Oil prices may rise up to $50pb in Q1: Analyst
Unstable oil prices haunted KSE in January
LONDON: Oil prices could rise between $40-50 per barrel by the end of the first quarter of this year, Kamel Al-Harami, an oil analyst said. He attributed the rise in oil prices that reached $34.15 pb on Friday to Russia’s positive stance seeking to consult with key oil producers across the globe including OPEC member states in this regard. Russian Minister of Energy announced on Thursday that his country is ready for participating in the coming OPEC meeting due in February, welcoming consultations on the possibility of cutting output by five percent in order to address the decline in oil prices.
Understanding between Russia and Saudi Arabia, which is expected to be developed clearly in the coming period, will have a positive impact on oil prices, Al-Harami told KUNA in an interview, expecting that oil prices will rise by the end of first quarter of this year to $40pb.
Al-Harami defended the decision taken by Saudi Arabia and all GCC member states for not cutting oil production, saying “the Gulf stance was clear since November, 2014, which called for coordination among OPEC and non-OPEC producers to decrease production so as to stop the continued low prices.” He noted that surplus production of all oil producing countries, in particular non-OPEC countries like Russia, led to a decline in oil prices.
Oil markets need coordination between OPEC and non-OPEC producers, mainly Russia, to maintain prices between $40-50 pb, he said.
He stressed the necessity of cooperation among all oil producing countries to address cheap oil, including shale oil, offshore oil and oil from Siberia, which are excavated at high prices.
He affirmed that oil prices will not rise to $100 pb during the next decade for many causes, mainly a slowdown in global growth and economic problems facing Europe. He urged Russia, as a major oil producer, to work with Saudi Arabia so as to find a possibility to cut production to help all producers obtain satisfactory prices. Russian Foreign Minister Sergei Lavrov will visit UAE and Oman in the beginning of February to discuss some issues, including the situation of oil markets.
Market impacted
Kuwait Stock Exchange (KSE) in January was drastically affected with control of companies with cheap shares over performance, fluctuation in oil prices and expectation of data of companies in the last quarter of 2015, said two Kuwaiti analysts. Selling pressures were present in all sessions during January, negatively affecting the sectors’ indicators, the analysts told KUNA on Sunday, in two separate interviews. Pressures the market suffered from during January’s trading were caused by reluctance of many dealers to get into selling orders so as to avoid losses, Mohammad Al-Tarrah said, adding as a result, the price index went down to 5, 000 points in some sessions.
Many managers of financial portfolios turned to shares, below 50 fils, as they had attractive prices and had become an opportunity for all that may not be provided next month, when companies would announce their financial results in the last quarter of last year, he said.
On his part, Hamad Al-Hajri, said small dealers will follow up in February on movement of major groups to imitate them in a bid to compensate some losses in the last quarter of last year, due to decline in oil prices. Phycology of many dealers controls their decisions in the market, he said, urging key investment groups to support performance, instead of helping their companies make gains.
KSE ended trading yesterday in the green zone. The price index was up by 104.13 points to reach 5,114.52 points, the weighted index also went up by 8. 56 points to stand at 353.43 points, as well as the KSX 15 which increased by 20.12 points, to read 829.8 points. Trade value was KD 25.3 million while the volume was at 286 million shares, done through 6,433 deals. — KUNA KUWAIT: The exchange rate of the US dollar against the Kuwaiti dinar rose yesterday exchanging at KD 0.303, the euro was at KD 0.328 compared to the exchange rates for last Thursday, said a statement by the Central Bank of Kuwait (CBK). According to the CBK, the exchange rate of the Sterling pound was stable at KD 0.431 while the Swiss franc was at KD 0.296. Exchange rate of the Japanese Yen remained the same at KD 0.002. DUBAI: Oman’s Al Anwar Holding said yesterday its board had approved a proposal to sell a stake in its affiliate Falcon Insurance for 1.2 times book value. The transaction, which the diversified holding company said on Jan. 13 had been proposed by an “interested party” through Oman Arab Bank, is subject to the completion of due diligence and regulatory approvals, according to a bourse filing. Al Anwar, which holds 51 percent of Falcon Insurance, had said in June that it was planning an initial public offer of shares in the insurer. Yesterday’s statement did not make clear whether Al Anwar would sell its entire stake or only part of it, or who the buyer would be. Falcon Insurance was one of five companies due to list on the Oman stock exchange in 2016, the head of the market regulator was quoted as saying by a local newspaper earlier this month. DUBAI: United Arab Emirates-based Dana Gas said on Sunday that a gas pipeline between power plants in the Kurdistan region of Iraq had ruptured, interrupting supply from its Khor Mor gas plant. The Jan 29 rupture between the Chemchemal and Erbil power stations meant the Khor Mor plant was offline for a few hours, and Chemchemal was operating at around 50 percent of its production capacity, Dana Gas said in a filing to the Abu Dhabi stock market. No injuries were reported because of the incident and repair work was underway, with a target of restoring full production levels at Khor Mor within one week, the statement added. The pipeline, which supplies gas used to generate around half the electricity in Iraq’s Kurdistan region, was blown up on Friday, knocking out power, a police chief and electricity official told Reuters at the time.