OPEC+ Succeeds in Banishing Short-Sellers With Surprise Oil Cut - Bloomberg

OPEC+ Succeeds in Banishing Short-Sellers With Surprise Oil Cut - Bloomberg

OPEC+ is winning its war against short-sellers.

The coalition led by Saudi Arabia said that last week’s shock decision to slash oil production was intended to punish speculators and deter them from making unwarranted wagers against crude prices. If that was the rationale, then the latest data show the group succeeded.

Money managers slashed short-positions in Brent crude by 29,118 contracts in the week to April 4, the sharpest drop since 2020, according to data from ICE Futures Europe. In percentage terms, last week’s 46% reduction is the biggest in data going back to 2011.

The Organization of Petroleum Exporting Countries and its allies pledged more than 1 million barrels a day of cutbacks starting in May after fears over banking turmoil and faltering economic growth led to a pile-up of short positions, dragging crude prices down to $70 a barrel last month.

The market promptly recovered, with futures trading near $84 a barrel in London on Tuesday. While the move drew criticism from Washington amid concerns over resurgent inflation, the higher price levels should help many OPEC+ nations cover government spending.

Fitch revises #Oman’s outlook to positive, affirms its rating at ‘BB’

Fitch revises Oman’s outlook to positive, affirms its rating at ‘BB’

Fitch Ratings has revised Oman’s outlook to positive from stable and affirmed the rating at ‘BB’, in a report issued today.

According to Fitch, the positive outlook reflects a significant reduction in Oman’s debt to GDP as a result of fiscal consolidation measures, high oil prices and the associated reduction of external liquidity risks.

The agency said that the measures taken by the government helped to contain public debt, stating that the debt to GDP fell from 61% at the end of 2021 to 40% at the end of 2022. Fitch now expects the public debt to decline to 37% at the end of 2024, compared to 48% previously projected by the agency in its report issued in August 2022.

Fitch forecasts a budget surplus of 2.3% of GDP and 0.1% in 2023 and 2024, respectively.

Fitch also projects Oman’s fiscal breakeven oil price to decline from 77 US Dollars per barrel in 2022 to 67 US Dollars per barrel in 2025, in light of ongoing fiscal measures and the implementation of the Medium Term Fiscal Plan (MTFP).

The agency expects non-oil sector growth of 2.3% in 2023, pointing out to the recovery of the construction sector after being affected by the COVID-19 pandemic.

Most Gulf markets track global shares higher | Reuters

Most Gulf markets track global shares higher | Reuters

Most stock markets in the Gulf ended higher on Tuesday, tracking a rise in global shares as traders held onto hope that interest rates will soon peak and fall later this year.

The Saudi bourse, however, extended losses on profit taking.

Dubai's main share index (.DFMGI) advanced 1%, buoyed by a 1.1% rise in top lender Emirates NBD (ENBD.DU) and a 1.2% increase in Dubai Electricity and Water Authority (DEWAA.DU) following shareholder approval to distribute a one-time special dividend of 3.34 fils per share.

The publication of improving business conditions figures in Dubai boosted the stock market. The local economy continued to progress month over month, providing suitable conditions for local stocks to thrive, said Farah Mourad, senior market analyst at XTB MENA.

"As a result, the main index could test this year's peak and could record new highs."

In Abu Dhabi, the index (.FTFADGI) added 0.1%. The Qatari index (.QSI) was up 0.4%, with Qatar Islamic Bank (QISB.QA) rising 1%.

Oil prices - a key catalyst for the Gulf's financial markets - steadied as Chinese inflation data pointed to persistently weak demand, but a softer dollar and hopes that the Federal Reserve might ease up on its policy tightening after a key U.S. inflation report this week provided support.

Saudi Arabia's benchmark index (.TASI) dropped 0.5%, weighed down by a 0.8% decrease in Retal Urban Development Co (4322.SE) and a 1.2% decline in Al Rajhi Bank (1120.SE).

According to Mourad, traders in the Saudi market fueled some price corrections after the main index surpassed its previous peak.

"However, the main index could return to the upside thanks to strong local fundamentals and a more positive sentiment among local investors."

Outside the Gulf, Egypt's blue-chip index (.EGX30) advanced 1.4%, as most of the stocks on the index were in positive territory including tobacco monopoly Eastern Company (EAST.CA), which was up 6.2%.

#Dubai’s non-oil business conditions improved at faster rate in March – PMI

Dubai’s non-oil business conditions improved at faster rate in March – PMI

Dubai’s non-oil sector grew at its fastest rate since September as companies built up capacity levels to support output expansion.

The headline index of the S&P Global Dubai Purchasing Mangers’ Index (PMI) increased do 55.5 in March, up from 54.1 in February, with any score above 50 indicating expansion.

However, companies surveyed said new orders rose to the least extent since January 2022.

The report said the index signalled a sharp improvement in non-oil business conditions, with the uptick supported by stronger growth in output, employment and stocks of purchases, alongside tighter supply side conditions.

Wholesale and retail growth reached a 14-month low, as that sector, along with travel and tourism lost momentum from their post-COVID peaks in 2022, the report said.

But, rising output meant that firms had a greater need to expand their business capacity in March.

Bullish Oil Bets Surge Most Since 2016 After Surprise OPEC+ Cut - Bloomberg

Bullish Oil Bets Surge Most Since 2016 After Surprise OPEC+ Cut - Bloomberg

Speculators ramped up their bullish bets on higher oil prices after OPEC+ jolted markets with a surprise production cut, posting the second-largest increase in net-wagers on record last week.

Net-long positions in Brent crude jumped by more than 73,000 contracts in the week to April 4, according to data from ICE Futures Europe. The only other time a bigger net-inflow occurred was in late-2016, which also followed unexpected output curbs from OPEC that ultimately led to the creation of OPEC+.

“We expect bullish capital flows to continue for the time being as the production cuts will drive storage draws,” Macquarie Group analysts including Vikas Dwivedi wrote in a note.

Brent surged as much as 8% after OPEC+ announced the round of output curbs of almost 1.7 million barrels a day, but prices struggled for further direction after the initial move last week. Futures were trading near $85 a barrel on Tuesday.

Ahli Bank in #Oman receives merger offer from Oman's Bank Dhofar | Reuters

Ahli Bank in Oman receives merger offer from Oman's Bank Dhofar | Reuters

Ahli Bank in Oman (ABOB.OM) said on Tuesday it received a non-binding offer from Oman's second-biggest lender Bank Dhofar (BKDB.OM) for a possible merger.

Ahli Bank, part owned by Bahrain's Ahli Bank, said in a bourse filing its board will review the offer and will update the market with any material developments.

Should they proceed with a merger, a combination could create a bank with more than $19 billion in assets.

Bank Dhofar has $11.2 billion in assets, while Ahli Bank in Oman has about $7.9 billion in assets, financial statements showed.

Last year, HSBC Bank Oman and local rival Sohar International Bank entered into a binding merger agreement, which was awarded approval from the central bank in February. The merger is expected to complete in the second half of this year.

#Oman repays $2.9 billion in loans in Q1 - finance ministry | Reuters

Oman repays $2.9 billion in loans in Q1 - finance ministry | Reuters

Oman repaid 1.1 billion rials ($2.86 billion) in loans in the first quarter, finance ministry figures show, bringing total public debt at the end of March to 16.6 billion rials.

Total debt was 17.7 billion rials at the end of 2022.

Oman, among the weaker economies of the Gulf region, repaid the debt through increased government revenue on the back of higher oil prices, the fiscal performance bulletin said.

Net oil revenue reached 1.15 billion rials at the end of February, up from 1.09 billion rials in the same period a year ago, as oil prices averaged $86 per barrel in the period over $81 per barrel at the end of February 2022.

Most Gulf markets track Asian shares, oil prices higher | Reuters

Most Gulf markets track Asian shares, oil prices higher | Reuters

Most major stock markets in the Gulf rose in early trade on Tuesday, in line with Asian shares and oil prices, although the Saudi index was on course to extend losses on profit-taking.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.44%, boosted by investor optimism that the region's central banks will continue to pause or end interest rate increase cycles, whatever action the U.S. Federal Reserve takes.

Dubai's main share index (.DFMGI) gained 0.6%, with blue-chip developer Emaar Properties (EMAR.DU) gaining 0.5% and top lender Emirates NBD (ENBD.DU) was up 0.8%.

Elsewhere, Dubai Electricity and Water Authority (DEWAA.DU) advanced 1.2% after shareholders approved distribution of a one-time special dividend of 3.34 fils per share.

In Abu Dhabi, the index (.FTFADGI) added 0.1%.

Oil prices - a key catalyst for the Gulf's financial markets - rose on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude stockpiles.

Saudi Arabia's benchmark index (.TASI), which touched its peak for the year, fell 0.3%. Al Rajhi Bank (1120.SE) dropped 0.8%, while Retal Urban Development Co (4322.SE) was down 0.3%.

Among other losers, Saudi Investment Bank (1030.SE) retreated 1.8% as the lender traded ex-dividend.

The Qatari index (.QSI) climbed 0.3%, on course to end four sessions of losses, led by a 0.9% rise in Commercial Bank (COMB.QA).