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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
Supply risks jolt oil higher despite growing glut signals. Oil jumped as rising risks to Russian supply temporarily outweighed growing signs of a global glut, with Brent briefly surging above USD64/b before easing back. The spike followed a major Ukraine drone strike that damaged an oil depot and vessel at Novorossiysk, a critical export hub for Russian and Kazakh crude. Despite the rally, Brent remains about 14% lower this year as OPEC+ members restore idled capacity and non-OPEC producers lift output, reinforcing expectations of an oversupplied market. The IEA again raised its surplus projections after OPEC+ acknowledged supply exceeded demand in Q3, while US inventories posted a sizable build and WTI’s prompt spread briefly slipped into contango, both signalling loose conditions. Markets also kept an eye on Venezuela amid rising geopolitical tension, yet the broader backdrop remains dominated by concerns that swelling supply will outpace demand in the months ahead.
Gold heads for best week in a month amid data uncertainty. Gold climbed above USD4,200/oz today and is heading for its strongest week in a month as markets navigate uncertainty from a large backlog of economic data following the end of the six-week US government shutdown. Expectations for another US rate cut continue to support the metal, while silver also rallied, rising more than 10% this week toward its record high. Gold remains up nearly 60% this year, fuelled by heavy central bank buying and investor demand for protection against fiscal risks. Additional support comes from the prospect of the Fed injecting more liquidity, with balance sheet runoff scheduled to end on December 1. Still, the outlook for another rate cut in uncertain, as Fed officials offered mixed signals this week and traders have trimmed the odds of a December cut to around 50%.
MIDDLE EAST - CREDIT TRADING
End of day comment – 13 November 2025. GCC markets have a softer feel into the close. But price stickiness still prevailed overall and combined with higher UST yields spreads still closed tighter on the day. That said flows which have been reasonably balanced throughout most of the day have turned in the last 1/2 hours driven by international RM selling. Activity overall is low though. I cannot remember a day where for example so little ADGB and QATAR long end bonds traded, closing prices unch/0.125pt lower and spreads 2/3bp tighter for this part of the curve. The quasi space was busier and risk off flows slowly having an impact on prices/spreads. Seen sellers mostly in the AD complex, where the likes of ABDPOC, ADGLXY, ADNOCM, ADQABU and MUBAUH saw late afternoon selling bring prices down 0.125/0.25pt in the belly and spreads back to unch on the day. In the fins space overnight new issuance had a lukewarm reception. BOSUH 30s saw early trades above reoffer but fell back to close just wrapped around it. DIBUH 30s had sellers from the start and closed 99.75/875 from 100.00 reoffer. New FABUH long 5y EUR will price at MS+70bp in 850mm, on the back of it seen selling in QNBK 30s EUR which is trading MS+75bp on the bid side.
MIDDLE EAST - MACRO / MARKETS
Saudi inflation holds steady in October. Saudi Arabia’s consumer inflation remained stable in October, with the annual CPI holding at 2.2%, unchanged from September, according to GASTAT. The reading reflects a period of price stability driven by easing food inflation and steady housing and utilities costs, suggesting that domestic demand pressure remain contained. Core components showed minimal movement, reinforcing the view that Saudi Arabia’s inflation trajectory is staying aligned with policymakers’ expectations as the non-oil economy continues to expand at a moderate pace. Meanwhile, Crown Prince Mohammed bin Salman is preparing for a high profile visit to Washington for talks with President Trump, where both sides aim to deepen economic cooperation across defence, technology, and investment, signalling KSA’s continued push to anchor its Vision 2030 transformation in a stronger US partnership.
Syria moves toward economic normalisation with IMF talks. Syria took a major step toward re-engaging with the global financial system as the IMF sent a mission to Damascus this week to discuss the new government’s reform priorities and technical assistance needs, marking progress toward the country’s first Article IV consultation in 15 years. The visit coincided with President Ahmad Al Shara’s historic trip to Washington D.C, where he met IMF managing Director Kristalina Georgieva and US President Trump. The IMF emphasised that Syria requires extensive international support to rebuild its economy and restore institutions, with the World Bank estimating reconstruction costs at USD216bn. So far, Syria has attracted about USD41bn in foreign investment, notably from Gulf states, and is now working with the US and IMF on a one-year compliance strategy to address money-laundering and terrorism-financing concerns. Syria officials have also begun reappearing at major global economic forums, including the IMF-World Bank meetings, signalling the country’s most significant push yet to draw foreign capital and reintegrate into global markets.
