Saudi stocks rose the most in the Gulf, tracking a surge in oil prices after OPEC+ shocked the markets with a decision to keep supply in check. Aramco gained the most in five months.
The Tadawul All Share Index climbed as much as 1.4 percent, extending gains this year to 7.9 percent. Saudi Basic Industries, Saudi Aramco and Al Rajhi Bank contributed the most to the advance. Benchmarks in Abu Dhabi, Kuwait and Oman also rose, while those in Dubai and Bahrain slipped.
The OPEC+ decision represents a victory for the government in Riyadh, which has advocated for tighter curbs to keep prices supported. Oil, the kingdom’s biggest export, jumped last week to $69.36 per barrel in London, the highest since May 2019. Goldman Sachs Group Inc. raised its second- and third-quarter forecasts for Brent to $75 and $80 a barrel, respectively.
Saudi Aramco rose as much as 2.3 percent, the most since Sept. 2. Bank of America Corp. said the world’s largest oil company is “uniquely positioned” to meet potential resurgence of oil demand, and could generate close to $100 billion in free cash flow next year should bullish assumptions materialize.
Dividend upside is also seen as possible at higher oil prices and output “given Aramco’s stellar FCF generation,” analysts led by Karen Kostanian wrote in a note. Aramco will report 2020 earnings on March 21.
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