techniques. This innovation aims to enable the creation of large, pre-manufactured reinforcement cages, a key component in construction.
Rebar cages are critical tension devices used in concrete to form reinforced structures, providing strength to infrastructure projects. “Sustainability is a core principle at NEOM, driving not only what we build but how we build it. By automating labor-intensive processes through robotics, we are pushing the boundaries of construction innovation,” said Majid Mufti, CEO of the NEOM Investment Fund.
The automated rebar assembly technology is expected to reduce manual labor by up to 80 percent, minimize material waste, enhance safety and quality, and lower rebar cage assembly costs by up to 40 percent.
NEOM also emphasized that the agreement would establish rebar cage assembly factories in the region, creating over 2,000 skilled local jobs. This move is crucial to meet the extensive construction needs for THE LINE and other key developments within NEOM.
“Developing an advanced industrial manufacturing economy at NEOM is a significant step in accelerating modern construction methods across our flagship projects,” said Bandar Ashrour, sector head of design and construction at NEOM.
“This agreement will not only boost local talent but also align with Saudi Arabia’s vision to transform the Kingdom into a leader in advanced industries, ensuring long-term economic resilience and global competitiveness.”
NEOM’s partnership with Samsung C&T marks a pivotal moment in the ongoing development of the giga-project, positioning it as a leader in advancing construction technologies.
The JV will help NEOM leverage emerging technologies and forge strategic collaborations with industry giants to revolutionize construction practices in the region. “Together, we aim to revolutionize the construction industry by incorporating cutting-edge robotics and automation solutions, which will redefine how projects within NEOM are delivered,” said Hojin Jung, president and head of corporate new business at Samsung C&T Corp.
This joint venture underscores NEOM’s commitment to transforming the construction sector and highlights its role as a frontrunner in integrating innovative technologies within large-scale infrastructure projects.
Women leaders, innovators take center stage at Forbes Summit in Riyadh
RIYADH: Women’s leadership and achievements were the focus of a dynamic summit in Riyadh, where a series of panel discussions and workshops highlighted empowerment, career success, and navigating the changing business landscape.
The Forbes Middle East Women’s Summit, a two-day event held at the Riyadh International Convention & Exhibition Center, concluded on Dec. 19, celebrating the significant contributions of women across the region.
The summit featured two primary stages: the Empowerment Arena and the She Leads Hub. Discussions at the Empowerment Arena explored vital topics, including advancing healthcare as part of Vision 2030, promoting women’s leadership, and redefining entrepreneurship.
At the She Leads Hub, panels delved into strategies for professional success, enhancing well-being and sustainability, and empowering women in leadership positions.
Notable attendees included Princess Doaa bint Mohammed, CEO of Al Mohra Education Co. and former supreme president of the Arab Women’s Authority, and Princess Lamia bint Majed Saud Al-Saud, secretary-general and board member of Alwaleed Philanthropies.
Mishaal Ashemimry, the first female aerospace engineer in the Gulf Cooperation Council and founder of MISHAAL Aerospace, delivered an inspiring open mic session titled “The Hard Decisions You Have to Make to Pursue Your Passion.” She urged attendees to take bold steps in their careers, despite the obstacles they may face.
Speaking to Arab News, Ashemimry shared that her passion for space began during a family trip to the desert of Unaizah, a governorate in Al-Qassim.
“I looked up to the sky. I was called upon by the stars because I was very curious about them. I couldn’t get enough answers about the stars, so I decided, well, I gotta go to space to understand this stuff, and the only way to go to space is to make a rocket,” she said.
Ashemimry, who overcame numerous challenges from people who doubted and underestimated her, emphasized that resilience, determination, and perseverance are essential for success in business.
“You will fail and you will stumble. You will face people who will be against you. You need to believe in yourself and be determined enough to achieve what you want,” she added.
American-Jordanian abstract artist Aida Murad, one of the summit’s featured artists, presented a colorful collection of paintings. In an interview with Arab News, Murad shared her experiences as both an artist and entrepreneur in Saudi Arabia.
“I feel very empowered here. It’s a high-value-based culture, so when your values align, things become much easier. People and companies are also highly accessible here — more so than in other countries where I’ve done business. I think it’s because there’s a genuine eagerness to invite value-aligned individuals to Saudi Arabia,” she said.
Murad also highlighted the importance of adaptability and building connections as key strategies for business expansion.
She added: “Create a target list. It sounds simple, but it’s often the most basic things that people overlook. Take the time to read your audience. There are moments when they’re overwhelmed and others when they’re more available — timing is everything.”
Furthermore, she underscored the significance of understanding Saudi Arabia’s unique business culture. “There are countless events here for networking — attend them. It’s straightforward, but here, business isn’t conducted over emails as much as it is in person or through WhatsApp. Understanding how people communicate and conduct business here is crucial to building meaningful connections.”
Saudi sports sector value to reach $22bn by 2030, driven by investments and global events
RIYADH: Saudi Arabia’s sports sector market value is projected to hit $22.4 billion by 2030, up from $8 billion, driven by a surge in investments and a growing focus on the industry.
According to the report released by SURJ Sports Investments, a company under the Public Investment Fund, the Kingdom has hosted over 100 major international events across 40 different sports since 2019.
This growth supports Vision 2030’s goal of developing the Kingdom into a global sport and entertainment hub, with Middle East and North Africa sports market revenue projected to rise from $4.79 billion in 2024 to $5.57 billion by 2029, as per data from Statista.
Major events hosted by the Kingdom include the FIFA Club World Cup, the Saudi Cup horse race, and various Formula 1 races held in Jeddah.
“These efforts culminated in December with the Kingdom officially winning the right to host the 2034 FIFA World Cup,” said Danny Townsend, the CEO of SURJ Sports Investments.
Saudi Arabia’s commitment to sports development is evident in financial investments. SURJ’s report highlighted that the sector’s contribution to the Kingdom’s gross domestic product grew from $2.4 billion in 2016 to $6.9 billion in 2019.
Annual contributions are projected to reach $16.5 billion by 2030, accounting for 1.5 percent of the national GDP. Additionally, sports investments are expected to generate over 100,000 jobs in the next decade.
Key achievements in the sector include the launch of the Professional Fighters League Middle East and North Africa, supported by SURJ Sports Investments, marking the first regional mixed martial arts league.
“This initiative opens new avenues for athletes from Saudi Arabia and the Middle East to compete in this discipline,” Townsend added.
The sector also saw a rise in infrastructure spending, with plans for $2.7 billion to develop and renovate facilities by 2028, according to the report.
The growing enthusiasm for sports among Saudi citizens has been pivotal. Participation rates in physical activities have increased, with 50 percent of the population now exercising regularly, up from 13 percent in 2015.
This shift has been supported by initiatives like the “Sports for All Federation,” which engaged over 295,000 participants in community programs in 2023 alone.
Female participation has also increased by 400 percent since 2015, and women now make up 45 percent of community sports club members. A total of 97 female coaches were registered in 2023, reflecting a 61 percent year-on-year increase.
Saudi Arabia’s investment in esports and digital gaming is another growth frontier. The country has earmarked $38 billion for the sector, with the goal of contributing $13.3 billion to the national GDP by 2030.
Hosting major events like the Esports World Cup has cemented the Kingdom’s status as a leader in the industry.
“As we approach 2025, the focus will remain on continuing efforts to achieve more accomplishments,” the CEO said.
