Most Gulf stock markets closed higher on Monday as oil prices rose ahead of the OPEC+ meeting, with the Saudi index outperforming its peers in the region.
Crude prices, a key catalyst for the Gulf financial market, jumped around $4 as OPEC+ considered cutting production by more than a million barrels per day (bpd) to support prices with this which would be its biggest drop since the start of the COVID-19 pandemic.
Oil prices have fallen for four straight months since June as COVID-19 lockdowns in top energy consumer China hurt demand, while rising interest rates and rising US dollar weighed on global financial markets.
Saudi Arabia’s benchmark rose 1.1%, boosted by a 3% rise in Retal Urban Development Co and a 3.5% jump in Dr. Sulaiman Al-Habib Medical Services. The kingdom could raise prices for most grades of crude it sells to Asia in November in anticipation of a recovery in demand and higher output at Chinese refineries after new quotas were issued export of products.
The benchmark for Qatar, the Gulf Cooperation Council’s top natural gas producer, ended up 0.4%. The Qatari stock exchange continued to post gains, while natural gas prices remained relatively stable, said Wael Makarem, senior market strategist at Exness. “The market may find some support as local companies prepare to release their quarterly results.”
Europe launched investigations after the discovery of major leaks in Russia’s two Nord Stream gas pipelines, which drove up gas prices and sparked a hunt for alternative supplies.
In Abu Dhabi, the index gained 0.1%, supported by a 0.2% rise in the UAE’s largest lender, First Abu Dhabi Bank. Dubai’s main stock index fell 0.6%, hit by a 10% drop in Mashreq Bank. The lender jumped 15% in the previous session on media reports that it had received offers from several companies to buy a stake in its payment unit. According to Makarem, markets in the region could experience some volatility as major US data is due this week.
Outside the Gulf, Egypt’s prime index closed flat.
(Reporting by Ateeq Shariff in Bengaluru; Editing by Uttaresh.V)