SINGAPORE: Oil prices edged higher on Friday but were on track for a weekly decline amid fears of sharp interest rate hikes that would slam global growth and hit fuel demand.

Brent crude futures were up 24 cents, or 0.3 percent, to $91.08 a barrel as at 0315 GMT, but were down 1.9 percent for the week so far.

US West Texas Intermediate (WTI) crude futures gained 10 cents, or 0.1 percent, to $85.20 a barrel, but were also down 1.9 percent on a weekly basis.

“Today’s morning rebound for oil prices can only be described as a short-term correction, as the Fed will raise interest rates by 75bp or 100bp next week,” said Leon Li, an analyst at CMC Markets.

“Although the probability of a 100 bp rate hike is relatively small, it would bring uncertainty to market sentiment. So there is still a risk that oil prices could drop lower next week.”

Both benchmarks are headed for a third consecutive weekly loss, hurt partly by a strong US dollar, which makes oil more expensive for buyers using other currencies. The dollar index ticked down on Friday but held near last week’s high above 110.

Investors are bracing for a US rate hike next week after data showed underlying inflation broadening out, and amid growing concerns of a global recession.

The market was also rattled by the International Energy Agency’s outlook for almost zero growth in oil demand in the fourth quarter due to a weaker demand outlook for China.

“Oil fundamentals are still mostly bearish as China’s demand outlook remains a big question mark and as the inflation fighting Fed seems poised to weaken the US economy,” OANDA analyst Edward Moya said in a note.

Analysts said sentiment suffered from comments by the US Department of Energy that it was unlikely to seek to refill the Strategic Petroleum Reserve until after fiscal 2023.

On the supply side, the market has found some support on dwindling expectations of a return of Iranian crude, as Western officials played down prospects of reviving a nuclear accord with Tehran.

Commonwealth Bank analyst Vivek Dhar said that supported the bank’s view that oil markets will tighten by the end of the year and Brent will return to $100 a barrel in the fourth quarter.

Oil prices may also be supported in the fourth quarter as OPEC+ members are likely to discuss production cuts at its October meeting, and as Europe would face an energy crisis amid uncertainty on oil and gas supply from Russia, added CMC’s Li.

RIYADH: Saudi Arabia’s main index declined in the first session of the week, amid cautious investor sentiment ahead of domestic inflation data and the Federal Reserve’s interest rate announcement.

The Tadawul All Share Index shed 2.18 percent to end Sunday at 11,572, while the parallel market Nomu slipped 1.62 percent at 20,585.

Saudi oil giant Aramco ended the session with 0.68 percent decline, while Rabigh Refining and Petrochemical Co. fell 4.27 percent.

Almarai Co. dropped 0.75 percent, after announcing the full redemption of its SR1.6 billion ($426 million) sukuk on Sept. 16.

The Kingdom’s largest valued bank Al Rajhi slipped 2.17 percent, while Alinma Bank edged down 1.36 percent.

The Saudi National Bank, which is the Kingdom’s largest lender, decreased 2.45 percent.

Saudi British Bank declined 1.99 percent, after completing a SR1.2 billion deal to trade certain lines of business between HSBC Saudi Arabia and Alawwal Invest Co.

ACWA Power Co. lost 7.3 percent to lead the fallers, while Walaa Cooperative Insurance Co. gained 9.78 percent to lead the gainers after its shareholders approved its merger with rival insurer SABB Takaful.

RIYADH: German vehicle manufacturer Volkswagen is set to receive multi-million euros in profits as it sells large amounts of fuel, Bloomberg reported. 

According to Bloomberg calculations, VW could receive around €400 million ($399 million) in profit. 

The firm has sold 2.6 terawatt-hours worth of gas contracts, according to a document seen by Bloomberg News. The amount is enough to run around 200,000 normal, gas-heated homes for a year.

As the unprecedented energy crisis in Europe mounts, gas prices trade much higher than their levels when the automaker purchased the supply. 

As part of its drift away from coal, the company plans to use the gas next year at its two power plants in Wolfsburg. However, as prices increase, VW decided to sell it and stick to coal for now, Bloomberg reported citing people familiar with the matter. 

A spokesperson for VW declined to comment on internal business transactions.

RIYADH: The Saudi Grains Organization has paid SR21.8 million ($5.8 million) to 27 local wheat farmers who supplied quantities allocated for this season.

Purchasing an amount of 12,448 tons, the payment constitutes the fourteenth batch, according to SAGO’s statement.

It noted that the total amount spent so far this season has reached SR805.6 million.

RIYADH: Egypt’s Suez Canal Authority has increased transit fees for all types of ships by 15 percent starting January 2023 in order to deal with the impact of global inflation, the chairman said in a statement.

Osama Rabie added that transit fees for both dry bulk vessels and cruise ships will increase by 10 percent. 

The increase in fees is attributed to the rise in energy prices, freight rates and in the daily time rental values, according to the Cabinet statement. 

Rabie reasoned that the rise in fees for passing the canal “is inevitable and a necessity,” in order to deal with the impact of the current global inflation rates that have exceeded eight percent.

It comes in light of “unprecedented” daily increases in  charter rates for most types of vessels.

Daily charter rates for crude oil tankers increased on average in 2022 by 88 percent compared to 2021, while daily charter rates for LNG carriers rose on average by 11 percent during this year, compared to the year earlier. 

Rabie explained that the most important factor in determining Suez Canal transit fees is the average freight rates for various types of ships.

In recent months, freight rates, especially for containerships, have increased considerably, he explained, adding that it reached higher levels compared to the period before the COVID-19 pandemic.

He added that the current increased energy prices also impacted the authority’s fees calculations.

The continued rise in crude oil prices above the level of $90 per barrel, and the rise in the average prices of LNG above the level of $30 per million thermal units have led to a surge in the average prices of ship bunkers.

Consequently, the rise in energy prices increases the savings that ships achieve by transiting through the Suez Canal, compared to other alternative routes, he explained. 

This happens as the world’s largest wheat importer is intensifying its efforts to confront the challenges posed by the coronavirus pandemic, as well as the Russia-Ukraine crisis. 

Egypt has been hit hard by soaring oil and commodity prices, with the Egyptian pound further devaluing against the dollar and soaring inflation.

RIYADH: Saudi Aramco has signed an agreement valued at $250 million with Beyond Limits, a California-based artificial intelligence technology company, to build a global AI corridor, the oil behemoth announced at an industry event in Riyadh last week.

The global AI corridor would create an ecosystem in the Kingdom by commercializing complex AI solutions, training Saudi talent and supporting Saudi startups.

Amjad Abdullat, CEO of Beyond Limits, told Arab News during the event that the agreement will help build the project with relationships between the Kingdom and the US.

“In California, we have the greatest number of Nobel Prize laureates, a lot of intellectual property in AI and the largest number of venture capitalists investing in the AI ecosystem. So, we want to bring all that to the Kingdom to help build a strong network of AI entrepreneurs and unicorns,” Abdullat told Arab News.

Abdullat explained that the project would have an academy that will focus on training Saudi youth, a residency that will help AI startups in the Kingdom to work with seasoned professionals and an R&D Program that will support the creation of IPs.

“There is also an investment component that will attract foreign venture capital investments to the Kingdom, in addition to the domestic investment,” he added.

Established in 2014, Beyond Limits specializes in industrial AI technology software and was recognized as Global Company of the Year by Frost & Sullivan and one of America’s Best Startup Employers by Forbes in 2021.

In March, the company acquired Altec Products, Inc., a leading integrated document management and workflow solutions provider.Amjad Abdullat, CEO of Beyond Limits, told Arab News during the event that the agreement will help build the project with relationships between the Kingdom and the US.