Regional markets on Thursday were largely unaffected by oil breaching the US$50 a barrel mark for the first time in nearly seven months.
Falling US inventories and continuing supply concerns in Canada and Nigeria pushed Brent crude futures up, while in late trade dropping to $49.61, their highest level since November. West Texas Intermediate was at $49.52 a barrel on Thursday afternoon.
“We have been expecting prices to go to the 50s from the third quarter onwards, so this is very much in line with our views,” said Amrita Sen, the chief oil analyst at Energy Aspects.
“The rise in unplanned outages has accelerated the rebalancing process that had begun earlier in the year given the sharp declines in non-Opec supply, which is now down by more than 1 million barrels a day on a year-on-year basis.”
Such supply disruptions are likely to sustain prices at their current levels in the short to medium term, said Ms Sen.
The price rise to $50 a barrel had only a limited impact on global markets; in Asia, the Nikkei and Hang Seng closed barely higher, while the Euro Stoxx 50 was trading up just 0.2 per cent late on Thursday afternoon, at 3067.63.
In the Arabian Gulf, Saudi Arabia’s Tadawul All Share Index opened up 0.77 per cent but declined through the day, closing down 0.52 per cent at 6,482.48.
Saudi petrochemical stocks such as Sabic and National Petrochemical ended marginal higher, failing to offset losses by banking and industrial stocks.
Abu Dhabi’s headline index fell 0.12 per cent to 4,283.49, with energy shares enduring mixed fortunes.
Dana Gas jumped 1.89 per cent to 54 fils, while Taqa declined 1.64 per cent to 60 fils.
“Local equities no doubt have gone up [in the past days] due to crude prices being where they are,” said Sanyalak Manibhandu, the head of research at NBAD Securities in Abu Dhabi.
“At the same time there’s a realisation in the UAE that oil is still a long way from its break-even point of about $70 a barrel, and until then, government borrowing and fiscal consolidation will continue.”
In Dubai, the headline index closed 1.28 per cent higher at 3,351, thanks to a late gain by Emirates NBD.
The bank’s shares surged 3.53 per cent to Dh8.50 at the close, their highest level in a month.
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