Saudi shares surge on record oil rise

07/11/2010 00:00 AST

Petrochemical shares in Saudi Arabia climbed 2.5 percent in early trading, lifting the Saudi index as crude prices hit a six-month high above $87 a barrel.

Saudi Arabia’s index gained 1.86 percent to close at 6,461.74 points and the petrochemical index rose to 6,174.70 points.

The measure has rallied 12 percent since its low this year in May.

Oil prices rose to a two-year peak Friday, posting a fifth straight gain after a seesaw session as support from a stronger-than-expected US jobs report offset a rebound by the dollar.

US crude for December delivery rose 36 cents to settle at $86.85 a barrel, the highest close since October 2008.

Friday’s $87.43 peak reached in post-settlement trading was the highest price since $89.82 was struck intraday on Oct. 9, 2008.

Prices rose $5.42, or 6.6 percent, for the week, the biggest percentage gain since the week to Feb. 19. Total crude trading volume was lackluster, at 501,000 lots with less than an hour of trading left Friday, nearly 25 percent below the 250-day average.

In London, ICE December Brent crude rose 11 cents to settle at $88.11.

Stocks advanced around the world this week after the Fed announced plans to buy an additional $600 billion of Treasuries in a second round of quantitative easing.

The central bank also kept its pledge to hold interest rates low for an “extended period” after Chairman Ben S. Bernanke said the program could be modified in some way.

“The market is taking its cue from the highly anticipated events of last week in the US,” said Asim Bukhtiar, equity analyst at Riyad Capital in Riyadh. “The QE2 announcement is expected to lift asset prices and risk tolerance.”

Saudi Basic Industries Corp (SABIC) advanced rose 2.54 percent to its highest level since May 12 after oil rose by $5.42 a barrel in the past week. National Industrialization Co (Tasnee) surged 3.7 percent to SR33, the highest price since Oct. 10.

Yanbu National Petrochemicals soared 3.7 percent to a six-month high of SR44.5. Shares in the banking index also rose, gaining 0.19 percent. Al-Rajhi Bank added 0.65 percent.

Etihad Etisalat Co rose 1.9 percent to SR54.75, the biggest gain since Sept. 21.

Saudi Gazette