LONDON: Oil prices were broadly steady on Wednesday as market participants were pulled in different directions by an unexpected build in US crude and fuel inventories, global economic uncertainty and China reopening its economy.
Moving in and out of the negative territory, Brent crude futures were up 53 cents, or 0.7%, at $80.63 a barrel by 0921 GMT US West Texas Intermediate (WTI) crude futures rose 41 cents, or 0.6%, to $75.53 a barrel.
Both contracts rose on Monday and Tuesday, rebounding from a sharp selloff in the first week of 2023.
US crude oil stockpiles jumped by 14.9m barrels in the week ended January 6, sources said, citing data from the American Petroleum Institute (API). At the same time, distillate stocks rose by about 1.1m barrels.
Analysts polled by Reuters had expected crude stocks to fall. Traders will be looking out for inventory data from the US Energy Information Administration typically due 1530 GMT.
The oil market has been pulled lower by worries that sharply higher interest rate hikes to tame inflation would trigger a recession and curtail fuel demand. US inflation data is due on Thursday.
If inflation comes in below expectations that would drive the dollar down, analysts said. A weaker dollar can boost oil demand as it makes the commodity cheaper for buyers holding other currencies.
Prices have not jumped but gained some support from hopes for fuel demand growth in China, the world’s second-largest oil consumer after the US after it eased its COVID-19 curbs and increased crude import quotas by 20%.
“It is dawning on market players that China’s return to normality won’t be enough to propel oil back above $100/bbl on a sustained basis,” said PVM analyst Stephen Brennock.
“What is required is an improvement in global growth. Yet the outlook for the world economy is constrained by high inflation and tightening credit conditions.”
Pakistani authorities have ‘delivered’ on economic front, says top IMF official
- IMF official says Pakistan ‘important’ country in the world.
- “Our country is destined to succeed,” says Masood Khan.
- Nathan Porter hails actions and policies of Pakistani govt.
WASHINGTON: Bahador Bijani, an Executive Director of the International Monetary Fund (IMF), has noted an overall improvement in the economic situation, saying, the “Pakistani authorities have delivered”.
He made these remarks at an event hosted by Pakistan’s ambassador to the US in honour of friends of Pakistan from International Financial Institutions including IMF, International Finance Corporation (IFC), World Bank (WB), and Multilateral Investment Guarantee Agency (MIGA), at Pakistan House in Washington.
“I think the future for Pakistan is very bright. Pakistan is not just any country. It’s one of the most important countries in the region and in the world. Pakistanis deserve much more,” the IMF executive director was quoted as saying in an official statement.
The meeting took place as Islamabad awaits the IMF board’s meeting to approve a staff-level agreement on the first review of a $3 billion bailout, which will unlock $700 million in funding for the country.
Addressing the event, Ambassador Masood Khan observed that the past year was difficult for Pakistan. “We have passed through a wrenching transition and we are moving toward a new phase of stability,” he added.
“Have faith in Pakistan. Our country is destined to succeed,” he said.
“Our confidence stems from the people of Pakistan. We have a growing middle class and our human capital is increasing at a very fast pace,” he added.
Addressing a gathering of over 40 guests from the IFIs, the ambassador said that we were grateful to IFIs for their steadfast support in navigating through a difficult economic period.
Nathan Porter, IMF Mission Chief to Pakistan, speaking on the occasion, expressed satisfaction over the recently concluded staff-level agreement. He said that the actions and policies of the current government reflected its commitment to steer the country towards stabilisation.
“With that base, hopefully, we can build on and be able to move forward to reforms to build a stronger, prosperous and inclusive Pakistan,” he said.
He also appreciated the cooperation and the policies pursued by the State Bank of Pakistan for ensuring fiscal stability in the country.
Athanasios Arvanitis, Deputy Director Middle East and Central Asia Department IMF, also spoke on the occasion and expressed the hope that the elections in Pakistan would usher into a new beginning of undertaking a reform process that the country needed to make progress and address some of its structural issues.
Thanking them for their strong support, Ambassador Khan observed that the digitisation of Pakistan’s economy was creating new opportunities in the country for its youth and professionals taking the lead role in steering the country towards a bright future.
Lauding the professional achievements of Pakistanis working in the IFIs, the ambassador observed that Pakistani professionals have proved their mettle and have made the entire nation proud of their accomplishments.
“We are a nation of talented people. If you can make it, Pakistan will also make it,” observed the ambassador.
Syed Ali Abbas, Advisor Mission Chief UK, European Department IMF, in his remarks, expressed the hope that with the successful completion of the electoral process in Pakistan, the country would move towards a long-term and more durable approach which would change the trajectory of Pakistan.
Aftab Qureshi from the World Bank and Sidra Rehman from the IMF also spoke on the occasion and assured their continued cooperation.
The ambassador thanked the members of the IFIs and said that the country looked forward to working with its development partners.
SNGPL demands 137% increase in gas tariff
- SNGPL’s prescribed gas prices amount to Rs1,715.49 per MMBTu.
- Company seeks revision of rate to Rs2,961.98/MMBTu.
- SNGPL calculates cost of RLNG’s service at Rs72.16bn.
ISLAMABAD: To address the looming revenue shortfall, the Sui Northern Gas Pipeline Limited (SNGPL) is yet again demanding a significant 137% increase in the average prescribed gas prices, amounting to Rs1,715.49 per MMBTu.
The state-owned company, responsible for supplying gas to Punjab and Khyber Pakhtunkhwa, has submitted a formal request to the Oil and Gas Regulatory Authority (Ogra) for the fiscal year 2023-24, seeking a revision of the rate to Rs2,961.98/MMBTu, effective from July 1 of the current financial year.
The company’s petition to Ogra outlines an estimated revenue requirement for FY24 at Rs179.16 billion, including Rs697 million allocated for LPG air-mix projects in Gilgit for the ongoing fiscal year.
On this basis, SNGPL is seeking a hike in the average prescribed gas price by Rs506.35/MMBTu, effective from July 1, 2023. It has notably incorporated the cost of re-gasified liquefied natural gas (RLNG) diverted to domestic consumers into the overall cost of gas, in alignment with a decision by the federal cabinet on October 10, 2023.
Additionally, the utility has factored in Rs427.83 billion to offset shortfalls from previous years. To justify a 137.6% increase in average prescribed prices to Rs2,961.98/MMBTu from July 1, 2023, SNGPL cites the rise in the cost of gas/RLNG and other components outlined in its petition.
Furthermore, SNGPL has calculated the cost of RLNG’s service at Rs72.16 billion (equivalent to Rs293.07/MMBTu) for the current fiscal year. The company indicates that the subject petition is undergoing revisions based on actual cost data and sales figures for July and August 2023, resulting in a reduction of the indigenous gas business shortfall from Rs181.516 billion to Rs179.160 billion.
The revised segment-wise shortfall and RLNG business cost for FY2023-24 are detailed as Rs179.160 billion for indigenous gas business and Rs427.830 billion for shortfalls from previous years. The total indigenous gas business shortfall, inclusive of previous years’ shortfalls, amounts to Rs606.990 billion, with an additional Rs72.160 billion designated as the RLNG cost of supply, as stated in the petition.
Ogra has invited comments from all interested and affected parties, including gas consumers and the general public. A public hearing on the petition is scheduled for December 11, 2023, in Lahore, where the regulatory authority will determine the gas prices.
PSX sets new record as KSE-100 crosses 63,000 mark
KARACHI: Bulls on Monday gripped the Pakistan Stock Exchange (PSX) as the benchmark index achieved a new milestone by crossing the 63,000 mark for the first time.
According to the PSX website, the benchmark KSE-100 index gained 447.13 points or 0.71% to reach 63,403.15 points during the intraday trading at 10:59am.
Pakistan-Kuwait Head of Research, Samiullah Tariq, told Geo.tv that major catalysts for the recent bull run in the equity market include strong profitability, attractive valuation, and expectations of a reduction in interest rate — scheduled to be announced on December 12.
He added that the “market should remain bullish in the coming days”.
A day earlier, stocks were boosted by expectations of improved economic conditions following signs of progress in securing financial support from the International Monetary Fund (IMF) and friendly countries.
Benchmark KSE-100 index rose 0.74% or 463 points to close at 62,956 points.
Investors were confident about the outlook for the economy, which has shown some improvement in key indicators such as trade deficit, remittances and exports. The local currency also remained stable and gained for the sixth consecutive session.
“There is a positive sentiment in the market, driven by optimistic expectations of an improved economic landscape,” said analyst Naveed Nadeem at Topline Securities.
“This positive outlook is supported by anticipated financial inflows from the IMF and friendly countries. Additionally, there is speculation about a potential reduction in interest rates in the upcoming monetary policy committee meeting, further enhancing the positive environment.”
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