THIS MORNING: Will Opec start easing production cuts in the second half?

Good morning, wonderful people. We have a busy week ahead, and that’s just a prelude to what we expect will be a positively frenetic news week starting seven days from now when the World Economic Forum’s special meeting in Riyadh kicks off.

The WEF meeting runs 28-29 April and will see a who’s who of the global and regional business communities descend on the capital city to prospect for business. The three big themes: energy, “global collaboration,” and inclusive growth.

Thinking of coming for a visit? Book your hotel room now — if you can find one.

MEANWHILE- Innovation Week 2024 kicks off today at the King Abdulaziz City for Science and Technology (KACST) in Riyadh. The event is organized by the Research and Development Innovation Authority and aims to provide a platform for researchers, entrepreneurs, and investors, among other stakeholders, to exchange ideas.

WEATHER- Riyadh folks, we’re still not out of the woods with our favorite weather app recommending rain boots and umbrellas this morning. Thunderstorms are in the cards for the capital with a high of 36°C and a low of 24°C. It’s more of the same in Al-Taif.

OIL WATCH-

Will Opec start easing production cuts in the second half? The International Monetary Fund (IMF) thinks Opec might start to lift voluntary production cuts as early as July, Bloomberg reports. “We are assuming the full reversal of cuts is happening at the beginning of 2025,” the business information service reports quoting the lender’s mission chief to the Kingdom, Amine Mati, as saying.

The details: The IMF expects the government to boost crude production to 10 mn barrels per day in early 2025, up from the current three-year low of 9 mn barrels. Earlier this month, Opec+ ministers left voluntary production cuts unchanged in an online meeting, while welcoming Iraq and Kazakhstan’s pledge to get in line. The meeting came weeks after the oil cartel extended voluntary curbs that will remain in effect through June 2024.

In context: Mati’s view meshes with the IMF’s recent forecast, which sees the domestic economy growing at 6.0% next year, up from the 5.5% projected in January, and the World Bank’s forecast of 5.9% in 2025, up from a previous projection of 4.2%.

WHY THIS MATTERS- For Saudi to avoid running a budget deficit, officials need to see an average selling price of USD 96.20 a barrel — and to produce about 9.3 mn barrels a day, Bloomberg reports in a separate story, citing an IMF report. This is 21% up from the lender’s October forecast, and 10% higher than the current price of the benchmark Brent futures which closed at USD 87.3% on Friday. This is the highest price level in nearly six months.

Interested in the non-oil story of the domestic economy? Head to the top of this morning’s news well, where we have the rundown of everything Saudi-relevant from the IMF and World Bank spring meetings in Washington, DC, which wrapped up this weekend.

THE BIG STORY ABROAD-

War and politics dominate the front pages of the global business press as the media takes stock of Israel’s limited strike on Iran this Friday — the third time that the two sides exchanged fire in less than a week. Iran downplayed the strike, appearing eager to close this chapter of its long-running covert battle with Israel.

Last week may have marked a turning point: The open exchange of attacks brought a decades-long shadow war between Iran and Israel into the open, the Financial Times and Bloomberg warn, and the worry is that “limiting escalation will get harder over time.”

MEANWHILE- The United States is seeking an alliance with the UAE on artificial intelligence. Last week’s USD 1.5 bn investment in G42, the Abu Dhabi-based AI leader, could be the first of a number of big agreements as American officials look to advance talks with Google and OpenAI, too.

AND- The US House of Representative has passed a USD 95 bn aid bill for Ukraine and Israel and will send the measure on to the Democrat-dominated Senate, meaning it’s likely to become law. US Secretary of State Antony Blinken is warning China over weapons exports to Russia. And Hamas is mulling whether to move its political headquarters out of Qatar to Oman or a second Arab state.

WATCH THIS SPACE-

#1- Single-stock options (SSOs) on mining giant Maaden’s stock will begin trading today, according to a statement by Tadawul on Thursday. The contracts will be cleared by the Securities Clearing Center Company (Muqassa). Tadawul launched SSOs in November as its third derivatives product.

What’s this SSO of which you speak? The instrument allows investors to hedge their equity portfolios — and traders to speculate on whether the underlying asset.

#2- Acwa Power, Irena partner on global renewable energy transition: Renewable energy giant Acwa Power inked an agreement with International Renewable Energy Agency (Irena) to “drive the worldwide transition to renewable energy sources,” according to a Acwa Power said in a statement on Thursday. The two will look into how to “mobilize finance and investment in renewable energy projects and support infrastructure, facilitating the development, storage, distribution, transmission, and consumption of renewables.” They will also exchange data on necessary infrastructure investment for renewable energy, green hydrogen, solar and others.

#3- The government’s National Competitiveness Center (NCC) and the World Bank are set to establish a knowledge center in Saudi to “disseminate the culture of economic reforms globally,” state news agency SPA reported on Friday. No further details were provided on the center, but Commerce Minister and NCC Chairman Majid Al Qasabi said it will “pave the way for further regional and international cooperation in competitive fields”.

What the NCC? Founded in 2019, the NCC is an independent government center that aims to enhance and develop Saudi’s competitive environment. It also outlines legislative and procedural reforms aimed at boosting the economy’s competitiveness globally.

PSAs-

Need some guidance on your small business? You can now visit Monshaat’s new HQ at King Khaled Road in Riyadh, it said in a post on X. The Commerce Ministry-affiliated authority regulates, supports and develops the Kingdom’s SMEs sector.

SPORTS-

#1- Saudi could turn the World Snooker Championship into a “super event,” The Guardian reported, citing statements by seven-time champion Ronnie O’Sullivan. “I think Saudi Arabia could get hold of this tournament, grab it by the scruff of the neck and turn it into a Wimbledon or a French Open or US Open, and really make it a super event,” O’Sullivan said of the Kingdom’s growing investments in snooker. His statements come amid debate on the future of the sport’s most prestigious event when hosting rights by Sheffield’s Crucible — the venue which has hosted the event for 47 years — expire in 2027.

BACKGROUND- O’Sullivan, who won the inaugural Riyadh Season World Masters of Snooker last month, was named last week Saudi ambassador for the sport for the next three years. The World Masters of Snooker is set to come back to Riyadh next year with USD 1 mn purse on offer as Riyadh Season becomes an official partner of the World Snooker Championship.

#2- Overconfidence wasn’t why Al Ain snapped Al Hilal’s winning streak inthe first leg of the Asian Champions League semi-final, Reuters reported, citing statements by Al Hilal coach Jorge Jesus. “There is no such thing called over confidence,” he said. “In football, you can’t control what happens in the match. We are not used to conceding four goals and we should sit and analyze why this happened and correct it.” The two teams will share the field again for the second leg on Tuesday.

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CIRCLE YOUR CALENDAR-

Riyadh will host the 2024 IsDB Group annual meeting from Saturday, 27 April until Wednesday, 30 April.

Riyadh will host a special meeting of the World Economic Forum on 28-29 April.

Automechanika Riyadh will open on Tuesday, 30 April till Thursday, 2 May at the Riyadh International Convention and Exhibition Center.The annual trade fair will showcase the automotive industry’s latest advances and innovations.

The King Salman bin Abdulaziz Royal Reserve Festival will kick off today at the Cultural Center in Al-Qurayyat governorate, state news agency SPA reports. The art and culture event runs until Thursday, 18 April.