São Paulo – Equity markets across the Gulf continued to fall on Monday (9), taking losses to about USD 400 billion, according to story published on the website of The National newspaper from the United Arab Emirates at the end of the day in the country. Equity markets around the world saw declines at the beginning of this week due to fears of coronavirus and the oil price plunge.
The commodity’s prices were already down last week due to coronavirus, which could make the world economy slow down and affect the energy demand. To contain the plunge, the Organization of Petroleum Exporting Countries (OPEC) suggested a cut in production last week, but Saudi Arabia had conditioned the policy upon the participation of Russia, which did not happen. Russia is not a member of OPEC but is usually an ally of the group.
Without Russia’s support, Saudi Arabia announced a slump in Brent crude prices and an increase in production starting on April. When the production is large compared to consumption, prices fall. In turn, a decline in production causes prices to rise. Since their economy are tied to oil, the Gulf countries usually struggle with low oil prices. The petroleum had been posted declines since the the year begun.
Equity markets posted sharp fall across the Middle East last Sunday. This Monday, the plunge continued. The region’s bourse, Tadawul in Saudi Arabia, closed 7.8% lower. Major indexes fell in the UAE, Egypt and other Arab countries, too.
Translated by Guilherme Miranda
