Saudi Arabia is “not prepared” to cut oil production, Foreign Minister Adel al-Jubeir said Thursday, after it agreed to a tentative deal with Russia to freeze output if other oil producers followed suit.
“If other producers want to limit or agree to a freeze in terms of additional production that may have an impact on the market, but Saudi Arabia is not prepared to cut production,” al-Jubeir said. “The oil issue will be determined by supply and demand and by market forces. The Kingdom of Saudi Arabia will protect its market share and we have said so.” Oil prices rose more than 14 percent over the last three days after the announcement of the deal between Saudi Arabia and Russia. [AFP, Reuters, 2/18/2016]
Tunisia is preparing to issue euro-denominated bonds worth as much as 1 billion euros ($1.12 billion) within a few weeks, an anonymous government official said Friday. “We will go to the international market in few weeks . . . it should be between mid-March and May 2016, for between 750 million euros and 1 billion euros,” the official said. He said the financing would help cover part of Tunisia’s budget deficit and that the Finance Ministry had asked the Central Bank of Tunisia to begin the technical procedures for the bond operation. Tunisia last went to the international market a year ago with a $1 billion bond. On Thursday Tunisia began talks with the International Monetary Fund (IMF) over a new credit program. The program would be tied to measures aimed at strengthening the country’s economy and finances and would likely be worth at least $1.7 billion over four years. Head of the IMF delegation Amine Mati met with the Central Bank Governor Chedli Ayari to discuss the details of the credit program. [Reuters, 2/19/2016]
Egypt struggles to get subsidized food to poor amid dollar crisis
In recent weeks, imported commodities in Egypt have been in short supply as a dollar shortage affects state importers’ ability to secure regular supplies. This has affected millions of Egyptians who rely on state subsidies provided as credits on smartcards. Supply Minister Khaled Hanafi said Thursday that stocks at state food companies are being replenished with dozens of products and will be available to smartcard-holders in March. Cooking oil has been impacted especially hard by the foreign exchange shortage. Egypt’s state importers canceled three cooking oil tenders in the last three months after not receiving enough offers or because prices were too high. Traders say they now have to factor in the cost of expected delay. “You are talking millions of dollars here. These delays are costly,” said one trader. “They make you feel like a beggar when you chase your money, not answering calls, not responding.” A lack of clarity on rice policy has also caused confusion in the market. Egypt issued a rice import tender last month only to cancel it again. Grocers say there is not enough rice in state stores. Hanafi said 2,000 tonnes of rice and 2,500 tonnes of oil are being supplied daily to replenish stocks. [Reuters, 2/18/2016]
Bahrain’s government canceled a $750 million bond sale on Thursday after Standard & Poor’s (S&P) downgraded its rating of the kingdom’s debt to junk status. Bahrain launched a $750 million, two-part bond sale on Tuesday, expanding the borrowing size by $250 million from its original target after it attracted over $1.35 billion of orders. On Wednesday, S&P cut Bahrain by two notches to ‘BB/B’ with a stable outlook, pushing the rating below investment grade. “We expect the impact of lower oil prices will further strain Bahrain’s already weak fiscal and debt metrics to the extent that we now view these credit measures as consistent with a ‘BB’ rating,” S&P said. After consulting lead managers of the bond issue, Bahrain’s central bank said it decided “to not proceed” with the sale. It is rare for sovereign governments to cancel debt sales once they have begun. “Any future transaction will be subject to market conditions,” the central bank said without elaborating. [Reuters, 2/18/2016]
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Egypt seeks to open talks with Libya on oil import | Libya Monitor (subscription)
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Saudi Arabia is “not prepared” to cut oil production, Foreign Minister Adel al-Jubeir said Thursday, after it agreed to a tentative deal with Russia to freeze output if other oil producers followed suit. “If other producers want to limit or agree to a freeze in terms of additional production that may have an impact on the market, but Saudi Arabia is not prepared to cut production,” al-Jubeir said. “The oil issue will be determined by supply and demand and by market forces. The Kingdom of Saudi Arabia will protect its market share and we have said so.” Oil prices rose more than 14 percent over the last three days after the announcement of the deal between Saudi Arabia and Russia. [AFP, Reuters, 2/18/2016]
Tunisia plans to issue bonds between EUR 750 million and EUR 1 billion
Tunisia is preparing to issue euro-denominated bonds worth as much as 1 billion euros ($1.12 billion) within a few weeks, an anonymous government official said Friday. “We will go to the international market in few weeks . . . it should be between mid-March and May 2016, for between 750 million euros and 1 billion euros,” the official said. He said the financing would help cover part of Tunisia’s budget deficit and that the Finance Ministry had asked the Central Bank of Tunisia to begin the technical procedures for the bond operation. Tunisia last went to the international market a year ago with a $1 billion bond. On Thursday Tunisia began talks with the International Monetary Fund (IMF) over a new credit program. The program would be tied to measures aimed at strengthening the country’s economy and finances and would likely be worth at least $1.7 billion over four years. Head of the IMF delegation Amine Mati met with the Central Bank Governor Chedli Ayari to discuss the details of the credit program. [Reuters, 2/19/2016]
Egypt struggles to get subsidized food to poor amid dollar crisis
In recent weeks, imported commodities in Egypt have been in short supply as a dollar shortage affects state importers’ ability to secure regular supplies. This has affected millions of Egyptians who rely on state subsidies provided as credits on smartcards. Supply Minister Khaled Hanafi said Thursday that stocks at state food companies are being replenished with dozens of products and will be available to smartcard-holders in March. Cooking oil has been impacted especially hard by the foreign exchange shortage. Egypt’s state importers canceled three cooking oil tenders in the last three months after not receiving enough offers or because prices were too high. Traders say they now have to factor in the cost of expected delay. “You are talking millions of dollars here. These delays are costly,” said one trader. “They make you feel like a beggar when you chase your money, not answering calls, not responding.” A lack of clarity on rice policy has also caused confusion in the market. Egypt issued a rice import tender last month only to cancel it again. Grocers say there is not enough rice in state stores. Hanafi said 2,000 tonnes of rice and 2,500 tonnes of oil are being supplied daily to replenish stocks. [Reuters, 2/18/2016]
Bahrain cancels $750 million bond sale after S&P downgrade
Bahrain’s government canceled a $750 million bond sale on Thursday after Standard & Poor’s (S&P) downgraded its rating of the kingdom’s debt to junk status. Bahrain launched a $750 million, two-part bond sale on Tuesday, expanding the borrowing size by $250 million from its original target after it attracted over $1.35 billion of orders. On Wednesday, S&P cut Bahrain by two notches to ‘BB/B’ with a stable outlook, pushing the rating below investment grade. “We expect the impact of lower oil prices will further strain Bahrain’s already weak fiscal and debt metrics to the extent that we now view these credit measures as consistent with a ‘BB’ rating,” S&P said. After consulting lead managers of the bond issue, Bahrain’s central bank said it decided “to not proceed” with the sale. It is rare for sovereign governments to cancel debt sales once they have begun. “Any future transaction will be subject to market conditions,” the central bank said without elaborating. [Reuters, 2/18/2016]
Also of interest
Saudi charm offensive buys it time as S&P downgrades debt | Reuters
Saudi Arabia and Iraq sell more oil to India | Reuters
Will the GCC be able to adjust to lower oil prices? (analysis) | Brookings
Gulf Keystone says Iraqi Kurdistan authorizes oil export payment | Reuters
Egypt to double underground metro ticket price | Ahram Online
Experts say devaluation would support Egypt’s economy | DNE
Egypt’s banks record EGP 8.2 billion increase in deposits in November | DNE
Egypt seeks to open talks with Libya on oil import | Libya Monitor (subscription)
Egypt’s wheat mess is deja vu for traders after Jordan woes | Bloomberg
India plans to develop automotive industry in Tunisia | TAP
Lira weakens further following Ankara bomb attack | Today’s Zaman