Saudi shares plummet on oil release decision

Saudi shares dropped, led by petrochemical companies and banks, after the International Energy Agency's decision to release oil to the market sent crude prices lower. Saudi Basic Industries, the world's biggest petrochemicals maker, and Samba Financial Group, the kingdom's second largest publicly traded lender, paced the losses. Saudi Industrial Investment Group, a petrochemical maker, and Saudi Kayan Petrochemical declined. The 146-company Tadawul All Share Index dropped 0.5 per cent to 6,415.60, the lowest intra-day level since June 21, in Riyadh. The region's largest bourse by market value has declined 3 per cent this year. IEA members, including the US and Germany, will release 60 million barrels of oil in the coming month in response to disruption of supply from Libya, the Paris-based agency said in a statement on June 23. The IEA move comes after the Organisation of Petroleum Exporting Countries failed to reach an accord on production increases at a June 8 meeting in Vienna. "Given the heavy weight that petrochemicals have in the Saudi market, the IEA decision will have an impact on share prices," Murad Ansari, an analyst at investment bank EFG-Hermes Holding, said in a telephone interview. "Any strong oil price change will get reflected in the market." Crude oil fell to a four-month low in London following the International Energy Agency's announcement. Brent crude oil for Aug-ust delivery dropped Friday $2.14, or two per cent, to $105.12 a barrel on the London-based ICE Futures Europe exchange, the lowest settlement price since February 18. From / Gulf News