Gains on global markets during the Eid al-Fitr holiday may give a boost to Gulf bourses on Sunday, although renewed concerns over oil oversupply may provide a counterweight in what may be light volumes after the holiday.
Markets in the Middle East were shut for at least two days last week to mark the end of the holy fasting month of Ramadan, and bourses in Qatar and Bahrain remain closed on Sunday.
Wall Street stocks rose on Friday, recovering all the losses sustained after Britain’s surprise vote last month to leave the European Union. Other stock markets also jumped after data showed U.S. job growth in June accelerated more rapidly than even the most optimistic forecasts.
The U.S. economy added 287,000 jobs last month, according to the Labor Department, smashing the consensus forecast of 175,000. It was the highest total in eight months and wiped out expectations that the Federal Reserve might act on U.S. interest rates in the coming months.
But concern about oversupply in the oil market resurfaced on Friday when data was published showing that the U.S. oil rig count gained for a fifth week in six, contributing to Brent crude oil’s biggest weekly fall in nearly six months.
The data led analysts to predict the near two-year slump in drilling has bottomed and production will start to edge up early next year.
Both main oil benchmarks were down nearly 8 percent for the week – the largest weekly slide for Brent since January and the biggest weekly drop for U.S. West Texas Intermediate since February.