Friday, September 13, 2024
If oil stabilises below $70, what will it mean for GCC markets?
تم إعداد هذا المنشور من قبل آرون ليسلي جون
Arun Leslie John, Imogen Lillywhite Zawya, September 13, 2024
Oil prices could stablise below $70 per barrel in the next couple of months as markets react to interest rate cuts, uncertainty around the US election and the likelihood of OPEC production increases by the end of the year, experts have said. But how are lower oil prices likely to affect GCC stock markets? While analysis after the global market selloff following the unwinding of the yen carry trade last month suggested a rout of GCC stock markets could occur if oil prices fell below $70 per barrel, the alternative view is that markets, particularly in the UAE and Saudi Arabia, do not correlate as closely to the oil price as they once did.
According to Mohamed Hashad, Chief Market Strategist at Noor Capital, concerns around the US’s Hurricane Francine had contributed to a rally in oil prices following Tuesday’s three year low, as well as positive news regarding US demand. Oil prices rose on Friday, extending a rally triggered by output disruptions in the US Gulf of Mexico, where Hurricane Francine forced producers to evacuate platforms. Brent crude futures rose by 34 cents, or 0.5%, to $72.31 per barrel by 0016 GMT. Global stock markets are likely to react positively to interest rate cuts by the UK’s Bank of England and the USA’s federal reserve next week, Hashad said.
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