Impact of Crude Prices On Oil and Gas Stocks..

Kuwaiti economists have shared the view that the impact of changing crude prices, up or down, vary on the listed oil and gas stocks. They said that most of the listed oil and gas companies listed on the Boursa Kuwait, the Kuwait stock market, are not directly involved in dealing in the crude, but they offer logistics services, such as exploration or the complementary Industries.

The listed stocks respond positively to any rise of prices of the crude on the international market, and of course the increase of the Kuwaiti oil, which will be reflected on the state’s income, and consequently more spending for development projects, all for the benefit of the companies, they agreed in different interviews with KUNA.

Former CEO of Al-Arabi Financial Brokerage Co Maitham Al-Shakhs said yesterday that the listed companies would not be directly impacted since they are not in the crude trade. Their benefit from any increase or decrease in prices depends on the different between stocks, Al-Shakhs said.

No doubt all the companies at Boursa Kuwait will  interact positively with the jump in oil prices to about USD 5 over the past few days, Chairman of the National Industries Company Mohammed Al-Naqi told KUNA. Generally, the rise will affect their businesses, especially operational activities, he added, noting that it is natural that the effect would be the biggest on the oil and gas stocks.

This will be obvious in the budgets and the quarterly results of these companies, as well as the balance sheet by the end of the year, he noted. The rise or fall of crude prices affects sentiments of most investors and traders in markets of oil producer countries, like the Gulf region, especially small ones, Head of the Traders Society Mohammad Al-Tarrah told KUNA.

The oil industry is highly affected by demand or economic shrinkage, he said. Al-Tarrah explained that economic growth entails more consumption, which means rise in sales for these companies. The oil and gas companies listed at the Boursa Kuwait include Contracting and Marine Services Company, IKarus Petroleum Industries Company, Senergy Holding, Independent Petroleum Group, National Petroleum Services Company, the Energy House, Gulf Petroleum Investment, and Abar Burgan Co. for Well Drilling