LONDON: US shale oil output is set to surge over the next five years stealing market share from OPEC producers and moving the country, once the world’s top oil importer, closer to self sufficiency, the International Energy Agency said on Monday.
A landmark deal in 2017 between OPEC and other oil producers including Russia to curb output to reduce global oversupply materially improved the outlook for other producers as oil prices rose sharply throughout the year, the IEA said.
As a result, US oil output has resumed sharp growth over the past year and is expected to rise by 2.7 million barrels per day (bpd) to 12.1 million bpd by 2023, as growth from shale fields more than offsets declines in conventional supply.
Natural gas liquids will add another 1 million bpd to reach 4.7 million bpd by 2023.
With total US liquids production set to reach nearly 17 million bpd in 2023, up from 13.2 million in 2017, the United States will be by far the world’s top oil liquids producer.
“The United States is set to put its stamp on global oil markets for the next five years,” Fatih Birol, the IEA’s executive director, said in a medium-term market outlook.
Oil production growth from the US, Brazil, Canada and Norway will more than meet global oil demand growth through 2020, the IEA said, adding that more investment would be needed to boost output after that.
Non-OPEC production is set to rise by 5.2 million bpd by 2023 to 63.3 million bpd with the United States alone accounting for nearly 60 percent of global supply growth.
Growth will be led by the Permian Basin in Texas and New Mexico, where output is expected to double by 2023.
“Despite talk of capital discipline and increased focus on returns rather than growth, US producers regrouped quickly when oil prices stabilized and began to rise,” the IEA said.
Production in 2017 rose by 670,000 bpd as drillers added 200 rigs “beating all expectations,” the IEA said.
Last year, the IEA forecast US shale production to grow by 1.4 million bpd by 2022 with oil prices of up to $60 a barrel and by up to 3 million barrels with oil at $80 a barrel.
By contrast, output from OPEC producers will grow at a much slower pace, the IEA said, adding it expected Venezuelan production declines to accelerate offsetting gains in Iraq.
As a result, OPEC’s crude oil capacity will grow by just 750,000 bpd by 2023.
With forecast capacity of 36.31 million bpd, OPEC will be supplying less than 35 percent of global demand by 2023 compared to its usual share of around 40 percent.
Boosted by economic growth in Asia and a resurgent US petrochemicals industry, global oil demand will increase by 6.9 million bpd by 2023 to 104.7 million, according to the IEA.
That means demand growth of around 1.1 percent per year on average.
Despite steep non-OPEC oil production gains, the IEA warned that a decline in mature fields meant more investment was needed across the globe after 2020.
“Upstream investment shows little sign of recovering from its plunge in 2015-2016, which raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020,” it said.
IEA sees US oil output surge stealing OPEC share in next 5 years
IEA sees US oil output surge stealing OPEC share in next 5 years
Oil Updates – crude heads for weekly loss as Chinese demand continues to underperform
SINGAPORE: Oil prices fell on Friday on signs demand in China, the world’s biggest crude importer, continues to underperform amid its uneven economic recovery.
Brent crude futures were down 65 cents, or 0.9 percent, at $71.91 a barrel by 7:50 a.m. Saudi time. US West Texas Intermediate crude futures were down 62 cents, or 0.9 percent, at $68.08.
For the week, Brent is set to fall 2.7 percent while WTI is set to decline 3.3 percent.
“While oil prices have somewhat stabilized around the $71.00 level of support this week, the lack of a concrete bullish catalyst suggests that price recovery remains tepid for now,” Yeap Jun Rong, market strategist at IG, said in an email.
The prospect of higher supplies from the US and OPEC+ along with doubts over China’s economic recovery continue to be of concern, while the odds of a December rate cut are now “closer to a coin flip” under a less dovish Federal Reserve, Yeap added.
China’s oil refiners in October processed 4.6 percent less crude than a year earlier, falling year-on-year for a seventh month, amid the closures of some plants and reduced operating rates at smaller independent refiners, data from the National Bureau of Statistics showed on Friday.
The decline in run rates occurred as China’s factory output growth slowed last month and demand woes in its property sector showed few signs of abating even though consumer spending increased, government data showed.
Oil prices also fell this week as major forecasters indicated market fundamentals remained bearish.
The International Energy Agency forecast global oil supply will exceed demand in 2025 even if cuts remain in place from OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, as rising production from the US and other outside producers outpaces sluggish demand.
The Paris-based agency raised its 2024 demand growth forecast by 60,000 barrels per day to 920,000 bpd, and left its 2025 oil demand growth forecast little changed at 990,000 bpd.
OPEC this week cut its forecast for global oil demand growth for this year and 2025, highlighting weakness in China, India and other regions, marking the producer group’s fourth-consecutive downward revision to its 2024 outlook.
US crude inventories last week rose by 2.1 million barrels, the Energy Information Administration said on Thursday, much more than analysts’ expectations for a 750,000-barrel rise.
Gasoline stocks fell by 4.4 million barrels last week to the lowest since November 2022, the EIA said, compared with analysts’ expectations in a Reuters poll for a 600,000-barrel build.
Distillate stockpiles, which include diesel and heating oil, also fell unexpectedly by 1.4 million barrels, the data showed.
Fortune Global Forum to be held in Riyadh in 2025
RIYADH: American football legend Tom Brady tossed a football to Saudi Arabia's General Secretariat of Council of Ministers Fahd bin Abdulmohsan Al-Rasheed who announced that the 2025 Fortune Global Forum will be held in Riyadh.
The elite of the world's business leaders will converge on Riyadh next year as the Fortune Global Forum makes its inaugural appearance at the Saudi capital.
Al-Rasheed joked that if he fumbled the ball, it was Brady's fault and if he caught it he is “a great player.”
With an epic football toss from @TomBrady, His Excellency Fahd bin Abdulmohsan Al-Rasheed announces the 2025 #FortuneGlobalForum will be held in Riyadh, Saudi Arabia.
— FORTUNE (@FortuneMagazine) November 12, 2024
Next year, we'll gather leaders of the world’s biggest multinational companies to talk about the dynamic… pic.twitter.com/Nrabd1LWrG
The event, organized by Fortune magazine, is attended by presidents, chairmen and CEOs, as well as prestigious economists.
Fahd bin Abdulmohsan Al-Rasheed, chairman of the Saudi Convention and Exhibitions General Authority, said for the past 30 years the forum had brought together “the titans of industry around the world to the forefront of economic development.”
Speaking at this year’s forum, which concluded in New York on Tuesday, he added: “And that forefront today is the Kingdom of Saudi Arabia.”
He urged delegates to visit the Kingdom’s business epicenter to see what it had to offer.
Saudi Arabia launches company to transform Asir into global tourism hub
RIYADH: Saudi Arabia’s Asir region has launched a new tourism venture through a partnership with the aim of creating a holding company to transform the area into a global tourist destination.
The collaboration between Aseer Investment Co., a subsidiary of the Public Investment Fund, and Rikaz Real Estate, aligns with the goal of transforming Asir into a world-class tourist destination that combines authentic heritage with sustainable development, according to the Saudi Press Agency.
The holding company seeks to contribute to enhancing a tourism environment that enriches guests’ experiences with unique offerings, connecting visitors to local culture and community traditions, SPA reported.
It is also committed to promoting sustainable tourism by protecting the environment, developing local communities, and collaborating with artisans and local businesses to preserve the authenticity of Asir’s heritage.
In October, the Kingdom’s Abha city secured a new investment partnership to boost tourism by developing culturally rich dining and retail experiences.
PIF firm Aseer Investment Co. signed the deal with Nimr Real Estate and the National Co. for Tourism, or Syahya, to propel the project, the Saudi Press Agency reported.
This aligns with the objectives of developing Abha, which will offer a range of benefits, including retail stores that reflect the cultural heritage of the Asir region.
The partnership also seeks to be a model for multiple collaborations with private sector investors and create more regional job opportunities.
Investments in the region are expected to create between 14,000 and 18,000 job prospects and contribute to up to 6 percent of the non-oil gross domestic product within 10 years, as outlined by AIC Chief Executive Osama Al-Othman in February.
Saudi Arabia emerged as a leader in tourism growth among G20 nations, experiencing a 73 percent increase in international visitors in the first seven months of 2024 compared to 2019.
According to the UN World Tourism Barometer report in September, the Kingdom welcomed 17.5 million international tourists during this timeframe, showcasing its growing allure as a global travel destination.
This surge is part of the nation’s Vision 2030 initiative, which aims to diversify the economy and reduce dependence on oil revenues.
“Saudi Arabia cements its global leadership and takes the first spot among G20 countries in international tourist arrivals growth, with a 73 percent increase in the first seven months of 2024 compared to the same period in 2019,” stated the Saudi Tourism Ministry on X.
Under the National Tourism Strategy, the Kingdom aims to attract 150 million visitors by 2030 and increase the sector’s contribution to the nation’s gross domestic product from 6 percent to 10 percent.
These goals reflect the country’s commitment to strengthening its tourism sector and enhancing its global appeal.
IMF, Saudi Arabia announce new annual conference tackling global economic challenges
RIYADH: The International Monetary Fund and Saudi Arabia will jointly organize a high-level annual conference in AlUla to discuss global economic challenges, it has been announced.
The AlUla Conference for Emerging Market Economies will bring together a select group of finance ministers, central bank governors, and policymakers, along with leaders from the public and private sectors, representatives from international institutions, and members of academia.
According to a joint statement by Kristalina Georgieva, managing director of IMF and the Minister of Finance Mohammed Al-Jadaan, the first edition of this series will be held from Feb. 16-17, 2025.
“The world is confronting deeper and more frequent shocks, including from conflicts, geoeconomic fragmentation, pandemics, climate change, food insecurity, and the digital divide,” according to the statement.
They continued: “If not addressed adequately, these shocks put at risk emerging market economies’ hard-won improvements in living standards. Such setbacks would affect large segments of the world population and put at risk global growth and macro-financial stability.”
The gathering will offer a platform to exchange views on domestic, regional, and global economic developments and discuss policies and reforms to spur inclusive prosperity and build resilience supported by international cooperation.
Recent economic issues affecting the global landscape include rising inflation rates, driven by supply chain disruptions and increased demand for goods post-pandemic.
Supply chain delays continue to impact the availability of essential products, causing bottlenecks in manufacturing and increasing costs.
Additionally, geopolitical conflicts, such as the war in Gaza, have disrupted energy supplies and food exports, leading to global food insecurity and fuel price volatility.
Concerns over the using the Red Sea shipping lane increased dramatically at the end of 2023, when Houthi militants stepped up attacks on vessels in the wake of the escalation of the Israel-Hamas conflict.
The effects of these challenges pose significant risks to economic stability, especially for emerging markets that are more vulnerable to such global shocks.
The AlUla conference is the latest example of the growing relationship between Saudi Arabia and the IMF, with the organization in April establishing its first office in the Middle East and North Africa region in Riyadh.
The facility was launched during the Joint Regional Conference on Industrial Policy for Diversification, jointly organized by the IMF and the Ministry of Finance, on April 24.
The new office aims to strengthen capacity building, regional surveillance, and outreach to foster stability, growth, and integration, thereby promoting partnerships in the Middle East and beyond, according to the Saudi Press Agency.
The work hub will promote closer collaboration between the IMF and regional institutions, governments, and other stakeholders, according to the SPA report.
The IMF also expressed its gratitude to the Kingdom for its financial contribution aimed at supporting capacity development in member countries, including fragile states.
Closing Bell: Saudi Arabia’s TASI ends in the red, trading volume hits $2.95bn
RIYADH: The Tadawul All Share Index concluded the last session of the week at 11,791.18 points, down by 139.27 points or 1.17 percent.
The MSCI Tadawul 30 Index also saw a decline, dropping 19.18 points to close at 1,481.36, reflecting a 1.28 percent loss. In contrast, the parallel market Nomu finished Thursday’s trading at 29,467.71 points, up 262.18 points or 0.90 percent.
TASI reported a trading volume of SR11.10 billion ($2.95 billion), with 51 stocks advancing and 182 declining. The top performer of the day was Saudi Cable Co., which saw its share price surge by 5.10 percent to SR92.70.
Other strong performers included Shatirah House Restaurant Co., which gained 3.75 percent to reach SR21, and Arabian Mills for Food Products Co., which rose by 3.08 percent to SR53.60. Naseej International Trading Co. and Saudi Real Estate Co. also posted notable gains.
The worst performer was Saudi Real Estate Co., which dropped 4.94 percent to close at SR10. Alkhaleej Training and Education Co. and Red Sea International Co. also suffered significant losses, with their share prices falling by 4.90 percent to SR29.10 and 4.84 percent to SR68.80, respectively. Astra Industrial Group and Al-Omran Industrial Trading Co. were also among the day’s largest decliners.
On the parallel market, Nomu, Alqemam for Computer Systems Co. was the top gainer, rising by 9.57 percent to SR103. Other gainers included Dar Almarkabah for Renting Cars Co., which climbed 9.10 percent to SR42.55, and Horizon Educational Co., which rose by 7.58 percent to SR79.50. Mulkia Investment Co. and Knowledge Tower Trading Co. also saw significant increases.
On the losing side of Nomu, WSM for Information Technology Co. recorded the largest drop, with its share price falling by 6.18 percent to SR44. Osool and Bakheet Investment Co. and Natural Gas Distribution Co. also experienced notable declines, with their shares dropping by 5.37 percent to SR37.85 and 5 percent to SR57, respectively.
