LONDON/NEW YORK: Brent oil futures prices plunged again on Tuesday, extending oil market panic into a second day with no end in sight to a swelling global crude glut as the coronavirus pandemic has obliterated demand for fuel.
Monday and Tuesday have been two of the most turbulent days in the history of oil trading, as investors confronted the reality that worldwide supply will overwhelm demand for months or years and current production cuts to offset that glut are nowhere near sufficient.
After Monday’s trade, when the front-month May US contract fell into negative territory for the first time in history, Tuesday set a new milestone as more than 2 million contracts for US crude for delivery in June changed hands, the busiest day in history, according to exchange operator CME Group.
Brent futures for June delivery settled down 24 percent to $19.33 a barrel, their lowest since February 2002. US West Texas Intermediate (WTI) crude for June, the front-month contract as of Wednesday, fell $8.86, or 43 percent, to settle at $11.57.
The US May contract, which expired on Tuesday, rebounded from its deep dive into negative territory, rising to $10.01 from the previous day’s settlement at minus $37.63.
Oil inventories have been building for weeks after Saudi Arabia and Russia early in March failed to come to terms on extending output cuts as the coronavirus pandemic worsened. Since that time, the pandemic’s spread has cut fuel demand by roughly 30 percent worldwide.
The Organization of the Petroleum Exporting Countries and its allies, including Russia, finally announced sweeping cuts in production in early April, amounting to almost 10% of global supplies. But with economies virtually at a standstill due to coronavirus lockdowns, that is not enough to offset the declining demand.
Both Saudi Arabia and Russia said on Tuesday they were ready to take extra measures to stabilize oil markets along with other producers, but they have not taken action yet.
“The math is pretty simple. Current oil production is about 90 million barrels per day, but demand is only 75 million barrels per day,” said Gregory Leo, chief investment officer and head of global wealth management at IDB Bank.
Meanwhile, in Texas, however, oil and gas regulators declined to force producers to curtail oil output. The Texas Railroad Commission, which regulates energy companies in that state, had considered intervening in markets for the first time in nearly 50 years.
“Texas punted their decision and with OPEC not showing any urgency, that pretty much means the world will run out of room to store oil by the second week of May,” said Edward Moya, senior market analyst at OANDA in New York.
The main US storage hub in Cushing, Oklahoma, delivery point for WTI, is expected to be full within weeks.
Official US government data shows that storage at Cushing was just 70 percent full as of mid-April. Traders, however, said that whatever was left then has been spoken for by firms sending oil to the hub right now.
US President Donald Trump called on the government to make funds available to the US oil and gas industry, calling Monday’s crash a “financial squeeze” and mooting a halt to Saudi imports.
US crude inventories rose by 13.2 million barrels in the week to April 17 to 500 million barrels, data from industry group the American Petroleum Institute showed on Tuesday. Analysts had expected a build of 13.1 million barrels.
Official government data is due to be released on Wednesday.
Brent oil futures plunge as growing glut feeds market panic
https://arab.news/w5pwc
Brent oil futures plunge as growing glut feeds market panic
- More than 2 million contracts for US crude for delivery in June changed hands
- Brent futures for June delivery settled down 24 percent to $19.33 a barrel
Emirates airline to resume flights to Beirut
DUBAI: Emirates airline will resume flights to Beirut on Feb. 1 after a four-month suspension triggered by conflict between Israel and Hezbollah, a statement said on Friday.
The Middle East’s biggest airline will first offer a daily return flight and scale up to two services per day from April 1, the statement said.
Emirates will also resume a daily flight to the Iraqi capital, Baghdad, from Feb.1, it added.
The Dubai-based, state-owned carrier was one of several regional airlines to suspend Beirut services in late September as tensions soared between Israel and Iran-backed Hezbollah.
A truce came into effect on November 27, ending over a year of hostilities.
Saudi Arabia champions youth as it drives talent development to fuel Vision 2030
- Kingdom is encouraging entrepreneurship
- 76 percent of young Saudis view the government as a positive change-driver
RIYADH: As Saudi Arabia redefines its economy and aspirations under Vision 2030, the Kingdom is placing a tremendous focus on its most valuable asset — its youth.
Through a dynamic blend of public-private partnerships, targeted training, and groundbreaking programs, Saudi Arabia is setting the stage for a new generation of skilled professionals who will not only fuel growth but also transform the economic landscape.
Figures from the General Authority for Statistics released in 2023 show that 63 percent of the Kingdom’s population is under 30 years old, and the government and private sector are working hand-in-hand to shape the coming era.
“Digital literacy is essential, as technological advancements require the younger generation to not only be proficient in the latest advancements but also drive innovation in areas like AI and data analytics,” Riyadh Al-Najjar, PwC Middle East chairman and Saudi Arabia country senior partner, told Arab News
He added: “An entrepreneurial mindset is equally important, as the success of Vision 2030 relies on growing the private sector. Young people need to be able to spot opportunities, think critically, and solve problems that add value to the economy.”
On a similar perspective, Zehar Filemban, executive director in talent development at Red Sea Global, noted the essential skills Saudi Arabia is focusing on to prepare its youth for roles in an evolving economy.
In emerging fields like technology, tourism, and renewable energy, digital literacy is crucial, enabling young Saudis to work with advanced technologies, while problem-solving equips them to tackle complex challenges and project management ensures efficient handling of tasks and responsibilities.
“By nurturing these skills, we aim to empower the next generation to contribute effectively to the Kingdom’s evolving economy,” Filemban told Arab News.
Alongside these technical skills, critical thinking, adaptability, and leadership are equally important.
Critical thinking allows young professionals to approach problems analytically, adaptability helps them respond effectively to rapid changes, and leadership empowers them to drive projects and inspire teams.
By cultivating both technical and soft skills, Saudi Arabia aims to equip the next generation to lead in a competitive job market, fostering innovation and supporting the country’s ambitious economic transformation under Vision 2030.
“An entrepreneurial mindset is equally important, as the success of Vision 2030 relies on growing the private sector,” Al-Najjar said, underscoring that the future workforce must not only navigate established pathways but also create their own.
Robust youth engagement
PwC's Middle East Youth Outlook 2024 report underscores the importance of local talent development for the Kingdom’s future, indicating that a large portion of Saudi youth are highly motivated to contribute to the nation's progress.
The report reveals that 76 percent of young Saudis view the government as a positive change-driver, reflecting trust in the Vision 2030 agenda and a desire to align with national goals.
It also emphasizes that Saudi youth are keenly interested in career pathways that not only offer upward mobility but also provide opportunities to build skills in fields critical to the Kingdom’s sustainable future, like technology, healthcare, renewable energy, and tourism.
Filling the skills gap via private-public partnerships
Private companies in Saudi Arabia are working alongside government initiatives to improve youth employment and skill development.
"We actively partner with various ministries and educational institutions to offer tailored training programs that address industry-specific needs,” Filemban said.
He continued: “These collaborations, such as the RSG Elite Graduate Program, RSG Scholarship Program, Red Sea Vocational Training Program, and partnerships with local educational institutions, ensure that Saudi youth gain practical, hands-on experience while building a strong foundation for their careers, ultimately aligning with the goals of Vision 2030 and beyond.”
The alignment of private companies with government initiatives has been essential to the Kingdom’s approach, creating job readiness programs that meet the demands of the local labor market.
PwC, along with other private-sector giants like Aramco, NEOM, and Red Sea Global, are deeply committed to skill development and Saudization, reducing dependency on expatriate labor by equipping local talent with the expertise necessary to fill high-demand roles.
The firm’s Hemam program provides Saudi youth with training in consulting and technology, coupled with mentorship to bridge the gap between education and employment.
“It is also important for the private sector and educational institutions to continue working closely together, as it plays a pivotal role in preparing young Saudis for their careers,” Al-Najjar said.
He added: “Universities and academic institutions are increasingly working alongside businesses to ensure that curricula and training programmes are aligned with the specific needs of in demand sectors.”
Al-Najjar went on to say: “This alignment ensures that graduates possess the needed skills and are well-equipped to transition from education to employment seamlessly.”
Encouraging entrepreneurship
Saudi Arabia’s burgeoning entrepreneurial ecosystem is also playing a significant role in economic diversification.
The government, along with private-sector incubators such as The Garage and Flat6Labs, offers young business minds vital resources, including funding, mentorship, and technical support.
According to Al-Najjar, the private-sector incubators across the Kingdom play a significant role by providing entrepreneurs with access to technical expertise, strategic advice, and an extensive network of investors.
This guidance is helping young Saudis transform innovative concepts into viable businesses, fostering a generation of self-starters who contribute to job creation and economic growth.
Programs like these underscore the rise in entrepreneurial interest among Saudi youth, who are increasingly drawn to fields such as technology, renewable energy, and gaming.
Building a sustainable workforce: Saudization and beyond
Saudi Arabia’s shift towards a sustainable, homegrown workforce involves not only training but also the transfer of knowledge from foreign experts to Saudi nationals.
Companies are focused on workforce localization and training, with entities like Red Sea Global launching initiatives to empower Saudi talent to take on roles in fields such as tourism and renewable energy.
Filemban described RSG’s Global Leader Program as a targeted leadership initiative aimed at building capacity within Saudi nationals.
“This approach creates a sustainable workforce and also fosters a culture of ownership and innovation, empowering Saudis to take on roles across key sectors. We are also investing in a range of leadership initiatives, including the RSG Global Leader Program,” he said.
Filemban added: “Young Saudis are showing particular interest in sectors like tourism, technology, and renewable energy, areas that align closely with the goals of Vision 2030.”
He further explained that by connecting them with industry experts and providing resources, they enable them to transform their innovative concepts into sustainable businesses that contribute to the Kingdom’s economic growth.
Looking ahead to what’s next
When asked about further steps that Saudi Arabia should take to retain and attract talent in fields crucial to Vision 2030, Filemban noted that the Kingdom must continue to develop a robust talent ecosystem that not only attracts skilled professionals but also retains them in essential fields
“This can be achieved by expanding partnerships with global educational institutions, investing in lifelong learning programs, and enhancing incentives for skill development,” he said.
Filemban continued: “At Red Sea Global, we are committed to developing comprehensive career pathways, creating opportunities for continuous professional growth, and fostering an environment where top talent is valued and nurtured.”
On his side, Al-Najjar emphasized the importance of Saudi Arabia taking active steps to attract and retain talent in fields critical to the country’s future, even beyond Vision 2030.
“A key priority will be creating flexible, purpose-driven workplaces that connect back to the demand of today’s workforce. As highlighted in our Hopes and Fears Survey, 57 percent of workers value work-life balance and job security,” he said.
Al-Najjar continued: “This makes it essential for businesses to expand initiatives such as remote working policies, wellness programmes, and inclusive environments.
He added that this involves expanding public-private partnerships for advanced training, enhancing the appeal of fields like cybersecurity, artificial intelligence, and clean energy, and offering incentives and career growth opportunities for young professionals.
“By focusing on these areas, Saudi will have created a dynamic ecosystem that not only attracts global professionals but also nurtures and retains local talent who will drive the Kingdom’s economic transformation,” Al-Najjar said.
The Middle East Youth Outlook 2024 report recommends that Saudi Arabia continue to invest in scholarships, internships, and public-private collaborations to attract young professionals to emerging industries.
In doing so, the Kingdom is not only positioning itself as a talent hub but also fostering an environment where local youth can thrive and innovate.
Overcoming the challenges
Despite these extensive efforts, challenges remain. As Filemban pointed out: “One of the core challenges is bridging the gap between the skills young Saudis acquire in educational institutions and the rapidly evolving needs of the job market.”
The rapid pace of technological advancement, combined with the evolving demands of industries like AI and data analytics, requires continuous upskilling.
Initiatives such as Vision 2030’s Human Capability Development Program aim to address this by aligning education with industry requirements, preparing youth for careers in key sectors through practical skills and soft skills training.
In response, companies like Red Sea Global and PwC are working closely with universities and vocational training centers to develop curricula and training programs that meet industry standards.
This alignment between academia and industry is crucial to ensuring that young Saudis are equipped with relevant, market-driven skills, enabling them to transition smoothly into the workforce.
Oil Updates — prices poised for weekly fall on Trump’s energy policies
LONDON: Oil prices were little changed on Friday but headed for a weekly decline after US President Donald Trump issued a sweeping plan to boost US production and demanded OPEC lower crude prices.
Brent crude futures were down 9 cents at $78.20 a barrel by 7:45 a.m. Saudi time on Friday, while US West Texas Intermediate crude dipped 9 cents to $74.53.
For the week, Brent was down 3.18 percent so far, while WTI shed 4.28 percent.
“Crude prices have been easing all through this week, as investors trimmed war premiums after the Gaza ceasefire while bracing for Trump’s energy policy change,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“For now, Trump is being unpredictable as predicted, setting oil prices up for headlines-oriented volatility ahead,” Sachdeva added.
Trump, during his speech on Thursday at the World Economic Forum in Davos, Switzerland, said he would demand that the Organization of the Petroleum Exporting Countries bring down the cost of crude barrels.
He also said he would ask Saudi Arabia to increase a US investment package to $1 trillion, up from $600 billion reported by the Kingdom’s state news agency earlier in the day.
Trump had declared a national energy emergency on Monday, rolling back environmental restrictions on energy infrastructure as part of a sweeping plan to maximize domestic oil and gas production.
On Wednesday, he vowed to hit the EU with tariffs and impose 25 percent tariffs against Canada and Mexico, and said his administration was considering a 10 percent punitive duty on China.
As attention shifts to a possible February timeline for new tariffs set by Trump, caution will likely persist in the market as any new trade restrictions will carry negative implications for global growth, potentially weighing on oil demand prospects, said Yeap Jun Rong, market strategist at IG.
Traders expect oil prices to range between $76.50 and $78 a barrel, Yeap added.
While bullish catalysts like a significant drawdown in US crude stocks are providing temporary positive swings, an overall oversupplied global market and ailing projections of Chinese demand continue to weigh on crude futures, Phillip Nova’s Sachdeva said.
US crude inventories last week hit their lowest level since March 2022, according to the US Energy Information Administration.
The EIA report, issued a day late because of a US holiday on Monday, said crude stockpiles fell by 1 million barrels to 411.7 million barrels in the week to Jan. 17, marking a ninth consecutive weekly decline.
Saudi Arabia, UAE poised to become trade ‘super-connector hubs,’ WEF panel hears
- Agility’s Henadi Al-Saleh highlights that innovation, investment help countries to capitalize on disruption in global trade
LONDON: Saudi Arabia is on track to emerge as a “super-connector hub,” leveraging ongoing global trade disruption to its advantage, according to experts speaking at the World Economic Forum in Davos on Thursday.
Henadi Al-Saleh, chair of the board of directors at Agility, a global leader in supply chain services, highlighted the Gulf Cooperation Council’s significant investments in infrastructure as a driving force behind this transformation.
She said: “(In) the past few years, the level of activity, especially around cargo, has increased several fold.
“If I look at the GCC, where we have invested in warehouses, and at the Emirates in Saudi Arabia, one of our key platforms, (they are) set to become super-connector hubs.
“These countries are investing in infrastructure, doubling down, and the level of activity is increasing.”
Al-Saleh identified digitalization as a key value in this development, saying that “in a time with so much uncertainty, having that clarity and understanding, even when changes take place, it gives me visibility. (With the digital tools) I know what the rules (are) and (how) I need to adjust.”
She added: “That’s one critical aspect in which you see these super hubs benefiting.”
While the level of trade has continued to grow since the end of the pandemic, socioeconomic and political factors have continued to disrupt industry.
Experts have said that US President Donald Trump’s second term is expected to exacerbate the disruption, with the president supporting potential trade tariffs on multiple exporting nations.
Chile’s Minister of Foreign Affairs Alberto van Klaveren acknowledged the challenges but also pointed to opportunities arising from these shifts.
He said: “There are possibilities. Some economies are opening up. We signed the CEPA Agreement (Comprehensive Economic Partnership Agreement) with the Emirates. We are interested in Saudi Arabia.”
He explained that the importance of diversification was not only in export markets but also in the types of goods and services traded.
However, experts cautioned that ongoing trade disruption could significantly impact the global energy transition, particularly in the green energy sector.
Al-Saleh said: “There are certain segments of people, businesses and technologies (in the green energy market) that are paying a price.
“But this is where, I think, from the private sector, it’s incumbent upon them to continue. This is irrespective of what happens today in terms of tariffs. There is a long view, and we need to all manage towards that long view.”
According to World Trade Organization data, every nation relies on imports and exports for at least 25 percent of its goods. Given this interdependence, Al-Saleh argued, trade will remain indispensable despite ongoing disruption.
She said: “You need to focus on being agile and resilient. Those are critical elements, and the way to become agile and resilient is really to diversify and invest in technology.”
Saudi Arabia taking bold steps to test smart technologies as it embraces AI, says industry minister
- Kingdom has embarked on a transformation of traditionally industrial cities into modern smart cities, Bandar Alkhorayef tells World Economic Forum
- Nation’s businesses are increasingly adopting new technologies to help enhance productivity, he adds
DAVOS: Saudi Arabia is becoming a regional hub for testing the use of new technologies as efforts to diversify the national economy continue, the minister of industry and mineral resources, Bandar Alkhorayef, told the World Economic Forum in Davos on Thursday.
The Kingdom has established national organizations such as the Saudi Data and AI Authority and the Future Factories Program to regulate and help businesses adopt new technologies that utilize artificial intelligence, machine learning, 3D printing and robotics, he added.
This smart infrastructure market is projected to be worth $2 trillion within the next 10 years, up from an estimated $900 billion in 2024, driven by growth in the integration of physical and digital industrial operations.
Alkhorayef said Saudi Arabia places a priority on manufacturing and has embraced the use of the latest technologies in sectors such as renewable energy and electric vehicles, as the Kingdom embarks on ambitious plans to transform traditionally industrial cities into modern smart cities.
“The investors coming to these cities (will find) a ‘plug-and-play’ kind of support,” he said, as authorities take steps to attract businesses and global talent to work and invest, and to establish the country as a regional hub for technological research, development and innovation.
The Kingdom’s Future Factories Program, for example, aims to provide training initiatives and loans to help 4,000 factories adopt new technologies, embrace automation and improve manufacturing efficiency.
“We’re very bold when it comes to testing new ideas and technologies,” Alkhorayef added, which makes it “interesting for new players to see (Saudi Arabia) as a place where they can not only seek financing or investment but also a place to test and pilot certain ideas.”
Such endeavors are endorsed by some of the country’s biggest corporations, including the chemical manufacturing company SABIC, the petroleum company Aramco, and the mining giant Maaden. Aramco, for example, has already adopted new technologies, including AI, to enhance productivity and reduce carbon dioxide emissions.
Alkhorayef was speaking during a WEF discussion titled “Next-Gen Industrial Infrastructure.” The other panelists included representatives of the African Union Commission, businesses and consulting firms.
Currently, up to 50 percent of Saudi Arabia’s deep-tech startups are focused on the development of AI or the Internet of Things, Alkhorayef said, as the country increasingly adopts digitalization in the public and private sectors.
The Saudi Data and AI Authority, established in 2019 to regulate and promote the national agenda for a data-driven economy, has said that AI is making significant contributions to operational efficiency. In 2023, global spending on AI exceeded $120 billion, with more than 72 percent of organizations incorporating the technology into at least one business area.
“We believe that adopting technology in the mining sector will lead to safer, more productive and energy-efficient mines,” Alkhorayef said by way of an example, adding that it is essential that authorities consider environmental protection as they seek to strike the right balance between the interests of investors and the local community.
“Making digitalization accessible is an important part of what we do (in the Kingdom),” he said. “It involves regulation, cybersecurity, human capital training, and investing in incubators to work and learn.
“In every sector, such as food, energy or mining, (we always ask) the question of how technology could be helpful.”
