Oil edges up toward $49
Oil edges up toward $49
Libya’s national oil production stands at 1.03 million barrels per day (bpd), little changed from its level since the end of last month, an oil industry official said.
US drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. Rig additions over the past four weeks averaged five, the slowest pace of growth since November.
Key technical indicators are bullish, with prices rising above the short-term 50-day moving averages, traders said.
Brent crude fell 24 cents to $48.67 a barrel by 11:51 a.m. EDT (1551 GMT). US crude traded at $46.21, down 33 cents. Prices had earlier touched their highest since July 5.
A sharp drop in US crude inventories in the week to July 7 supported prices last week. But crude stocks in industrialized nations remained high, putting a brake on the oil price rally.
US gasoline margins rose to the highest since April 24 amid signs of improved demand and inventory declines, traders said.
Oil prices are less than half their mid-2014 level because of a persistent glut, even after OPEC with Russia and other non-OPEC producers cut supplies since January.
While OPEC-led cuts have offered prices some support, rising supplies from Nigeria along with Libya, two OPEC states exempt from the pact, and increasing US production have weighed on the market.
Saudi stocks receive landmark emerging markets upgrade from MSCI
- Market authorities in Saudi Arabia have introduced a series of reforms in the past 18 months
- MSCI’s Emerging Market index is tracked by about $2 trillion in active and global funds
LONDON: Saudi Arabian equites are poised to attract up to $40 billion worth of foreign inflows, following a landmark decision by index provider MSCI to include the Kingdom’s stocks in its widely tracked Emerging Markets index.
"MSCI will include the MSCI Saudi Arabia Index in the MSCI Emerging Markets Index, representing on a pro forma basis a weight of approximately 2.6% of the index with 32 securities, following a two-step inclusion process," the MSCI said in a statement late on Wednesday night Riyadh time.
“Saudi Arabia’s inclusion in MSCI’s EM Index is a milestone achievement and will likely bring with it significant levels of foreign investment,” Salah Shamma, head of investment for MENA at Franklin Templeton Emerging Markets Equity, told Arab News.
“It is a recognition of the progress Saudi Arabia has made in implementing its ambitious capital markets transformation agenda. The halo effect of such a move will be felt across the stock exchanges of the entire Gulf Cooperation Council (GCC).”
Market authorities in Saudi Arabia have introduced a series of reforms in the past 18 months to bring local capital markets more in line with international norms, including lower restrictions on international investors, and the introduction of short-selling and T+2 settlement cycles.
Such reforms prompted index provider FTSE Russell to upgrade the Kingdom to emerging market status in March, opening the country’s stocks up to billions worth of passive and active inflows from foreign investors.
MSCI’s Emerging Market index is tracked by about $2 trillion in active and global funds. The inclusion of Saudi stocks in the index, alongside FTSE Russell’s upgrade, is forecast to attract as much as $45 billion of foreign inflows from passive and active investors, according to estimates from Egyptian investment bank EFG Hermes.
The upgrade announcement was widely expected by the region’s investment community, following a similar emerging markets upgrade announcement by fellow index provider FTSE Russell in March.
“MSCI index inclusion will be a historic milestone for the Saudi market as it will allow for sticky institutional money to make an entry in 2019 which will help deepen the market,” said John Sfakianakis, director of economic research at the Gulf Research Center in Riyadh.