Gulf Markets See Declines as Oil Prices Drop

Manama, Bahrain – November 27, 2023

The majority of Gulf markets closed in the red on Sunday, reacting to a decline in oil prices on Friday, although the Saudi index managed to defy the trend and trade higher.

Oil, a crucial driver for Gulf financial markets, experienced a decline on Friday following the release of hostages in Gaza, which diminished the geopolitical risk premium. In Qatar, the index (.QSI) saw a 0.7% drop, primarily influenced by a 1.5% fall in Qatar Islamic Bank (QISB.QA) and a 1.5% decrease in petrochemical maker Industries Qatar (IQCD.QA).

Meanwhile, the Egyptian blue-chip index (.EGX30) saw a 0.8% decrease, with the leading bank “Commercial International Bank (COMI.CA)” witnessing a 2% loss.

Contrary to the regional trend, Saudi Arabia’s benchmark index (.TASI) showed resilience, edging 0.1% higher and ending two sessions of losses. This positive movement was attributed to a 1.2% rise in Elm Company (7203. SE).

Amidst these market movements, OPEC+ has reportedly moved closer to a compromise with African oil producers on 2024 output levels, according to sources. Disagreements over these targets had previously led to the postponement of a key meeting among the oil-producing nations.

Investors are also eagerly awaiting news on whether Saudi Arabia will extend its additional 1 million barrel per day (bpd) voluntary production cut, set to expire at the end of December.

Here’s a snapshot of the market movements:

  • Saudi Arabia (.TASI) rose 0.1% to 11,090
  • Qatar (.QSI) dropped 0.7% to 10,137
  • Egypt (.EGX30) lost 0.8% to 25,300
  • Bahrain (.BAX) eased 0.1% to 1,951
  • Oman (.MSX30) rose 0.2% to 4,628
  • Kuwait (.BKP) was up 0.1% to 7,320

The regional market dynamics underscore the delicate balance between geopolitical factors and oil prices, leaving investors closely monitoring developments that could impact the Gulf’s financial landscape.

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