DUBAI: Gulf stock markets, including the previously resilient Saudi Arabia, extended losses alongside oil on Monday, while Egypt dropped on profit-taking after a strong run and ahead of a fresh public offer of shares.

Brent crude fell to around $54 a barrel, its lowest for more than a month, on rising global inventories and signs of a possible nuclear deal with Tehran that could allow more Iranian oil exports.

Saudi Arabia's Tadawul All-Share Index (TASI) posted its biggest single-day loss in two months, dropping 2.0 percent to 9,438 points on heavy volume to a two-week low of 9,438 points. The petrochemical sector fell 2.6 percent.

The earnings of petrochemical producers, which constitute the biggest sector on Saudi Arabia's stock market, have been hit hardest by oil's sustained fall.

Also, Saudi Arabia's index had vastly outperformed other major Gulf markets, rising 15.5 percent this year as of Sunday, so the uncertainty over oil tempted short-term investors to book profits.

In the longer run, money is likely to continue flowing into the Kingdom as it prepares to open its stock market to direct foreign investment in the first half of this year, a move that could eventually help it secure emerging market status from major index compilers.

Dubai's index dropped 2.6 percent to 3,520 points. Abu Dhabi's benchmark fell 1.4 percent to 4,365 points in another broad sell-off.