Dubai Leads Gulf Stocks Higher After OPEC Extends Output Cuts

(Bloomberg) --

Dubai shares climbed the most in the Middle East on Sunday after OPEC+ extended its record output cuts, underpinning the recovery in oil prices.

The DFM General Index rose 4.6%, trimming losses this year to 20%. Gauges in Saudi Arabia, Abu Dhabi, Kuwait, Oman and Qatar gained between 0.6% and 2.4%. Stocks in Egypt climbed 4.6% after the government agreed a $5.2 billion stand-by loan with the International Monetary Fund.

OPEC+ decided at the weekend to roll-over export curbs and monitor compliance more closely to ensure members don't pump more oil than they've pledged. Brent crude rose 19% last week to $42.30 a barrel in anticipation of the agreement, its sixth-consecutive weekly advance, with shares in developed and emerging markets also jumping. Consultant Wood Mackenzie Ltd. sees Brent rising further to as much as $50 because of the supply restrictions and increased demand as more economies reopen.

“The recovery in oil prices and further extension of record production cuts by OPEC+ until the end of July will have a positive impact on domestic markets,” said Iyad Abu Hweij, a managing partner at Allied Investment Partners PJSC in Dubai.

Read more about how the production cut extension is a win for the Saudi-Russian alliance.

MIDDLE EASTERN MARKETS:

• The main index in Saudi Arabia is still trading below the level of early March, when the kingdom started an oil price war with Russia
  • The Tadawul All Share Index rises 0.8% in Riyadh, with Saudi Aramco up 0.6%
  • Al-Ahlia Cooperative Insurance gains 9.9% after signing an accord to merge with Gulf Union Cooperative Insurance
• Kuwait's Premier Market Index advances 0.9%
  • MORE: Kuwait Asks Ministries to Cut Budget by at Least 20%: Kuna
  • Qatar's QE Index rises 1.1%
    • READ: Qatari Officials Say Ready to Resolve Gulf Crisis With Dialogue
    • In Egypt, the EGX 30 advances as much as 4.6% after the International Monetary Fund reached a staff-level agreement on a $5.2 billion stand-by arrangement aimed to alleviate the economic impact of Covid-19
    • Some earnings releases:
      • Red Sea International 1Q Loss 25.1 Mln Riyals, +39% Y/y
      • Saudi Chemical First Quarter Profit 38.0 Mln Riyals, -3.4% Y/y

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