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PMI: UAE non-oil industry grows steadily as regional tensions impact demand
A survey on Thursday showed that the UAE's private non-oil sector grew steadily during June, even though regional tensions affected demand and firms increased output to clear backlogs. The S&P Global UAE Purchasing managers' Index (PMI), which is a seasonally-adjusted index, increased to 53.5 from 53.3 in June, indicating continued growth for the sector. However, new orders grew at their slowest rate in almost four years. The subindex of new orders dropped to 54.5 from 56.2 in may, the lowest reading since Sept. 2021. The tensions between Israel, Iran and other countries dampened demand. David Owen, senior economic analyst at S&P Global Market Intelligence, said that the impact of the conflict in Israel and Iran is mostly felt on demand, with some slowed down orders. Owen stated that the impact of this on business conditions overall was minimal. As firms reduced backlogs, output growth increased. The supply chain continues to face challenges, as delivery times improve at their slowest pace for 14 months and input costs rise at the slowest growth rate in two years. The survey found that non-oil companies in the UAE remained subdued about their business outlook despite the fact that the level of confidence has risen to its highest levels since November. Dubai's headline PMI fell to its lowest level for nearly four years, to 51.8 in June from 52.9 in the previous month. This was due to a sharp decline in sales growth amid competition pressures and weaker tourist numbers. Business activity increased sharply and the number of employees increased for a third consecutive month. (Reporting and Editing by Hugh Lawson).
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PMI data shows that Saudi Arabia's growth in the non-oil sectors accelerated in June due to strong demand.
A survey released on Thursday showed that the expansion of Saudi Arabia's private non-oil sector activity increased in May due to a strong client demand as well as a spike in hiring. The Riyad Bank Saudi Arabia Purchasing Managers' Index, which is adjusted for season, rose from 55.8 in May to 57.2 this month. This puts it above the 50 point line that indicates growth. The subindex rose to 64.3 from 62.5 in may, indicating a rapid acceleration in new order growth. This upturn was primarily driven by domestic sales, which were supported by client acquisitions that went well and improved marketing strategies. Export sales were marginally up. "Firms have largely attributed the improvement in activity to improved sales, new projects starting, and better conditions for demand, even though the pace of growth was slower than previous highs," Naif Al Ghaith said, chief economist at Riyad Bank. Private non-oil companies have hired more staff than ever since May 2011 as they expand their teams to handle increased workloads. The input prices rose as well, in line with the trend of the second quarter, which led firms to pass higher costs on to their customers. The output prices rose strongly, marking the biggest increase in over a year and a half, after months of declines. The survey revealed that despite cost pressures, Saudi firms in the non-oil sector remained confident about the future. In fact, the Future Output Index reached a record high of two years. The resilient economic conditions in Saudi Arabia and robust demand boosted confidence. The International Monetary Fund increased its forecast of Saudi Arabia's GDP growth in 2025 to 3.5%, from 3%. This was partly due to the demand for government-led initiatives and the OPEC+ plan to gradually end oil production cuts. Hugh Lawson, Editor (Reporting)
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RightBridge Ventures Agrees Reverse Takeover of Swemar
RightBridge Ventures Group has announced a proposed reverse acquisition of Swemar, which has entered into an agreement to acquire an offshore oil service company with operations across the Middle East, India, and South-East Asia.The company to be acquired by Swemar operates a fleet comprising Anchor Handler Tug Supply (AHTS) vessels and crew transportation vessels. It owns three vessels outright and operates an additional five to ten vessels under charter or management agreements.The acquisition marks a strategic first step toward establishing a strong maritime presence in Asia. It will provide RightBridge with a robust technical and operational platform, with the potential for further expansion into other segments of the maritime industry.The acquisition is immediately accretive, with an estimated EBITDA contribution of $11 million over the next 12 months, based on fixed employment contracts with blue-chip clients such as Saipem, NMDC Group, Larsen & Toubro, Aramco, and others.The transaction is firm from the seller’s side and conditional only on the buyer, subject to standard due diligence processes, which are currently underway.It is planned to be finalized in the third quarter of 2025 and is expected to have a positive impact on RBV’s EBITDA result for the 2025 financial year. The acquisition price will be announced in connection with the closing of the transaction.The acquisition will not change the price or the terms for the transaction with Right Bridge Ventures Group, the company noted.“This acquisition is the first step towards creating a strong maritime presence in Asia. It will provide us with a solid maritime technical and operational platform, with scope for expansion into other sectors of the maritime market.“The acquisition is convincingly accretive for RightBridge. Together with our ownership in U.S.-based shipbuilding and defense related industries we strive to become a full-service defense and maritime company with global operations,” said Dagfinn Lunde, newly appointed Chairman of RightBridge Ventures.
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OEG to Assist with Inch Cape Offshore Wind Farm Buildout
Energy solutions business OEG has signed a significant multi-million-dollar contract to support the construction phase of the Inch Cape offshore wind farm in Scotland, being developed by ESB and Red Rock Renewables.Over 100 OEG personnel will support the delivery of this contract, which includes the recent addition of six new appointments.The 1.1 GW project is located in the North Sea, 15 km from the Angus coast on a site covering 150 km2. It is set to become operational in 2027.Once completed, it will feature up to 72 wind turbines and an offshore substation and generate enough clean energy to power the equivalent of more than half the homes in Scotland.Scottish Inch Cape Offshore Wind Farm Reaches Financial CloseUnder the terms of the contract, OEG will supply an integrated package of specialist topside and marine services including marine coordination, high voltage and ancillary port services.These will all be managed under a central project team and delivered from the company’s new flagship facility in Edinburgh.OEG will also operate up to ten vessels, seven guard vessels for on location round-the-clock safety and three crew transfer vessels to support offshore wind technicians working at the wind farm.Furthermore, the firm will provide a comprehensive allocation of metocean sensors and navigation buoys, as well as any additional support equipment as required.“As we enter the project’s critical offshore construction phase it is vital to have trusted and experienced suppliers, so we welcome OEG’s integrated support during this next stage of the project,” said John Hill, Inch Cape’s Project Director.
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Prices of copper remain near their multi-month highs due to supply constraints and US tariff fears
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) both held copper near its highest level since late March. This was due to concerns about a tight supply in the region and an increase in shipments to the U.S., as traders rush to avoid potential import tariffs. As of 0103 GMT the LME's three-month copper contract was unchanged at $10,05 per metric tonne, but it hovered close to its highest level since March 26. The SHFE's most traded copper contract gained 0.27%, to 80,840 Yuan ($11285.77). This is its highest level since March 27. The United States may decide to deal with the copper tariff later. This has given traders more time to transport copper to the United States, when prices are higher. U.S. Comex Copper Futures climbed 2% on Wednesday to $5.199 per pound, with a premium of 14% over the LME copper contracts. The total copper stock in LME registered warehouses is still near its lowest level since August 2023 despite a small rebound over the past two days. Stocks have fallen 76% since the middle of February, due to cargoes being rushed into the United States after its investigation on copper imports. SHFE lead rose 0.7%, to 17,290 Yuan per ton. Zinc was up 0.7%, at 22,370 Yuan. Nickel climbed 0.6%, to 121550 Yuan. Aluminium edged higher by 0.2%, to 20,710 Yan. LME lead rose 0.2% to $2.064.5 per ton. Nickel climbed 0.15% to $15.325, tin grew 0.15% to $33,765, aluminium slid 0.1% to $2.622.5 and zinc fell 0.11% at $2.754.5. Click or to see the latest news in metals, and other related stories. DATA/EVENTS - (GMT 0750 France HCOB Services Composite PMI 060755 Germany HCOB Services Composite Final pmi 060800 EU HCOB Services Composite Final pmi 0830 UK Reserve Assets June 0830 US Non Farm Payrolls Unemployment Rate Average Earnings YY Jun 1230 US International trade $ May 1400 US Factory orders MM May1400 US ISM N Manufacturing PMI june
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Investors wait for US payroll data to get Fed policy clues
Investors held off on making large bets as they awaited the U.S. Payroll data that would be released later in the day to get a better idea of the Federal Reserve’s policy direction. As of 0211 GMT spot gold fell 0.3% per ounce to $3346.47, while U.S. Gold Futures edged up 0.1% to $3357.20. OANDA Senior Market Analyst Kelvin Wong stated that gold appears to be consolidating in the $3,320-$3,360 range. The market is waiting to see what happens with U.S. Non Farm Payroll data and ISM Services' PMI before taking any significant positions. ADP released data showing that private payrolls in the United States fell by 33,000 positions in June. This was the first drop in over two years as economic uncertainty hindered hiring. Low layoffs continue to stabilize the labour market. Investors await the non-farm payrolls data on Thursday. According to a survey, it is expected that 110,000 new jobs were added in June, compared to 139,000 in May. On Wednesday, Donald Trump, president of the United States, announced that the U.S. would impose a 20% tariff, which is lower than what was promised, on a variety of goods coming from Vietnam. The Southeast Asian country is the U.S. tenth largest trading partner. Wong stated that "the Vietnam trade deal is likely to have already been priced in the market. I think now the primary concern is the status other deals with major countries which are still in limbo," The U.S.-India negotiators worked to reach a deal that would reduce tariffs before Trump's deadline of July 9. Trump did not indicate that he would extend the deadline for negotiations despite stalled talks with Japan, another important trade partner. However, he expressed optimism regarding an India agreement. Gold that does not yield tends to do well in an environment of economic uncertainty or low interest rates. Silver spot fell by 0.6%, to $36.37 an ounce. Platinum lost 1.5%, to $1397.91, and palladium dropped 1.4%, to $1138.73. (Reporting and editing by Sumana Aich and Rashmi Nandy, Bengaluru)
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China's North and West on Alert after Deadly Floods Caused by Sweeping Rains
China's west and north were braced on Thursday for flash floods, as the annual "Plum Rains" left a path of destruction. This prompted thousands of rescue workers from across China to help pull people out of floodwaters. The red alerts traced the rains from the southwest province of Sichuan, through the northwestern provinces of Gansu and Liaoning to the northeast province. The state media reported that over 1,000 rescue workers had been dispatched on Wednesday to the town Taiping, in central China's Henan Province, after torrential rainfall caused a river nearby to burst it banks. Five people were killed in a flash flooding and three others are still missing. On Thursday morning, trains to the capital Beijing were suspended. Flight delays and cancellations occurred at one of the airports in the city late Wednesday night and early Thursday morning. Meteorologists have linked climate change to extreme rainfall and severe floods. These events pose a major challenge to policymakers, as they threaten to overwhelm the ageing flood defences and displace millions. They also threaten to wreck havoc on China’s $2.8 trillion agriculture sector. Natural disasters caused economic losses of over $10 billion in July last year, during which the "Plum Rains" - so named because they coincide with plums maturing along China's Yangtze River at the time of the East Asia Monsoon – usually reach their peak. Local media reported that in China's southwest province of Guangxi several buildings have slid over the past two days as their foundations gave out due to waterlogged soil. The national meteorological center forecasts scorching heat along eastern coast of the country.
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Oil drops on signs of weak US Demand ahead of Key Jobs Report
On Thursday, oil prices fell, reversing the gains of the previous session. This was due to concerns about weak U.S. Demand after data from the government showed an unexpected build-up in inventories. Brent crude futures dropped 24 cents or 0.35% to $68.87 per barrel at 0044 GMT, after rising 3% on Tuesday. U.S. West Texas Intermediate Crude fell 24 cents or 0.36% to $67.21 per barrel, after previously rising 3.1%. Energy Information Administration reported on Wednesday that domestic crude stocks rose by 3.8 millions barrels, to 419,000,000 barrels. In a poll, analysts had predicted a drop of 1.8 millions barrels. The gasoline demand fell to 8,6 million barrels a day, causing concern about the consumption during peak summer driving in the United States. The benchmarks rose on Wednesday, after Iran passed a law that suspended cooperation with the U.N. Nuclear Watchdog. This sparked fears the long-running dispute over Middle East producer Iran's nuclear program could once again escalate into an armed conflict. The U.S. reached a deal with Vietnam that imposes 20% tariffs on most of the Southeast Asian nation's exports. This gives investors a feeling of economic stability in international trade, which could lead to a higher demand for crude oil. Analysts said that the market will closely monitor the release of Thursday's key U.S. employment report to determine the timing and depth of Federal Reserve interest rate reductions in the second half this year. Lower interest rates may spur economic activity and, in turn, increase oil demand. Analysts cautioned that there was no correlation between the private payrolls report and government data. (Reporting and editing by Christian Schmollinger; Nicole Jao)
As CEO promises accountability, Chevron employees are laid off in a long-awaited process.
A video was shown to Chevron's employees at a town hall meeting held last week. The video highlighted the success of the oil giant in Colorado, where it is the largest producer of oil and natural gas in the state.
In less than 30 minutes, the executives announced their plans to reduce up to 20% of global staff.
Chevron, despite progress made in safety and financial performance has fallen behind its competition, the company's leaders informed employees at a meeting held on February 12th. On the webcast, they stated that Chevron's business was becoming too complex, costs were creeping up, and it had difficulty making quick decisions.
Review of presentation slides as well as a recording from the Town Hall that was broadcast to all staff members worldwide.
Chevron plans to reduce its workforce by up to a fifth - or 8,000 employees - after oil prices have been in the 70-80-per-barrel range for the majority of the last year. The oil prices and the refining margins are lower than last year but enough to generate a profit of $18,3 billion for Chevron in 2024, down from $24.7billion in 2023.
The layoffs are the culmination of a difficult 18 months for Exxon Mobil, the U.S.'s second largest oil producer. Exxon Mobil, along with CNOOC and Hess partners in Guyana challenged the deal at court.
Arbitration is still pending on the deal.
Four Chevron employees said the layoffs had been widely anticipated internally. Some employees even admitted that the move was needed to compete with Exxon, and other rivals.
"I think this will be a positive thing," said an employee of Chevron, who asked to remain anonymous because they weren't authorized to speak in public.
It's hard to go through, but we were the last major company (to make cuts). "Everyone was wondering when Chevron will do it."
Chevron announced in November that it would aim to reduce costs up to $3 billion by 2026. This will include changing the way and where work is done.
Chevron's spokesperson stated that changes in the company structure would improve efficiency and results.
The spokesperson stated that "while these changes are needed, the decision to decrease our workforce is not easy."
Shell, a UK-based oil company, planned to reduce its oil and natural gas exploration and production workforce by 20% in an effort to cut costs. This was reported in August. Last month, rival UK oil major BP announced that it would cut 3,000 contract positions and 4,700 employee jobs.
Three Chevron workers said that they have experienced several rounds of layoffs in their careers due to the nature of the oil-and-gas industry. One of the employees said that layoffs during COVID-19 were even worse.
The employee stated, "They always said it would be the last time."
Due to China's rapid rise in electric vehicle sales, the world's biggest crude importer. This country has been driving the global oil demand for more than a decade.
Nick Hummel is an analyst at Edward Jones and said that uncertainty about the global economy, China's demand, and oil prices could limit future oil prices.
Mass layoffs are common in the oil sector after oil prices plummet. One Chevron employee was dismayed at the timing of layoffs in a time of relative price stability.
The person who refused to reveal his name but identified himself as a Chevron employee said, "It's a biting feeling." "Oil prices appear stable, but then they drop the hammer."
ACCOUNTABILITY
Kim McHugh read out questions from employees during the town hall. Employees asked if Chevron executives will be held responsible for their company's poor performance.
People feel that they are held accountable. "How is leadership held accountable?" McHugh stated.
Mike Wirth, CEO of the company, said that he was looking for transparency and action from his leadership team.
When things don't go well, do I get a nice excuse and a bunch of reasons, or do I get a plan?" He said.
Wirth, in response to a second question, said that Chevron, as part of its efforts to simplify the business, will also clarify who has decision-making authority and hold them accountable.
McHugh said that after several previous reorganizations staffers want to be reassured that the latest restructuring is successful.
She told the CEO, "I believe the employees would like me to say that you've committed to give us simplicity."
We don't want to have to do this again. Reporting by Sheila Dang in Houston, Ernest Scheyder in New York, Arathy Sommesekhar, Marianna Pararaga, and Nia William.
(source: Reuters)