Due to lower oil prices and disappointing earnings, most Gulf stock markets declined in early trade on Wednesday, but the Abu Dhabi index increased.

Despite supply concerns, oil prices declined after industry data revealed that U.S. crude stockpiles rose more than anticipated last week.

Increasing crude stockpiles fueled fears of a global recession. It would reduce demand, and ongoing supply constraints kept prices in a narrow range.

Despite reporting a higher quarterly profit, Saudi Arabia’s benchmark index fell 0.3%. It was led by a 2.1% drop in Retal Urban Development Co.

SABIC Agri-Nutrients Co (2020. S.E.) fell about 3% after reporting a year-on-year increase in quarterly net profit but a decrease from the previous quarter.

Yanbu Petrochemicals Company (2290. S.E.) fell 4.5% as the petrochemical firm reported a quarterly loss. However, Al Jouf Cement (3091. S.E.) rose more than 6% after reporting a net profit of 74.1 million riyals, up from 54.9 million riyals the previous year. In a televised speech to the nation’s advisory Shura Council, the Emir Sheikh Tamim bin Hamad al-Thani added that the country’s budget has a surplus of 47.3 billion Qatari Riyals ($12.99 billion) as a result of high energy prices.

In the transition to clean and renewable energy, oil and gas companies are increasingly finding new markets for their products. Because they can’t sell much gasoline, they want to sell more plastics, paints, pesticides, fertilizers, and other oil and gas products. Therefore, existing petrochemical plants will be expanded on a large scale and new plants will be built.

China’s Thirst for U.S. Natural Gas

China is buying up American natural gas. This raises concerns in Washington and fuels speculation of a new conflict between the two global powers.

Chinese energy companies are the fastest-growing buyers of U.S. natural gas exports. They accounted for nearly half of the natural gas that U.S. companies agreed to transport last year. However, some companies are working against America’s interests. They are dealing oil from sanctioned countries, drilling in areas known for human rights violations. Moreover, they assist the Chinese military in capturing contested territory from its neighbors.

Tensions between Washington and Beijing rise and natural gas prices suffocate American manufacturers. Hence, lawmakers from both parties are urging the White House to consider new restrictions on gas sales to China.

China’s economic development, the world’s second-largest economy, has been seen as a favorable market for U.S. gas as part of a wider U.S. strategy leading to Beijing’s democratic reforms, U.S. trade interests, and peaceful bilateral relations. The new calls for limits on energy deals with Chinese firms represent a tougher stance than many American officials have taken in recent years toward doing business with China. Due to national security concerns, the federal government has tried to restrict the export of chips and other sensitive technology. Hence, trade in commodities such as gas and oil was safer for American firms to maintain commercial ties with China’s rapidly growing economy.

Oil and gas exports have been a particular focus for the past two administrations as they sought to expand foreign markets for American companies. As part of a deal to boost domestic renewable energy production, the Obama administration agreed to end a longstanding ban on U.S. oil and gas exports in 2015.


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