SAUDI LOSE 7%
Stock markets in Saudi Arabia and Dubai closed around 7 percent lower on Sunday on the back of a further slide in oil prices.
Dubai's main index closed 6.96 percent lower on its opening day of trading for the week. Saudi Arabia's Tadawul, the region's largest index, lost 6.86 percent. Other Mideast indexes, which trade from Sunday to Thursday, also tumbled. Egypt's main index, the EGX30, dropped 5.4 percent while Abu Dhabi's index dropped 5 percent.
Sunday was the first day of trading in the Middle East after Brent crude, a benchmark for international oil, fell more than a dollar to close Friday at $45.46 while the price of U.S. crude closed at $40.45.
Oil futures have been falling for eight consecutive weeks because of ample supplies of crude and a slowing global economy. Prices have fallen almost 60 percent since this time last year.
Sherif Aziz, an analyst at Mubasher Trade, said there are also growing concerns about a slowdown in China, which announced a devaluation of its currency, the yuan. Concerns about slowing growth in the world's second-largest economy shook markets around the world and drove the U.S. stock market to its biggest drop in nearly four years on Friday.
The tumble in the Saudi stock also comes after the Fitch ratings agency revised its outlook for the country from "stable" to "negative" in its foreign and local currency issuer default rating. It cited concerns over the impact of lower oilprices and increased spending on the government deficit, which is expected to widen in 2015. Saudi Arabia's revenues are almost entirely dependent on the sale of oil.
On Dubai's main index, Dubai Investments and investment developer Union Properties lost 10 percent. Real estate developer Damac and construction company Arabtec both closed 9.6 percent lower, while another major developer, Emaar Properties, tumbled 8.3 percent.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.