Gulf markets rise on oil price surge

Looming sanctions against Iran are fueling crude oil price rises which is benefiting Gulf exporters. (Shutterstock)
Updated 01 July 2018

Gulf markets rise on oil price surge

  • Bahrain’s bonds and currency rebound
  • In Abu Dhabi, Eshraq Properties jumps 6.7 percent

DUBAI: Gulf stock markets closed in positive territory on Sunday, boosted by a surge in oil prices, an increase in retail investors and encouraging news on Bahrain’s financial prospects.

Oil prices surged last week on concerns that US sanctions against Iran would remove a substantial volume of crude oil from world markets at a time of rising global demand.

Bahrain’s bonds and currency rebounded from multi-year lows late last week after Saudi Arabia, Kuwait and the UAE said in a joint statement that they would announce soon measures to support its economy.

The Bahraini index closed 0.2 percent up on Sunday. It climbed 0.9 percent since last week’s announcement from the country’s regional allies. The Saudi index gained 0.3 percent, with petrochemical companies rising on the back of higher oil prices, and with real estate investment trust funds posting large gains of up to 10 percent.

The best performer was Al Jazira Mawten REIT, up 9.9 percent, followed by Taleem REIT Fund, which jumped 9 percent. A fund manager said an increase of retail investors participating in the Saudi market over the last week could have pushed REIT valuations up, given that REIT stocks are generally speculative and attract high-yield seekers.

Lifted by surging oil prices, petchem companies such as Saudi Kayan Petrochemical Co. and Sahara Petrochemical Co. gained 1.3 percent and 1.9 percent, respectively. Stock exchanges were up across the region, with the Dubai index and the Abu Dhabi index up 1.5 percent and 1.3 percent respectively.

In Abu Dhabi, Eshraq Properties jumped 6.7 percent. The company said last week it was seeking to deploy "excess liquidity" in investments across the UAE, after dropping merger plans with Abu Dhabi developer Reem Investments. It also said it has no exposure to Dubai's private equity Abraaj Group.

In Dubai, most stocks were up, but trading volume was concentrated on Drake & Scull (DSI), which shed 0.7 percent after some gains earlier on Sunday.

In the past two months, shares in the contractor have been dropping, falling to their lowest level ever, as retail investors offloaded them amid concerns about DSI’s business outlook and an investigation into its former management team.

Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018

Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.