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Middle East Daily
SOOJIN KIM
Research Analyst
DIFC Branch – Dubai
T: +44(4)387 5031
E: soojin.kim@ae.mufg.jp
MUFG Bank, Ltd. and MUFG Securities plc
A member of MUFG, a global financial group
Middle East Daily
COMMODITIES / ENERGY
Oil prices steady as supply disruption counters rising global oversupply fears. Oil prices steadied as markets balanced geopolitical supply risks against concerns over a looming global surplus, with Brent trading below USD64/b and WTI near USD60/b after their first back to back weekly gains since August. Traders focused on India’s continued purchases of Russian crude following President Putin’s pledge to ensure uninterrupted fuel shipments ahead of US-India trade talks, while Ukrainian attacks on Russian energy infrastructure, including the key CPC export terminal in the Black Sea, disrupted loadings and pushed up physical crude prices. At the same time, hopes for a potential Ukraine-Russia peace deal remained uncertain, with diplomatic tensions ongoing. These supply-side risks contrast with fears of a global oil glut, as rising production from OPEC+ and non-OPEC producers such as the US, Brazil, Guyana is expected to outpace subdued demand growth, with upcoming outlooks from the EIA, IEA, and OPEC set to provide further guidance on market direction.
Copper near record highs on supply tightness and US stockpiling demand. Copper hovered near record highs after touching USD11,705/t, as investors piled in on expectations of a sustained rally driven by US stockpiling, tight global supply, and widening supply-demand imbalances. Prices have risen more than 30% this year on the LME, supported by strong structural demand linked to electrification and the energy transition. The rally as intensified amid concerns that large volumes of copper are being diverted to the US ahead of potential import tariffs next year, draining inventories elsewhere and lifting premiums across key markets. Going forward, continued supply tightness alongside strategic stockpiling and energy-transition demand is likely to keep copper prices elevated and volatile.
MIDDLE EAST - CREDIT TRADING
End of day comment – 05 December 2025. What stood out though is the small inflows we have seen today from ETF side. That supported cash prices and with UST down spreads by and large closing 3bp tighter. Long end bonds are continuing to underperform in spread terms and saw again some modest net selling today. KSA/ARAMCO was active in the street in the 10y sector. QATAR/ADGB had a rather quiet day. In Quasis still seeing buyers of 5y area bonds led by ADGLXY 34s.
MIDDLE EAST - MACRO / MARKETS
Enhancing resilience to global shocks in the GCC. The IMF’s latest policy paper finds that GCC economies remain resilient despite heightened global uncertainty, benefiting from robust non-hydrogen growth driven by reform momentum, strong domestic demand, and large-scale project implementation, while the direct impact of trade tensions and US tariffs remains modest due to limited trade exposure and exemptions for energy products. The outlook is favourable as growth should accelerate with the unwinding of oil production cuts and expansion of natural gas output , though risks are titled to the downside from lower oil prices, tighter global financial conditions, and geopolitical tensions. Policy priorities focus on sustaining diversification through calibrated fiscal consolidation to ensure intergenerational equity and manage risks, maintaining effective currency-peg-based monetary frameworks while safeguarding financial stability via proactive macroprudential oversight.
Syria signals rapid economic rebound and financial rebuilding. Syria’s economy is growing far faster than the World Bank’s 1% projection for 2025, driven by the return of roughly 1.5 million refugees after the end of its 14-year civil war, prompting ambitious plans to rebuild its financial system and position the country as a regional financial hub for the Levant, according to the Central Bank governor AbdulKader Husrieh. Speaking at the Reuters NEXT conference, he said Syria is finalising a deal with Visa to establish modern digital payment networks, collaborating with the IMF to improve economic data measurement, and upgrading anti-money laundering and counter-terror financing regulations to restore credibility with international banks. He also expects most US sanctions to be fully repealed by the end of 2025, which he said would encourage correspondent banking ties to return. While reliable data remains limited, Husrieh cited lower inflation and a strengthening exchange rate as early indicators of recovery, underscoring optimism about Syria’s economic revival and reintegration into global financial market.
Egypt’s reserves hold steady with shift toward gold. Egypt’s net international reserves edged up slightly to USD50.2bn in November from USD50.1bn in October, signalling continued overall stability despite global financial pressures, while the composition of reserves shifted notably toward gold. Gold holdings jumped to USD17.2bn as the CBE increased its defensive buffer against volatility. The changes point to an internal rebalancing of reserve components rather than a deterioration in the total position, reinforcing confidence in Egypt’s external buffers and the CBE’s strategy of maintaining liquidity while strengthening resilience to external shocks.
