Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

Global Energy Markets

Commodities

<p>Word on the street is that the "IPO of the century", the listing of a 5% stake in Saudi Arabia's crown jewel <a href="https://www.smartkarma.com/entities/27317" target="_blank" data-smartkarma-citation="entities:27317:1">Saudi Arabian Oil Co (131861Z AB)</a>, may not happen after all. While the odds certainly look stacked against it, especially in view of the challenges that have emerged with regard to an overseas listing, it may be too soon to write it off. </p>
<p>Saudi Aramco appears to be marching full steam ahead to ready itself for a public sale. If anything, it has been bolstering its downstream business portfolio, both at home and abroad, even more vigorously in recent months. The move to acquire a "strategic" (read majority) stake in the Saudi petrochemicals giant <a href="https://www.smartkarma.com/entities/27316" target="_blank" data-smartkarma-citation="entities:27316:1">Saudi Basic Industries Corp (SABIC AB)</a>, announced last week, is the latest evidence that Aramco continues to execute on its vision to become a fully integrated giant. Aramco CEO Amin Nasser said over the weekend that the IPO may be delayed because of the negotiations over SABIC. </p>
<blockquote>
<p>“If the deal is completed, with relevant regulations taken into account, it will definitely affect the timeframe for the partial IPO [initial public offering] of Saudi Aramco,” Nasser told Al Arabiya TV.</p>
</blockquote>
<p>Irrespective of whether, when and where the Aramco listing takes place, the kingdom, with support from  Russia, will ensure the OPEC/non-OPEC combine does not let go of the reins of the global oil market. Not only that, but over the coming months, it will increasingly fall upon Saudi Arabia, as the holder of the biggest spare crude production capacity in the world, to walk the tightrope between the oil price expectations of some of its more hawkish OPEC peers on the one hand and the major consuming countries on the other. Last week proved again that not only is it physically prepared for that tightrope walk, but also has the ability to  jawbone the market if needed, to keep crude in the new goldilocks range of $70-80/barrel.</p>
<p>We look at the implications of Aramco's bid for SABIC and its recent spate of downstream investments and assess the connection between the company's IPO plans and oil prices.  </p>
<table class="table table-striped">
<tbody>
<tr>
<td>Contract</td>
<td style="text-align: center;">Jul 20 settle</td>
<td style="text-align: center;">Jul 13 settle</td>
<td style="text-align: center;">52-week high</td>
<td style="text-align: center;">52-week low</td>
</tr>
<tr>
<td>ICE Brent (Sep 2018)</td>
<td style="text-align: center;">73.07</td>
<td style="text-align: center;">75.33</td>
<td style="text-align: center;">79.80</td>
<td style="text-align: center;">48.06</td>
</tr>
<tr>
<td>NYMEX WTI (Aug 2018)</td>
<td style="text-align: center;">70.46</td>
<td style="text-align: center;">71.01</td>
<td style="text-align: center;">74.15</td>
<td style="text-align: center;">45.77</td>
</tr>
</tbody>
</table>
<div style="text-align: left;" class="content-caption">Source: CME (NYMEXT WTI), ICE (Brent). All prices are in USD/barrel. "Settle" refers to the day's closing price. All figures are for the most-active front-month contract on the given day. The 52-week high and low numbers are for the front-month contract's closing levels for the day.</div>

Word on the street is that the "IPO of the century", the listing of a 5% stake in Saudi Arabia's crown jewel Saudi Arabian Oil Co (131861Z AB), may not happen after all. While the odds certainly look stacked against it, especially in view of the challenges that have emerged with regard to an overseas listing, it may be too soon to write it off. 
Saudi Aramco appears to be marching full steam ahead to ready itself for a public sale. If anything, it has been bolstering its downstream business portfolio, both at home and abroad, even more vigorously in recent months. The move to acquire a "strategic" (read majority) stake in the Saudi petrochemicals giant Saudi Basic Industries Corp (SABIC AB), announced last week, is the latest evidence that Aramco continues to execute on its vision to become a fully integrated giant. Aramco CEO Amin Nasser said over the weekend that the IPO may be delayed because of the negotiations over SABIC. 

“If the deal is completed, with relevant regulations taken into account, it will definitely affect the timeframe for the partial IPO [initial public offering] of Saudi Aramco,” Nasser told Al Arabiya TV.

Irrespective of whether, when and where the Aramco listing takes place, the kingdom, with support from  Russia, will ensure the OPEC/non-OPEC combine does not let go of the reins of the global oil market. Not only that, but over the coming months, it will increasingly fall upon Saudi Arabia, as the holder of the biggest spare crude production capacity in the world, to walk the tightrope between the oil price expectations of some of its more hawkish OPEC peers on the one hand and the major consuming countries on the other. Last week proved again that not only is it physically prepared for that tightrope walk, but also has the ability to  jawbone the market if needed, to keep crude in the new goldilocks range of $70-80/barrel.
We look at the implications of Aramco's bid for SABIC and its recent spate of downstream investments and assess the connection between the company's IPO plans and oil prices.  



Contract
Jul 20 settle
Jul 13 settle
52-week high
52-week low


ICE Brent (Sep 2018)
73.07
75.33
79.80
48.06


NYMEX WTI (Aug 2018)
70.46
71.01
74.15
45.77



Source: CME (NYMEXT WTI), ICE (Brent). All prices are in USD/barrel. "Settle" refers to the day's closing price. All figures are for the most-active front-month contract on the given day. The 52-week high and low numbers are for the front-month contract's closing levels for the day.

Weekly Oil Views: Saudi Stewardship of Oil Prices Decouples from Aramco IPO

Saudi Arabia

Saudi Basic Industries Corporation (SABIC) manufactures chemicals and steel. The Company produces methanol, ethylene, propylene, benzene, toluene, xylene, industrial gases, thermoplastic resins, polyester, melamine, urea fertilizers, and long and flat hot and cold rolled steel products.

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Saudi Basic Industries (SABIC AB)

Weekly Oil Views: Saudi Stewardship of Oil Prices Decouples from Aramco IPO

Word on the street is that the "IPO of the century", the listing of a 5% stake in Saudi Arabia's crown jewel Saudi Arabian Oil Co (131861Z AB), may...

Vandana Hari

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