Gulf may stabilize as global background improves

A 1.7-million barrel drop in U.S. stockpiles inched up oil prices in Asian trade

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Gulf stock markets may consolidate with a positive bias on Thursday after oil prices and global equities steadied on hopes that the devaluation of the Chinese yuan will slow.

Oil prices inched up in Asian trade on news of a 1.7-million barrel drop in U.S. stockpiles last week. A relatively bullish outlook by the International Energy Agency (IEA) on Wednesday also supported prices.

Asian shares also climbed, taking heart from a late recovery on Wall Street and from efforts by China’s central bank to slow the sharp descent of the yuan.

However, the latest batch of second-quarter results in the Gulf mostly showed declines in earnings.

Abu Dhabi National Energy Company (TAQA), the state-controlled oil explorer and power supplier, swung to a net loss of 421 million dirhams ($114.7 million) in the second quarter as revenues from oil and gas nearly halved. This compares with a net profit of 239 million dirhams in the same quarter of last year.

Oman Telecommunications Co (Omantel) posted a quarterly profit of 26.7 million rials ($69.4 million) on Thursday, according to Reuters calculations, against 31.6 million rials a year earlier. EFG Hermes and Gulf Baader Capital Markets had forecast it at 30.3 million and 29.2 million rials respectively.

Kuwait Food Co (Americana) posted a 46.2 percent fall in second-quarter net profit on Wednesday due to slower sales during the Muslim month of fasting and higher operating costs.

The operator of restaurant franchises in the Middle East including KFC made a net profit of 6.88 million dinars ($22.7 million) in the three-month period ending June 30, down from 12.80 million dinars in the prior-year period.