Extended losses: Gulf markets slide as oil plunges below $55

Published January 6th, 2015 - 04:55 GMT

Gulf stock markets extended their decline on Monday after the price of Brent crude fell below $56 per barrel.

Brent futures hit a fresh 5-1/2-year low of $55.36 on Monday as worries about a surplus of global supplies amid weak demand continued to drag on oil markets.

Although Saudi Arabia, Dubai and Oman have already announced large state budgets, suggesting that lower oil revenues will not translate into spending cuts, crude prices continue to affect the sentiment of retail investors who dominate local markets.

Saudi stock benchmark Tadawul All Share Index fell 2.99 percent to close at 8,106.8 on Monday, with all sectoral indices in the red.

Insurance and Petrochemical Industries incurred the biggest losses at 4.59 percent and 4.35 percent, respectively.

Dubai’s index dropped 3.3 percent as all but a handful of stocks fell. Bahrain’s Gulf Finance House (GFH) was one of the few gainers, surging 5.1 percent after the company said it had won a $11.5 million legal case pertaining to its investment in a Qatari firm.

Abu Dhabi’s index edged down 0.6 percent as Aldar Properties, the emirate’s biggest listed developer, dropped 4.4 percent.

Qatar’s bourse lost 1.9 percent in a broad sell-off, while Oman and Kuwait inched down 0.1 percent each.

Brent crude oil fell below $55 a barrel for the first time since May 2009 as record supplies from Iraq and Russia bolstered speculation the global glut that drove crude into a bear market will persist.

Futures slid as much as 2.8 percent in London, extending a loss of 5.1 percent last week.

Iraq plans to boost crude exports to a record this month, the Oil Ministry said. Russia’s output rose to a post-Soviet high in December.

Brent for February settlement declined as much as $1.70 to $54.72 a barrel on the London-based ICE Futures Europe exchange in London, the lowest since May 6, 2009.

It was at $54.74 as of 12:17 p.m. London time. WTI for February delivery dropped as much as $1.38, or 2.6 percent, to $51.31 a barrel in electronic trading on the New York Mercantile Exchange.

That’s the lowest level for the US benchmark since May 1, 2009.

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