Local bank facilities for oil & gas sector drop 61% in April

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KUWAIT CITY, June 4: Local banks’ facilities to the oil and gas sector for residents declined in April by approximately 165.2 million dinars, or 61%, dropping to 105 million dinars from 271 million dinars in March. Annually, financing for the sector decreased by 53.4 million dinars, or 33.5%, compared to 159.2 million dinars in April 2023. Total bank financing for the sector in the first four months of 2024 reached about 671.6 million dinars.

The total balance of local banks’ financing for the oil and gas sector, including residents and non-residents, increased in April by about 131 million dinars, reaching 2.442 billion dinars, compared to 2.573 billion dinars in March 2023. However, the annual balance of financing decreased by 172 million dinars compared to 2.614 billion dinars in April 2023. Financing for the oil and gas sector varied throughout 2023, starting at 78.8 million dinars in January, rising to 243.3 million dinars in February, then sharply declining to 61.2 million dinars. It reached 159.2 million dinars in April, rose significantly to 252.8 million dinars in May, fell to 96.5 million dinars in June, reached 80 million dinars in July, and jumped to 293 million dinars in August.

Private sector deposits in local banks in dinars rose by 0.8% in April to 36.5 billion dinars (about 119.1 billion dollars), while private sector deposits in foreign currencies increased by 0.9% to 1.9 billion dinars (about 6.1 billion dollars). Government deposits in banks declined by 32 million dinars in April, reaching 4.616 billion dinars, compared to 4.648 billion dinars in March. The total balances of local banks’ demands on the Central Bank in dinars, represented by Central Bank bonds, stabilized at 3.3 billion dinars (about 11 billion dollars). Statistics indicated that the total assets of local banks slightly increased by 0.2% in April to 87.8 billion dinars (about 286 billion dollars), while the net foreign assets of local banks decreased by 7% to 12.7 billion dinars (about 41.4 billion dollars).

The total balance of credit facilities for residents and non-residents increased by 352 million dinars, reaching 54.873 billion dinars in April, compared to 54.521 billion dinars in March. Oil prices fell on Friday, recording a weekly loss as investors focused on the upcoming OPEC+ meeting on Sunday to decide on production levels. Brent crude futures for July delivery fell by 24 cents, or 0.3%, to $81.62 a barrel, while August futures fell by 77 cents, or 0.8%, to $81.11. US West Texas Intermediate crude futures fell by 92 cents, or 1.2%, to $76.99, according to Reuters. Brent crude fell by 0.6% over the week, with a monthly loss of 5.2%, while West Texas Intermediate crude lost 1% during the week and about 5.3% in May. Markets are awaiting the OPEC+ alliance meeting on Sunday, where sources told Reuters that the OPEC+ alliance is drafting a complex agreement to extend some of the sharp cuts in oil production until 2025.

By Mahmoud Shendi
Al-Seyassah/Arab Times Staff

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