Saudi stocks increase as oil rises toward $56

11/04/2017 06:06 AST

Saudi stocks were higher after the close on Monday, as gains in the Multi Investment, Retail and Financial Services sectors led shares higher. The stock benchmark Tadawul All Share Index rose 0.05%.

Oil rose toward $56 a barrel on Monday, supported by another shutdown at Libya›s largest oilfield, tension over Syria following the US missile strike and signs that an OPEC-led supply cut is helping to clear excess supplies.

The best performers of the session on the Tadawul All Share were United Electronics Company, which rose 6.45% or 2.20 points to trade at 36.30 at the close. Meanwhile, Al-Ahlia Insurance Company added 3.07% or 0.40 points to end at 13.45 and Saudi Company for Hardware was up 3.02% or 2.75 points to 93.75 in late trade.

The worst performers of the session were Saudi Cement Company, which fell 10.04% or 6.00 points to trade at 53.75 at the close. Halwani Bros declined 4.59% or 2.50 points to end at 52.00 and The Company for Coop. Insurance was down 3.17% or 3.00 points to 91.50.

Rising stocks outnumbered declining ones on the Saudi Arabia Stock Exchange by 77 to 69 and 31 ended unchanged.

Libya›s Sharara oilfield was shut on Sunday after a group blocked a pipeline linking it to an oil terminal, a Libyan oil source said. The field had only just returned to production, after a week-long stoppage ending in early April.

“It means that at least one potential source of additional supply has fallen away for the time being,” said Carsten Fritsch of Commerzbank, referring to the Libyan outage.

Brent crude LCOc1, the global benchmark, rose 58 cents to $55.82 at 1332 GMT, not far from the one-month high of $56.08 reached on Friday. US crude CLc1 was up 55 cents at $52.79.

Oil also climbed on heightened tension in the Middle East, a region that is home to more than a quarter of the world›s oil output. Crude rallied last week after the United States fired missiles at a Syrian government air base.

“The developments in Syria should be factored in as an additional risk premium in the oil price going forward, especially now that oil inventories are drawing down and the market is no longer in massive surplus,” said Bjarne Schieldrop, analyst at SEB.

He expects Brent to average $57.50 in the second quarter, “which means we are likely to see $60 printed at times during this period.”

Oil prices have also been supported by a deal led by the Organization of the Petroleum Exporting Countries to cut output by 1.8 million barrels per day for the first six months of 2017, to get rid of excess supply. Libya, and another OPEC member Nigeria, are exempt from cuts.

Saudi Gazette