{"id":96666,"date":"2025-05-05T00:00:00","date_gmt":"2025-05-05T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/05\/05\/opec-to-barrel-ahead-with-more-hikes\/"},"modified":"2025-05-05T00:00:00","modified_gmt":"2025-05-05T00:00:00","slug":"opec-to-barrel-ahead-with-more-hikes","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/05\/05\/opec-to-barrel-ahead-with-more-hikes\/","title":{"rendered":"Opec+ to barrel ahead with more hikes?"},"content":{"rendered":"

Good morning, ladies and gents<\/strong>. Today\u2019s issue has a mixed bag of news, with net foreign direct investment inflows declining in the fourth quarter of 2024. The IPO market also remains active, as Specialized Medical Company announced plans to float a 30% stake on Tadawul. Meanwhile, Sabic reported a net loss for the first quarter.<\/p>\n

HAPPENING TODAY-<\/p>\n

\u26a0\ufe0f <\/strong>WEATHER-<\/strong> It was a bit rough day out there in parts of the Northern Borders and Eastern Provinces this morning. Ongoing dust storms expected to last until about 9am, in areas including Khobar, Dammam, Qatif, Ras Tanura, Al-Ahsa, Buqayq, Jubail, Khafji, Nairyah, and Qaryat Al-Ulya. Some flights arriving overnight were diverted to Bahrain, likely because of the sandstorm.<\/p>\n

Expect some gusty winds and really low visibility<\/strong> \u2013 maybe less than a kilometer \u2013 so stay safe if you're out and about. Fortunately, schools are enjoying a long weekend that is due to end today.<\/p>\n

Riyadh is expected to se<\/strong>e a high <\/strong>of 40\u00b0C<\/strong> and a low of 28\u00b0C today<\/strong>, while Jeddah\u2019s mercury will go as high as 32\u00b0C and as low as 26\u00b0C. Meanwhile, Makkah will see a 36\u00b0C high and 24\u00b0C low.<\/p>\n

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Dkhoun<\/a><\/strong>National Trading<\/a><\/strong> opened subscription yesterday for 400k shares on<\/strong> Nomu at <\/strong>SAR 121 each<\/strong>, representing 20% of its SAR 20 mn capital. The offering, limited to qualified investors, runs through Thursday, 8 May.<\/p>\n

REFRESHER- <\/strong>Qualified investors would be able to subscribe<\/a> to a minimum of 10 shares and a maximum of 100k shares, with the final allocation of the shares expected by no later than 12 May.<\/p>\n

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PSAs- <\/p>\n

The subscrip<\/strong>tion window for the <\/strong>May round of <\/strong>the government-issued retail sukuk <\/strong>program<\/strong> Sah closes tomorrow at 3pm<\/strong>, the National Debt Management Center said in a post on X<\/a>. The instrument carries a 4.66% yield, with a minimum subscription of SAR 1k and a maximum of SAR 200k.<\/p>\n

WATCH THIS SPACE-<\/p>\n

<\/a> <\/strong>Expert warns <\/strong>Neom\u2019s design could disrupt local clim<\/strong>ate patterns: <\/strong>The Neom gigaproject\u2019s ambitious plans \u2014 including The Line, ski fields, and islands \u2014 could disrupt local weather patterns, amplifying wind, storms, and altering rainfall, Donald Wuebbles, a climate scientist advising Neom, told the Financial Times<\/a>.<\/p>\n

That\u2019s not all: <\/strong>Cement emissions and slow progress on phasing out combustion vehicles \u2014 on which Neom has commissioned academic studies \u2014 were also flagged as concerns by Wuebbles.<\/p>\n

Leeway for treading new ground:<\/strong> Despite challenges, Wuebbles praised Neom\u2019s technological ambitions, calling it a \u201cmoonshot\u201d and highlighting its potential to offer valuable lessons and serve as a model for future sustainable cities.<\/p>\n

IN CONTEXT- <\/strong>Neom is undergoing a comprehensive review<\/a> under acting CEO Aiman Al Mudaifer, who was appointed in November<\/a>, with sources indicating he is likely to take on the role permanently following the departure of longtime chief Nadhmi Al Nasr. This comes amid growing pressure to deliver results as Neom faces delays or downsizing amid lower oil prices and declining foreign investment. Wuebbles claimed the project has already been pushed back by six to 12 months.<\/p>\n

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<\/a> <\/strong>Service Equipm<\/strong>ent Company\u2019s (SEC) share price <\/strong>lost 10%<\/a><\/strong> to settle at SAR 75.60 on its <\/strong>Nomu<\/strong> debut<\/strong>, down from its final IPO price of SAR 84 apiece, according to market data<\/a>. The auto equipment distributor took a 30% stake<\/a> to the parallel market, raising SAR 60.48 mn in a secondary share sale.<\/p>\n

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DATA POINTS-<\/p>\n

Saudi shoppers doubled down on gold jewelry purchases in 1Q 2025, up 35% y-o-y to <\/strong>11.5 tons<\/strong>, despite the precious metal hitting a record-high<\/a> of USD 3.5k per ounce during the period, according to a report (pdf)<\/a> by the World Gold Council. On the investment side, demand for gold bars and coins in the Kingdom rose 15% y-o-y during the quarter to 4.4 tons.<\/p>\n

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OIL WATCH-<\/p>\n

<\/a> <\/strong>Opec+ to<\/strong> barrel ahead with hik<\/strong>es (unless laggards fall in line):<\/strong> Opec+ is expected to approve a further 411k barrels a day (bbl \/ d) increase for July at its June meeting, Reuters<\/a> reports, citing unnamed sources. Accelerated hikes are likely through October, with a plan to unwind 2.2 mn bbl \/ d of voluntary cuts by November unless quota violators like Iraq and Kazakhstan improve compliance.<\/p>\n

ICYMI- <\/strong>The oil group agreed on a 411k bbl \/ d increase for June<\/a> on Saturday, following a similar hike in April<\/a>. The decision marks a sharp shift from the Kingdom\u2019s usual price-support strategy, as it reportedly signaled readiness to endure lower prices for a longer period.<\/p>\n

IN CONTEXT- <\/strong>Opec+ is still holding back nearly 5 mn bbl \/ d from the market, with many of these cuts set to stay through 2026. Although the group originally planned to phase out 2.2 mn bbl \/ d of voluntary cuts by September 2026, an accelerated timeline was agreed on in April. The combination of supply hikes and US trade tensions drove oil prices down below USD 60 a barrel in April, the lowest level in four years.<\/p>\n

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THE BIG STORY ABROAD- <\/p>\n

It\u2019s a quiet day in the global press<\/strong>, with no one story dominating the headlines.<\/p>\n

A missile fired by Yemen\u2019s Houthis <\/strong>landed<\/a><\/strong> near Israel\u2019s main international airport<\/strong>, causing injuries and disrupting flights after defense systems failed to interrupt the attack. The group has ramped up its missile attacks recently in response to a blockade<\/a> on Gaza that saw no food, fuel or medicine enter the enclave for more than 60 days.<\/p>\n

PM Netanyahu <\/strong>vowed an extensive response<\/strong> to the Houthi attack<\/strong>, coinciding with wider plans by the military to call up thousands of reservists<\/a> and \u201cgo deeper\u201d into Gaza. Meanwhile, US President Trump said<\/a> that Iran will be held responsible for any further attack by the militant group.<\/p>\n

ALSO WORTH READING THIS MORNING-<\/strong><\/p>\n