Most Gulf markets ease despite firmer oil prices

Most stock markets in the Gulf eased on Wednesday in thin trade, despite firmer oil prices, although crude is on track for its largest annual decline since 2020.

Oil prices, a catalyst for the Gulf’s financial markets, rose for a sixth day, supported by robust U.S. growth data and the risk of supply disruptions from Venezuela and Russia.

Saudi Arabia’s benchmark index dropped 0.5%, snapping four sessions of gains, with Al Rajhi Bank losing 0.9%.

Negative sentiment dominated the session, resulting in declines across most sectors, said XTB MENA analyst Milad Azar.

“Although the recent rebound in oil prices and expectations of two Federal Reserve rate cuts in 2026 initially boosted sentiment, crude oversupply concerns could continue to weigh on the market,” Azar said.

Dubai’s main share index finished flat, while Abu Dhabi’s index ended down 0.2%.

The Qatari benchmark edged 0.1% higher, with Qatar National Bank , the Gulf’s biggest lender by assets, up 0.5%.

U.S. economic data showed the world’s largest economy recorded its strongest growth in two years during the third quarter, driven by solid consumer spending and a significant recovery in exports.

The report reinforced expectations that the Federal Reserve will not cut interest rates at its late-January meeting.

U.S. interest rate futures are now pricing in the Fed’s first 2026 rate cut for June, with two 25-basis-point reductions anticipated for the whole of the year.

Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

Outside the Gulf, Egypt’s blue-chip index was up 0.2%, with Commercial International Bank gaining 0.9%.

On Tuesday, the International Monetary Fund said it had reached a staff-level agreement with Egypt on the fifth and sixth reviews of its Extended Fund Facility, a step that could pave the way for about $2.5 billion in programme disbursements.