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INSTANT VIEW - Saudi Arabia projects a budget deficit of $44 Billion in 2026
Saudi Arabia, which is the top oil exporter in the world, approved its budget 2026 on February 2. It forecasts a deficit next year of 165 billion Riyals, and deficits until 2028, as it prioritizes its spending to meet Vision 2030 goals. Here are some comments on the budget from Saudi officials, analysts and economists: SPA, the state news agency, quotes MOHAMED BIN SALMAN as CROWN PRINCE and Prime Minister: The 2026 budget confirms that the government is determined to improve the resilience and flexibility in the local economy. This will contribute to its sustainable development and enable it to overcome challenges and fluctuations in the global economy. The Kingdom will continue its focus on diversifying economic base, encouraging investment and accelerating pace of economic transformation, in line with Vision 2030. MONICA MALIK, CHIEF ECONOMIST OF ABU DHABI COMMERCIAL BANK "Government expenditures remain high, and are supportive of non-oil activities despite budgeted cuts in government spending. Capex spending is expected to drop again in the budget, after having dropped in 2025. The PIF is responsible for a large part of the investment activities, with the goal of attracting private investors. The budget continues to emphasize the importance of progressing with strategic key projects. JUSTIN ALEXANDER IS DIRECTOR OF KHALIJ ECONOMIC AND GULF ANALYST FOR GLOBALSOURCE PARTNERS. The headline revenue and expenditure for 2026 are the same as the PBS (Pre Budget Statement), but we now have some indications of how to cut spending by -1.7%. The -6 percent capex cut is surprising, given the focus on projects. It also includes a further drop in goods and services spending. NAIF AL-GHAITH, CHIEF ECONOMIST AT RIYAD BANK: The budget is both expansive and disciplined. It supports Vision 2030’s ambition of diversifying the economy. Increased public investment builds infrastructure, stimulates non-oil industry, and creates conditions for private-sector development. The budget reflects Vision 2030's shift in the economic base. We expect the economy to grow by 5% this year, and 4.5% next year. (Reporting by Rachna Uppal, Federico Maccioni, Nayera Abdallah, Timour Azhari, Utkarsh Shetti Editing by Frances Kerry)
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Google-backed TAE Technologies enters into a joint venture with UK's Nuclear Agency
TAE Technologies is a private company that has been backed by Alphabet, Google, and Chevron. On Tuesday, it announced a joint venture to develop neutral beams in nuclear fusion with the United Kingdom’s nuclear agency. The UK Atomic Energy Authority has agreed to invest 5.6 million Euros ($6.50 Million) as equity in a new venture, TAE Beam UK. Nuclear fusion, a new technology, aims to harness the same process that powers our sun in order to produce electricity. It promises a vision of unlimited energy, free from pollution, radioactive waste and greenhouse gases. Nuclear technology is a growing industry, and countries like the U.S., China, Italy and the UK are searching for companies that can provide nuclear technologies to industries such as healthcare and defense. TAE Technologies stated that the partnership would enable it to develop next-generation neutral-beam systems for fusion applications and other related applications more efficiently. The company said it would design, develop, and manufacture neutral beams to be used in fusion. It will also adapt its accelerator technology to cancer therapy, food security, and homeland safety. "Together we are building critical infrastructure for fusion supply chains and ensuring the U.S. - UK partnership can remain central to the future fusion economy," CEO Michl Binderbauer stated. The company stated that the project will deliver the first short pulse beams in 18 to 24 month. ($1 = 0.8618 euros) (Reporting by Dharna Bafna in Bengaluru; Editing by Shreya Biswas)
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Investors watch Fed rate cuts as gold falls due to profit booking
The gold price fell by over 1% Tuesday, as investors took profit after a six-week peak in the previous session. They also awaited important U.S. data before next week's Federal Reserve policy meeting. By 1109 am, spot gold had fallen 1.4% to $4173.91 an ounce. ET (1609 GMT). U.S. Gold Futures for February Delivery were down 1.6% to $4,205.10 an ounce. Peter Grant, senior metals analyst at Zaner Metals and vice president of the company, said: "It is probably just some profit-taking... The market has focused on rate cuts expectations in recent months and they remain fairly steady." "We are in an upward breakout pattern and I like gold at $5,000 early in the New Year." The recent data showing a slowing of the U.S. economic growth, combined with the dovish comments of Federal Reserve policymakers has led to increased market expectations of a 25 basis-point cut in the Fed's rate at its meeting next week. Traders have priced an 87% chance of this happening. Investors will also be watching the November ADP Employment report, which is due on Wednesday, and the September Personal Consumption Expenditures Index (PCE), due Friday. This index is preferred by the Fed as an inflation gauge. Gold that does not yield is usually a good investment. According to the World Gold Council, central banks purchased 53 tons of gold during October, a 36% increase month-over-month. This is the highest monthly net demand seen since 2025. Silver fell from its record high of 58.83 dollars per ounce, which was reached on Monday. It eased 0.4% to 57.42 dollars an ounce. The price has increased by over 100% in the past year. "There are no new factors for the recent increase in silver prices." The known reasons for the recent price jump (in silver) still hold true, including tight supply which is reflected by low inventories at the Shanghai exchanges," Commerzbank stated in a report. They also expect another, moderate price rise to $59 over the next year. Palladium rose 1.2% to 1,441.37. Platinum fell 2.5% to 1,616.37. (Reporting from Anmol Choubey, Bengaluru; additional reporting by Polina Devitt. Editing by Shalesh Kuber).
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Minister: UK does not have immediate plans to set a price floor for critical minerals
Chris McDonald, Minister of Industry in Britain, said that the UK has no intention to follow the United States and provide a floor price for domestic rare earth producers to reduce reliance on China as a dominant producer. He said that Britain has so far attracted enough investment to create a home-grown mineral supply. However, it would monitor the situation if other mechanisms were needed. Sources told the media in September that members of the Group of Seven (G7) and European Union were considering price floors in order to encourage rare earth production. They also considered taxes on certain Chinese exports in order to stimulate investment. Sources say that the U.S. offered a guaranteed price minimum to the rare earths company MP Materials as part of the Pentagon's multi-billion dollar investment in July. The mechanism is likely to be extended to additional firms. McDonald said that he met U.S. Pentagon officials on Monday in London who explained their support policies, including price floors, for critical minerals. "We are doing the majority of these things, but not all. A price floor is not currently on our list. "But maybe I'll watch how that goes," said he in an interview. "It's all about attracting this investment and we are doing that at the moment." Last month, Britain announced its Critical Minerals Strategy, which aims to meet 10% domestic demand by UK mining, and 20% by recycling, by 2035. The strategy is backed up by funding of up to 50 millions pounds. About 90% of the rare earths are refined in China. The UK, which produces only 6% of the critical minerals it needs, has a strategy that focuses on lithium, nickel tungsten, and rare earths. The UK expects to see the first lithium processing project in Northern England within the next couple of years. It aims to produce 50,000 metric tonnes of lithium by 2035. In addition, the country plans to stockpile critical minerals as part of its defence procurement program. (Reporting and editing by Louise Heavens, Eric Onstad)
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Investors are watching for Fed rate cuts and profit-booking as gold prices fall.
The gold price fell on Tuesday, as investors took profit after a six-week peak in the previous session. However, expectations of Federal Reserve rate reductions provided some support before this week's key U.S. Economic Data. By 9:58 am, spot gold had fallen 0.3% per ounce to $4219.96. After falling more than 1% in the previous session, spot gold fell 0.3% to $4,219.96 per ounce by 09:58 a.m. ET (1458 GMT). U.S. Gold Futures for February Delivery were down 0.5%, at $4.253.10 an ounce. Peter Grant, senior metals analyst at Zaner Metals and vice president of the company, said: "It is probably just some profit-taking... The market has focused on rate cuts expectations in recent months and they remain fairly steady." "We are in an upward breakout pattern and I like gold at $5,000 early in the New Year." The recent data showing a slowing of the U.S. economic growth, combined with the dovish comments of Federal Reserve policymakers has led to increased market expectations of a 25 basis-point cut in the Fed's rate at its meeting next week. Traders have priced an 87% chance of this happening. Investors will also be watching the November ADP Employment report, which is due on Wednesday, and the September Personal Consumption Expenditures Index (PCE), which is the preferred inflation indicator of the Fed, that's due Friday. Gold that does not yield is usually a good investment. According to the World Gold Council, central banks purchased 53 tons of gold during October, a 36% increase month-on-month. This is the highest monthly net demand seen since 2025. Silver fell from its record high of 58.83 dollars per ounce, which was reached on Monday. It eased 0.4% to 57.42 dollars an ounce. The price has increased by over 100% in the past year. "There are no new factors for the recent increase in silver prices." The known reasons for the recent price jump (in silver) still hold true, including tight supply which is reflected by low inventories at the Shanghai exchanges," Commerzbank stated in a report. They also expect another, moderate, increase in price to $59 over the next year. Palladium rose 0.7% to $1.434.29. Platinum fell 2% to 1,624.20. (Reporting from Anmol Choubey, Bengaluru; additional reporting by Polina Devitt. Editing by Shailesh Kumar)
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TASS: Russian government will use dividends from state-owned electricity companies to support industry
According to a report by the state news agency TASS on Tuesday, dividends from the state-owned Russian electricity companies will fund investments in the industry. The article quoted Yevgeny G. Grabchak, Deputy Minister of Energy as saying that the hydro-generation company Rushydro along with grid operator Rosseti will be included in this scheme. Dividends will be paid to a special institution for development and used to help power companies. This includes subsidizing bank interest rates. According to a draft of a law, the Energy Ministry proposed last month that electricity companies limit dividend payments in order to release funds to upgrade major infrastructure. This move would apply to all companies that are involved in the generation, transmission and distribution of electricity. The stock market fell in value as a result. Grabchak said later that the Energy Ministry didn't consider dividend restrictions to be necessary, and was in discussions with the government about how some of the dividends from state-owned energy firms could be invested. The Western sanctions on Russia have led to high interest rates and limited funding. Energy companies, officials, and regulators are looking at new ways to attract investments for energy construction through 2042. (Reporting Anastasia Lyrchikova, Writing by Maxim Rodionov, Editing by Mark Trevelyan).
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Russian grain harvest exceeds 145 million tonnes, according to deputy PM
Dmitry Patrushev said that Russia has been the largest exporter of wheat in the world this year. He oversees the Russian agricultural sector. Patrushev, who oversees the Russian agriculture sector, said that the volume of grain by clean weight may be lower than expected due to the bad weather which accompanied harvesting. Gross or bunker weight is the total of all impurities, foreign matter, such as dust, chaff and small stones, and excess moisture. This weight will increase if harvesting is done in bad weather. "The new crop harvesting is almost complete." Patrushev told a government gathering that despite weather disruptions during the entire season, major crops have produced more than last year. Patrushev stated that the forecast clean weight crop of 135 millions tons of grain was on track, including 90,000,000 tons of wheat. He added that rapeseed and soy crops will likely reach a new record in 2018. Patrushev stated that the sowing of winter grains for the harvest in 2026 was completed on the planned area of 20 million hectares. The agriculture ministry will approve the finalised structure for the sown areas next year by December. Oksana LUT, the Agriculture Minister, said at the same meeting that 97% of the seeded areas had been harvested. She also said that the weather conditions have been favorable for winter sowing. "The winter crop sowing is almost in line with the forecasts." Lut stated that the weather conditions were generally favorable, which allowed for expectations of good harvest. Despite the fact that drought affected some of Russia's major grain-producing areas in the south, a better-than-expected crop harvest was achieved in Siberia and central regions. Reporting by Gleb Stolarski, Writing by Gleb Bryanski and Alexander Smith; Editing and Revision by Andrea Ricci and Alexander Smith
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Sources say that OPEC+ will be subject to an annual audit of their oil capacity under the new plan.
OPEC+ said that members of the group will be assessed annually for their oil production capacities starting in 2020. This assessment is to be used by 2027. The goal is to align output quotas with each country's actual capacity. The agreement was reached on Sunday, which is a significant step forward in resolving a thorny problem for OPEC+ that has plagued the group for many years. It will also boost its credibility with investors and other oil market participants. Some members, such as the United Arab Emirates, have increased their production capacity and want to increase their targets. Others such as African members are experiencing declines. Others find it difficult, both politically and economically, to accept a production target or theoretical capacity that is lower. Angola left the Organization of Petroleum Exporting Countries (OPEC) in 2024 due to a disagreement over its production quotas. APPOINTMENT OF CONSULTANTS Saudi Energy Minister Prince Abdulaziz bin Salman stated on Monday that the meeting held on Sunday was the most successful day of his career. The output capacity mechanism will help stabilize the markets and reward those investors who invest in production. Assessments will begin in 2026 and be used to establish baselines for outputs in 2027, on which quotas will be set. Three OPEC+ sources and industry sources have confirmed that OPEC+ – which is a grouping of OPEC, Russia and its allies – plans to appoint U.S. Petroleum Consultant DeGolyer and MacNaughton for the purpose of estimating oil prices for 19 out 22 OPEC+ member countries. The company did not respond when contacted for comment. DeGolyer, a Dallas-based company, was among the companies who audited Saudi Aramco’s oil reserves in advance of its 2019 initial publicly offered. Sources said that DeGolyer refused to assess the capacities of Russia, Iran, or Venezuela. Sources said that these OPEC+ producers were under U.S. sanction and did not want a U.S. company to carry out the work. The sanctions may have also made it difficult for the U.S. firm to perform this work. Sources said that a firm from India will be appointed to assess the capacity of Russia and Venezuela in the next few weeks, while Iran has chosen to have its production figures used to estimate its capacity. One of the OPEC+ members declined to identify themselves because they weren't authorised to publicly speak about the issue. GROWING GAP IN QUOTAS VS ACTUAL OUTPUT OPEC+’s production increases in 2025, after several years of cutting output, have revealed a growing difference between the targets of many members and their actual output. Data from S&P Commodity Insights (Platts), which is a source of data for OPEC+, shows that in October, 12 out of 18 members who had quotas pumping were below their targets. Platts, one of OPEC+'s sources for monitoring its output, is used by the group. Russia is the country that has fallen most behind target, with a deficit of 101,000 barrels per day. Kazakhstan is the country with the highest production, at 144,000 barrels per day. OPEC+ has a limited spare production capacity – idle output that could come online quickly – after years of low investments, according to OPEC+ and industry executives. It takes time for producers and drillers to increase drilling and output. Since OPEC+ has not set production targets, it is hard to know what the maximum capacity is. The use of consultants to conduct the assessment is in line with OPEC’s long-standing practice, which involves using secondary sources like analysts and industry media such as Platts for assessing its members’ actual production. It is a result of historical disputes about how much oil OPEC member countries claimed to produce. The objective is to provide an impartial assessment. A source stated that after the 2026 audit of the baseline outputs for 2027, the countries would prepare the data for the assessment for 2028 during January and February 2027. The update process will begin in March 2027. Source: The same steps would be repeated in future years. (Reporting and editing by Simon Webb, Emelia Sithole Matarise, Emelia Sithole, Alex Lawler)
After the departure of its co-founder, Gunvor's new CEO insists that business will continue as usual.
Gary Pedersen stressed that business was as usual at Gunvor, the Swiss commodities trader, during an interview on Tuesday. A day earlier, Pedersen had taken over following a sudden management buyout from co-founder Torbjorn Tornqvist. The management buyout announcement on Monday was a surprise to many and marked the end for Tornqvist after 25 years of leading Gunvor. Pedersen became the first American leader of a major Swiss commodities firm since Marc Rich who was indicted over tax evasion charges and other offenses. Gunvor has been scrambling to repair its relationship with the U.S. since the Treasury labeled it as "the Kremlin’s puppet" and sabotaged its purchase of the international assets of the sanctioned Russian company Lukoil. Gunvor's business partners and creditors were worried by the statement.
Pedersen told me by phone that all of the core banks with whom we had been signed were with us. He also said that the counterparties worked with him normally.
The GUNVOR Headquarter is staying in Geneva
Pedersen who has been with Gunvor for about a year, after having overseen refined products trade at hedge fund Millennium Management from 2022 onwards, confirmed that the trading house's headquarters will remain in Geneva. He said there was no plan to rebrand Gunvor after Tornqvist’s mother.
Pedersen stated that his goal is to be as disruptive as possible. He will spend his time in the U.S.A. and Europe, and has spent more than half of his career abroad.
Gunvor has performed "pretty well" in the second part of the year, Pedersen stated, pointing out that the company is backed by a solid team of traders, despite some turnover early this year. Oil traders had a tough start to the year, as a sudden drop in commodity prices caught them off guard. Profits also fell from their previous record highs. Gunvor, in particular, struggled last year with some misplaced bets on crude oil and lost its most senior traders including its global head for crude. Reporting by Shariq Khan in New York, and Robert Harvey in London. Editing by Rod Nickel.
(source: Reuters)