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US, Saudi Arabia firms reach deals worth $55 billion

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Riyadh, May 20 : The US and Saudi Arabia announced deals worth over $55 billion on Saturday, coinciding with President Donald Trump’s arrival here for a two-day visit.

The Saudis announced they had reached preliminary agreements with US defence companies, industrial manufacturers and oil and gas companies following a Saudi-US CEO Forum in Riyadh, CNN reported.

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The series of deals also includes a $12 billion investment in a US oil refinery from Motiva Enterprises, a subsidiary of Aramco, Saudi Arabia’s national oil and gas company.

The deals are at least in part aimed at garnering goodwill with Trump, who has focused on delivering a boost to companies in those three industries, giving him a multibillion-dollar package to champion as he returns to the US.

The agreement with defence companies represents just a part of the $110 billion deals that Trump and Saudi King Salman are expected to broker by the end of the US President’s visit.

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The defence portion of the agreements on Saturday included a $6 billion deal for Lockheed Martin to build 150 Blackhawk helicopters in Saudi Arabia, helping the kingdom develop its defence industry, which is a key component of the country’s 2030 Vision plan.

US defence company Raytheon will also establish a branch in Saudi Arabia and General Dynamics agreed “to localise design, engineering, manufacturing, and support of armoured combat vehicles,” the government announced in a press release.

The American technology and engineering giant General Electric (GE) also reached a $15 billion deal to work with the Saudi kingdom on a range of projects aimed at improving the country’s power grid and energy capabilities.

Dow Chemicals will also build a $100 million manufacturing plant in the country.

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The Saudi oil and gas industry also reached partnerships worth $22 billion between Saudi Arabia and US companies that will bolster the country’s massive oil and gas industry.

Trump, along with his wife Melania and daughter Ivanka, arrived in Saudi Arabia’s capital on Saturday for the first stop on his five-nation foreign trip, the first of his presidency.

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Trump will be looking for more than just economic deals as he eyes an increased commitment from Saudi Arabia and other Gulf allies to combat the Islamic State and terrorism more broadly in the Middle East.

The deals represented a significant victory for the Saudi Deputy Crown Prince, Mohammed bin Salman, who has championed the Vision 2030 plan as necessary to modernising the country and diversifying its economy.

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16.8mn Americans seek unemployment aid amid pandemic

Hicks said job losses will propel the US unemployment rate over 15 per cent by the end of April, and “perhaps higher in later months”.

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Washington, April 10 : Newly released data has revealed that 6.6 million Americans filed initial unemployment claims last week, bringing the three-week total to a staggering 16.8 million and underscoring the mounting economic fallout from the COVID-19 pandemic.

In the week ending April 4, the number of people filing for unemployment benefits slightly decreased by 261,000 to 6,606,000, after setting a second straight record in previous week, the US Bureau of Labour Statistics reported on Thursday.

“The very large spikes in weekly jobless claims, which were over 6 million for two consecutive months, suggests a much broader set of job closures in the short run,” Michael Hicks, director of the Center for Business and Economic Research at Ball State University in Indiana, told Xinhua news agency email.

“The very rapid adoption of shelter-in-place orders by US Governors is clearly causing a significant reduction in employment across the states implementing it,” Hicks said.

As the pandemic continues to sweep across the country, over 40 states and the District of Columbia have ordered residents to stay at home unless necessary.

Deborah Birx, the COVID-19 response coordinator for the White House Coronavirus Task Force, has recently discouraged Americans from visiting the grocery store and pharmacy.

Hicks, however, noted that it was also possible that some workers will find work in other sectors (grocery and delivery stores) and for some businesses to reopen after acquiring sufficient personal protective equipment, or separating workers in an assembly line or factory.

The newly released number came after the figure spiked by 3 million to reach a record 3.3 million in the week ending March 21, and then surged by 3.34 million to reach 6.65 million in the week ending March 28, which was revised up 6,87 million.

The report also showed that the four-week moving average, a method to iron out data volatility, increased by 1,598,750 to 4,265,500.

The advance seasonally adjusted insured unemployment rate was 5.1 percent for the week ending March 28, an increase of 3.0 percentage points from the previous week’s unrevised rate, according to the report.

Hicks said job losses will propel the US unemployment rate over 15 per cent by the end of April, and “perhaps higher in later months”.

As COVID-19 cases continue to climb, non-essential businesses, such as theatres, museums, gyms and shopping malls, are largely shut down, and restaurants and bars are asked to avoid in-person dining, effectively paralyzing the consumption-driven US economy.

As of Friday morning, 465,750 confirmed cases have been reported across the US, with 16,684 deaths, according to the Center for Systems Science and Engineering at the Johns Hopkins University.

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Russia, US, Saudi agree to coordinate actions on oil market stabilization

As a result, the oil price plummeted to $22 per barrel which is the sharpest fall in 20 years.

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Moscow, April 10 : Russia, the US and Saudi Arabia have agreed to coordinate actions on stabilizing oil markets and minimize the impact of oil price volatility on global economy, the Kremlin said in a statement on Friday.

“Today, Russian President Vladimir Putin had a phone conversation with US President Donald Trump and Saudi Arabia King Salman bin Abdulaziz Al Saud,” the state-run TASS News Agency quoted the Kremlin press service as saying in the statement.

The sides confirmed “determination to coordinate actions to stabilize the situation in the global oil trade and minimize the negative impact of volatile oil price quotations to the global economy”, it said.

According to the statement, the sides discussed the situation on oil markets, including with regard to the emergency OPEC+ ministerial meeting and the upcoming video conference of G20 energy ministers.

The plan on oil production cuts within the OPEC+ framework envisages that Russia and Saudi Arabia will reduce their oil production by 2.5 million barrels per day, from the current 11 million barrels to 8.5 million barrels per day in May-June, according to a draft agreement obtained by TASS.

During a video conference that began on Thursday, OPEC+ nations have been discussing the situation on the oil market and proposed cuts.

The previous OPEC+ agreement expired on March 31.

After that Russia and Saudi Arabia failed to agree on the terms of its extension.

The parties’ withdrawal from the agreement pushed OPEC+ to increase production, which coincided with a sharp decline in oil demand caused by the coronavirus pandemic.

As a result, the oil price plummeted to $22 per barrel which is the sharpest fall in 20 years.

In late March, the partners decided to resume consultations and to invite more oil producing countries to take part in the joint activities to balance the oil market.

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US stocks rise after jobless blowout, Federal stimulus

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New York, April 10 : US stocks gained after another massive jump in the country’s initial jobless claims and the Federal Reserve’s latest move to support the economy amid the COVID-19 pandemic.

On Thursday, the Dow Jones Industrial Average climbed 285.8 points, or 1.22 per cent, to close at 23,719.37. The S&P 500 was up 39.84 points, or 1.45 per cent, to 2,789.82. The Nasdaq Composite Index increased 62.67 points, or 0.77 per cent, to 8,153.58, Xinhua news agency reported.

The number of initial jobless claims in the United States totalled 6.6 million last week amid mounting economic fallout from COVID-19, following a similarly staggering figure the week earlier, the US Bureau of Labor Statistics reported on Thursday.

The newly released number came after the figure spiked by 3 million to reach a record 3.3 million in the week ending March 21, and then surged by 3.34 million to reach 6.65 million in the week ending March 28, which was revised up to 6.87 million in the new report.

COVID-19 continues to impact the number of initial claims. Its impact is also reflected in the increasing levels of insured unemployment, the bureau noted.

The Federal Reserve on Thursday announced additional actions to provide up to US $2.3 trillion in loans to support the economy.

“This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic,” the US central bank said in a statement.

“The number of new claimants since the coronavirus hit the numbers is 17 million. Bear in mind, many people are out of work and have not filed. Many more are not eligible,” Chris Low, chief economist at FHN Financial, said in a note on Thursday.

“Stocks are up because the damage to the economy — evident in claims — is beyond comprehension, while the response of the Fed is easier to understand,” he added.

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