Middle East under surveillance as Omicron messes up recovery prospects

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DUBAI: Amid speculation about Omicron’s impact on oil demand, the Saudi Energy Minister said it was too early to say, adding that OPEC + was interested in monitoring the situation.

The group of oil producing countries has postponed its meeting to later this week to have more time to assess the impact, Prince Abdulaziz bin Salman told Arab News on Monday at an Aramco ceremony in Dhahran.

Previously, Russian Deputy Prime Minister Alexander Novak said there was “no need for emergency measures in the oil market”.

He added that the OPEC + partners had not called to review the current deal.

Oil prices rebounded on Monday after a huge slump last week led by fears over the new COVID-19 variant.

Brent crude oil futures rose $ 3.11, or 4.3 percent, to $ 75.83 a barrel to 0355 GMT, after falling $ 9.50 on Friday.

US crude West Texas Intermediate (WTI) rose $ 3.47, or 5.1 percent, to $ 71.62 a barrel after falling $ 10.24 in the previous session.

Oil prices slumped more than 10 percent on Friday, the biggest drop in a day since April 2020, as the new variant scared investors in the financial markets.

There are concerns that the new variant could undo the global economic recovery and potentially hurt oil demand, while it has also heightened concerns that excess supply could swell in the first quarter.

November 29th

Most Gulf stock markets ended lower on Sunday, with the Saudi Arabia and Dubai indices suffering their largest one-day decline in nearly two years as fears of a potentially vaccine-resistant variant of coronavirus frightened investors.

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The World Health Organization on Friday classified the variant of Omicron coronavirus discovered in South Africa as “worrying” – the fifth variant to receive this designation

Saudi Arabia’s benchmark index slipped 4.5 percent, dragged down from a 5.4 percent decline for Al Rajhi Bank and a 6.2 percent decline for Saudi Basic Industries.

The kingdom suspended flights to and from Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros on Sunday amid concerns about the spread of the new COVID-19 strain, state-run SPA news agency reported on Twitter.

Recent pandemic developments also saw oil prices, a major catalyst for Gulf financial markets, plummet by $ 10 a barrel on Friday, to see their largest one-day decline since April 2020. The new variant heightened concerns that an oil surplus could swell in the first quarter.

“It is evident that traders are concerned about the effects of the newly mutated virus that is bringing back the lockdown memories from last year. If Saudi Arabia decides to impose more restrictive measures, the economy will be seriously impacted and growth prospects for the next year will fade, ”said Mohammed Al-Suwayed, CEO of Razeen Capital. He said the time is now for investors to reinvest in the market as stock prices are relatively low.

Dubai’s top stock index was down 5.2 percent, the largest intraday decline since March 2020, with most stocks in negative territory.

Blue-chip developer Emaar Properties slumped 9.4 percent and low-cost airline Air Arabia fell 7.1 percent.

In Abu Dhabi, the index fell 1.8 percent, hurt by a 3.3 percent decline for telecommunications company Etisalat and a 1.4 percent decline for First Abu Dhabi Bank, the country’s largest lender.

The United Arab Emirates suspended entry for travelers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana and Mozambique from November 29 due to concerns about the new coronavirus variant, the state news agency reported on Friday.

In Qatar, the index slipped 2.8 percent as investors avoided stocks across the board, with petrochemicals Industries Qatar leading the losses.

Egypt’s blue chip index lost 1.3 percent, while leading lender Commercial International Bank fell 0.8 percent.

(With Reuters)



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