Opec Oil deal lifts markets

By Samuel Kutty — MUSCAT: Dec 4: While crude prices rose to their highest level in 16 months at the end of last week following the Opec deal, stock markets across the region opened trading on a strong footing on Sunday. Adding to optimism on the markets is the forthcoming oil producers’ meeting which will be attended by the Sultanate along with other non-Opec countries. The first trading day of the week on Sunday saw the Muscat Securities Market Index surging to close at 5,610 points. Dubai stocks were the biggest gainers across Gulf markets. “Oil climbed 15 per cent last week, creating a strong impact on investor sentiment. The positive momentum is expected to continue to have its sway on all markets,” said a financial analyst with a local bank.
Oil and Gas Minister Mohammad bin Hamad al Rumhy, while confirming the Sultanate’s attendance at the Opec meeting in Vienna on December 10, said on Sunday that he expects oil prices to rise and hover between $50 and $60 a barrel in 2017.
The price of Oman oil rose by $4.64 on Thursday to reach $49.71 at the Dubai Mercantile Exchange on Thursday. Brent crude futures posted their best week in at least five years on Friday, settling at $54.46 a barrel.
oil2Non-Opec countries are expected to agree to a production cut of another 600,000 barrels per day (bpd) at the meeting. The Opec had already agreed last week to reduce output by around 1.2 million bpd from January. “The rise in the crude prices is good news for Oman’s economy which is in the grip of mounting budget deficits,” said Fahd al Balushi, an analyst. 
At the same time, he said the Opec decision is bullish only for the first half of 2017 and bearish for the second half because higher prices are likely to bring back US oil faster to the market. The total fiscal deficit at the end of third quarter this year reached RO 4.552 billion as against RO 4.371 billion a month ago. According to the minister, the non-Opec producers’ current decision to cut between 3 and 4 per cent of their oil production is less than what Oman was ready to do.
Although he did not reveal up to what extent the country is prepared to cut, reports indicate that Oman is willing to cut production by 5 to 10 per cent. Oman’s crude oil production marginally fell by 0.86 per cent to 31.37 million barrels in October this year, according to the monthly report released by the Ministry of Oil and Gas. This is equivalent to 1,011,892 barrels per day.
Meanwhile, the Minister of Energy and Industry at the Office of the Prime Minister of Brunei in his speech presented the available investment opportunities in the Sultanate of Brunei. He pointed out that the meeting will enhance cooperation between the two sides as the oil price drop crisis requires the collaboration of all efforts and exchange of expertise and success stories to overcome the crisis.
The meeting started with a number of presentations. Glass Point Solar Company made a presentation or Mirror project for the generation of steam using solar energy in Amal oilfield of PDO. The Secretary General of Energy at the Office of Brunei prime Minister spoke on utilizing solar energy in power generation.
PDO made a presentation on its LEEN system which aims at reducing the waste from operation and identifying the practices that add value. The Brunei side then made a presentation on the Brunei viewpoint about oil price drop.
At the end of the day, the Omani and Brunei sides visited Gulf Mushroom Products Company SAOG at Al Rumais in the Wilayat of Barka.