Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
Crude Production Cut Agreement May Be Extended – US Refineries Back Online.
Saudi Arabia’s Energy Minister, Khalid al Falih, was quoted as saying yesterday that both he and his UAE counterpart, Suhail al Mazroui, believe that a potential extension of the OPEC/NOPEC production cut agreement should be considered if the appropriate market rebalancing had not yet fully taken place by the time the agreement expires in March next year. Al Mazroui also said that the state-owned Abu Dhabi National Oil Company had lowered its crude allocations by 10% for September and October this year. “The company will be notifying its customers and the market, on a monthly basis, of the actual changes to its lifting schedule in an effort to demonstrate transparency and enhance credibility around UAE’s conformity with its targeted production,” the minister was quoted as saying by Reuters. Meanwhile a number of key refineries on the US gulf coast have reportedly restarted operations including the country’s largest in Port Arthur Texas, following the precautionary shutdown triggered by Hurricane Harvey.
Saudi Arabia Foils Major Terror Plot & Uncovers Spy Ring.
Saudi Arabia has announced that its security forces have foiled a plot by ‘Daesh’ inspired militants who were reportedly planning to carry out a suicide-attack on two defence ministry facilities in Riyadh. According to the Saudi Gazette four men (two Saudis and two Yemenis) were arrested following a raid on a home in the Al Rimal district of the capital where weapons and explosives were also found. Meanwhile in a separate incident the Saudi Press Agency has confirmed the arrest of an unknown number of people reportedly linked to a cell made up of "Saudis and foreigners" who wanted to "stir up sedition and prejudice national unity." Adding that they had been working for "the benefit of foreign parties against the security of the Kingdom and its interests."
US Considers More Aggressive Strategy On Iran.
A Reuters article published earlier this morning, claims that the Trump administration is considering implementing a more aggressive strategy in in order to counter “malign” Iranian activities in the Middle East region, following the presentation of such a proposal to Trump last Friday by both the US Secretary of State and the President’s National Security Advisor. The plan is reportedly intended to increase the pressure on Tehran to curb its ballistic missile programs and support for certain militant groups, "I would call it a broad strategy for the range of Iranian malign activities: financial materials, support for terror, destabilization in the region, especially Syria and Iraq and Yemen," said an unnamed administration official quoted within the article.
Aramco Eyes Egyptian Pipeline For Oil Exports.
The CEO of Saudi Aramco’s trading arm, Ibrahim Al Buainain, was reported as suggesting recently that the energy giant was looking at the viability of using Egypt’s SUMED pipeline to transport more of the Kingdom’s oil exports to its European customers. He also indicated the possibility of using any spare capacity available at Egyptian refineries to process Saudi crude. The 200-mile pipeline has the ability to carry up to 2.34 mio bpd and, according to the Hellenic Shipping news website, is the only alternate transport route from the Red Sea to the Mediterranean aside from tankers using the Suez canal.
Egyptian T-Bill Yields Fall Again – C/A Deficit Narrows.
The yields achieved at this past Sunday’s Egyptian T-Bill auction fell by around 60bp as demand for the paper continues to remain strong. The 5 year yield dropped to 16.15% against a previous 16.74% while the 10 year rate slipped a similar percentage from 16.75% to 16.15%. Meanwhile the country’s 2016/2017 current account deficit narrowed in the 4th quarter of the fiscal year to US$2.4 bio against US$4.8 bio the previous year and portfolio investment jumped from US$ 214 mio to US$8.18 bio, according to data released this week by Egypt’s Central Bank and published by Reuters yesterday. Inflation too, which has touched record high levels in recent months finally appears to be edging lower, highlighted by the drop in CPI to 31.90% last month compared to 33% in July.
Kingdom Holdings Buys Stake In Banque Saudi Fransi.
Kingdom Holdings has reportedly agreed to purchase a 16.20% stake in Banque Saudi Fransi from France’s CA-CIB for SAR 5.76 bio.
Kuwait’s Stock Exchange Plans First PPP IPO.
50% of the shares in Shamal AzZour Al Oula, Kuwait’s only independent power and water plant will be offered to the public during the first quarter of next year. This will be Kuwait’s first public-private partnership IPO since the law governing such a framework was passed.According to state media outlet, KUNA, the law was introduced to help Kuwait’s citizens benefit from major projects and give the private sector an opportunity to play a larger role in expanding the non-oil sector of the economy.
Tunisia To Allow Foreign Currency Accounts.
Tunisia’s Prime Minister, Youssef Chahed, said yesterday that his government is set to introduce an amnesty for those involved in illegal currency dealing and allow Tunisian residents to hold foreign currency accounts onshore.
Mozambican Trains To Be Bullet-Proofed.
According to an article published on the ‘DefenseWeb’ site, the Mozambican subsidiary of Barzil’s Vale, has signed a contract with the South African based SVI Engineering firm to build and bullet-proof 100 locomotives which will be used for hauling coal across Mozambique. Such trains have allegedly become a frequent target of armed attacks by criminal gangs, particularly on the Sena line linking Moatize to the port of Beira, and as such Vale had been forced to temporarily suspend rail transport.
A recently launched US$300 million real estate development in Dubai is reportedly offering a scheme which will allow buyers to purchase their respective units using Bitcoins.
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