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MIDEAST STOCKS-Bigger-than-expected OPEC oil deal may continue to buoy Gulf
December 1, 2016 / 5:45 AM / a year ago

MIDEAST STOCKS-Bigger-than-expected OPEC oil deal may continue to buoy Gulf

DUBAI, Dec 1 (Reuters) - Gulf stock markets may remain firm on Thursday in response to news of OPEC’s first agreement on oil output cuts since 2008, which will be joined by Russia in an effort to prop up prices.

Expectations for the agreement boosted oil prices and Gulf bourses in late trade on Wednesday, with the Saudi stock index climbing 1.5 percent to 7,000 points.

Nevertheless, oil continued to rise after Gulf markets closed and the deal was announced; Brent crude is at a six-week high of $52.44 a barrel. The deal included bigger production cuts than many analysts had expected.

Saudi Arabia accepted particularly big cuts to production. That could hurt headline Saudi gross domestic product growth in coming quarters but higher oil prices may increase overall Saudi state revenues, helping the government ease austerity policies slightly and benefiting the economy.

The rise of the Saudi stock index on Wednesday confirmed a break of major technical resistance on its April peak of 6,876 points. That triggered a double bottom formed by this year’s lows and pointing up to around 8,400 points in the long term.

United Arab Emirates stock markets are closed on Thursday for a public holiday. (Reporting by Andrew Torchia)

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