June 25 (Bloomberg) -- Saudi shares rose, led by banks and cement companies, as the outlook for higher crude prices outweighed the decision by the International Energy Agency to release oil to the market.
Saudi Cement Co., the nation’s second-largest producer, rose for a fourth day, while Al Rajhi Bank, the kingdom’s biggest lender by market value, and Banque Saudi France also advanced. The 146-company Tadawul All Share Index -- the No. 1 bourse by market value in the Middle East -- rose 0.1 percent to 6,456.88 by the close in Riyadh, after declining 2.5 percent this year.
The IEA said June 23 that it will release 60 million barrels of oil in the next month after Libya’s supply was disrupted. The Paris-based agency’s decision also comes after the Organization of Petroleum Exporting Countries failed to agree on production increases at a June 8 meeting in Vienna.
“What we are looking at now is likely only a relatively short-term respite in the oil market,” said Jarmo Kotilaine, chief economist at Jeddah-based National Commercial Bank. “Only Saudi Arabia has any substantial spare capacity, but this is being eroded now by its internal demand and their decision to boost production.”
Crude oil for August delivery dropped 2 percent last week on the New York Mercantile Exchange. The contract rose 14 cents yesterday to $91.16 a barrel.
Saudi Arabia, the largest producer in OPEC, was in favor of raising output limits when the group met this month. Al-Hayat newspaper reported June 10 that the Middle Eastern nation will increase production to 10 million barrels a day next month, from about 9 million.
Al Rajhi Bank gained 0.4 percent to 72 riyals and Banque Saudi France rose 0.9 percent to 43.2 riyals, climbing for a fourth day. Saudi Cement jumped 2.4 percent, the most since May 22, to 63.5 riyals.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.
--Editors: Paul Armstrong, Reed Landberg
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