Most stock markets in the Gulf ended higher on Monday tracking a rise in oil prices after a surprise announcement by OPEC+ to cut more production jolted markets.

The Organization of the Petroleum Exporting Countries and their allies including Russia shook markets by announcing further production target cuts of about 1.16 million barrels per day (bpd) on Sunday.

As a result, Goldman Sachs lowered its end-2023 production forecast for OPEC+ by 1.1 million bpd and raised its Brent price forecasts to $95 and $100 a barrel for 2023 and 2024, respectively.

Saudi Arabia’s benchmark index advanced 1.6%, buoyed by a 5.9% jump in Riyad Bank and a 1.2% increase in Retal Urban Development Co.

The kingdom said it would cut output by 500,000 bpd. The Saudi energy ministry said the country’s voluntary reduction was a precautionary measure aimed at supporting the stability of the oil market.

According to Ahmed Negm, head of market research MENA at XS.com, reopening of the Chinese economy could also uplift Saudi oil exports despite some lower-than-expected data on Chinese manufacturing.

Major Gulf markets rise, tracking oil prices

Dubai’s main share index finished 0.9% higher, with blue-chip developer Emaar Properties climbing 3.2%.

In Abu Dhabi, the index was up 0.8%.

The Qatari index leapt 2%, ending three sessions of losses, with the Gulf’s biggest lender Qatar National Bank, which ended 3.7% higher.

Outside the Gulf, Egypt’s blue-chip index gained 2.2%, as most of the stocks on the index were in positive territory including Commercial International Bank, which was up 1.9%.

The Central Bank of Egypt (CBE) raised its overnight interest rates by 200 basis points on Thursday following a meeting of its Monetary Policy Committee, saying it aimed to bring high inflation into check.

The central bank’s decision to raise interest rates could push the banking sector to the upside as profit margin could improve, said Negm.

“The move could also contribute to securing international investors’ interest as the institution takes steps to rein in the high inflation.”

======================================= SAUDI ARABIA    rose 1.6% to 10,807 ABU DHABI       up 0.8% to 9,501 DUBAI           added 0.9% to 3,437 QATAR           advanced 2% to 10,299 EGYPT           leapt 2.2% to 17,057 BAHRAIN         was flat at 1,889 OMAN            down 0.4% to 4,792 KUWAIT          lost 0.4% to 7,811=======================================