Kuwaiti banks witness decline in oil and gas sector financing

US crude oil production declines in Jan

KUWAIT CITY, March 31: In January, local banks exhibited a reduction in their financing activities within the oil and gas sector, marking a decline of 5.4 million dinars compared to the previous month, a decrease of 6.3%. This brought the total financing for the sector to 79.1 million dinars, down from December’s figure of 84.5 million dinars. However, in a year-on-year comparison, there was a marginal increase of 0.3 million dinars from January 2023, when financing stood at 78.8 million dinars.

Simultaneously, the overall balance of local banks’ financing for the oil and gas sector experienced a modest uptick in January. It rose by approximately 31 million dinars, reaching a total of 2.544 billion dinars compared to 2.513 billion dinars in December. Yet, in a broader temporal perspective, this figure represented a decline of 88 million dinars from January 2023 when the balance stood at 2.632 billion dinars.

Throughout the course of 2023, financing within the oil and gas sector demonstrated significant fluctuations. Beginning at 78.8 million dinars in January, it peaked at 298.7 million dinars in May, only to decline to 169.1 million dinars in June before rising again to 274.3 million dinars in July.

Meanwhile, data from the US Energy Information Administration unveiled a notable 6% decrease in US crude oil production in January, down to 12.533 million barrels per day from December levels. This decline was particularly pronounced in Texas and North Dakota, with reductions of 5% and 13%, respectively. This downturn came after the states had achieved record production levels in November and December.