By Mahmoud Shendi Al-Seyassah/Arab Times Staff KUWAIT CITY, Aug 29: In June, local banks’ financing for the oil and gas sector in Kuwait saw a substantial increase of 88.2 million dinars, or 17.6 percent, bringing the total to 88.7 million dinars. This rise marked a significant improvement from the 500,000 dinars recorded in May.

However, on an annual basis, financing for the sector decreased by 7.8 million dinars, or 8 percent, compared to June 2023, when it was 96.5 million dinars. Over the first six months of 2024, total financing for the sector amounted to approximately 760.8 million dinars. For both residents and non-residents, the total balance of local banks’ financing for the oil and gas sector decreased by about 100 million dinars in June, reaching 2.334 billion dinars.

This was down from 2.434 billion dinars in June 2023. The annual decline was even more pronounced, with the balance falling by 292 million dinars from 2.626 billion dinars in June 2023. Throughout 2023, oil and gas sector financing displayed considerable variability. It started at 78.8 million dinars in January, surged to 243.3 million dinars in February then dropped sharply to 61.2 million dinars before rising again to 159.2 million dinars in April.

The month of May saw a significant increase to 252.8 million dinars, followed by a decrease to 96.5 million dinars in June. Subsequent months continued to show fl uctuations -- July saw a rise to 80 million dinars, August peaked at 293 million dinars, September dropped to 6.2 million dinars, October climbed to 125.1 million dinars, November reached 269.7 million dinars, and December ended at 89.3 million dinars. In the broader context of monthly credit facilities provided by banks across all sectors, there was a 3 percent increase in the first half of 2024, totaling 12.067 billion dinars, up from 11.708 billion dinars in the same period of 2023. The credit facilities increased to 167.2 million dinars or 8.6 percent from May to June, reaching 2.099 billion dinars. However, this was an 11 percent decrease on an annual basis, down from 2.171 billion dinars in June 2023.

Personal facilities experienced a notable increase of 22 percent over the first six months of 2024, rising from 1.789 billion dinars to 2.185 billion dinars. Nonetheless, there was a 20.8 percent monthly decline in June, with personal facilities dropping from 443.7 million dinars in May to 351.1 million dinars. In recent developments, the balances of cash credit facilities (loans) with local banks increased by 4.2 percent from 53.557 billion dinars at the end of December to 55.8 billion dinars by the end of June.

This rise also represents a monthly increase of 0.9 percent, amounting to about 510.7 million dinars from 55.297 billion dinars at the end of May. On an annual basis, this figure is up by 5.3 percent from 52.983 billion dinars recorded in June 2023. Deposits in local banks also saw an increase during this period. They grew by 1.16 percent or 569.2 million dinars, rising from 48.727 billion dinars in December 2023 to 49.29 billion dinars in June. Annually, deposits increased by 3 percent, or 1.457 billion dinars, from 47.839 billion dinars in June 2023. In the oil market, prices continued to climb due to concerns over potential disruptions in regional oil supplies amid escalating tensions in the Middle East.

Additionally, expectations of US interest rate cuts have positively impacted global economic prospects and fuel demand. Brent crude futures rose to $80.02 per barrel, while US crude increased by $1 to $75.83 per barrel. Earlier in the day, Brent crude futures were up 37 cents, or 0.5 percent, reaching $79.39 per barrel, and US crude futures rose 36 cents, or 0.5 percent, to $75.19 per barrel. Market analysts are anticipating further price increases. Tony Sycamore from IG noted that Israel’s preemptive strike on Lebanon could lead to higher oil prices, with WTI potentially extending its recovery to $77.50 per barrel.