Energy News Beat Publishers Note: Great Job Saudi Arabia for taking the lead on the OPEC + decisions. Showing again that Saudi Arabia is in the Oil market for the long haul.
Saudi stocks rose the most in the Gulf, tracking a surge in oil prices after OPEC+ shocked markets with a decision to keep supply in check. Saudi Aramco saw the biggest gain in six months.
The Tadawul All Share Index climbed as much as 1.4%, trimming the increase to 1.2% at the close. Saudi Aramco, Al Rajhi Bank and Saudi Basic Industries were the biggest contributors to the advance. Benchmarks in Kuwait, Oman and Bahrain also rose, while those in United Arab Emirates slipped.
The OPEC+ decision represents a victory for the government in Riyadh, which has advocated for tighter curbs to support prices. 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%, 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.
Higher dividends are also possible on account of rising oil prices and increased output, “given Aramco’s stellar FCF generation,” analysts led by Karen Kostanian wrote in a note. Aramco will report 2020 earnings on March 21.