Businesses return to growth in top three Arab economies

Bloomberg

Business activity in the Arab world’s three largest economies returned to growth, with Egypt seeing its first expansion in 14 months.
After a deterioration in August, the non-oil private sectors improved last month as companies adjusted to economic challenges of the global pandemic while governments eased restrictions put in place to stop the coronavirus.
A measure of non-oil private sector activity in the United Arab Emirates, Saudi Arabia and Egypt rise last month above the threshold of 50 that separates growth from contraction, according to Purchasing Managers’ Index (PMI) surveys compiled by IHS Markit.
The headline reading for the UAE climbed to 51 in September from 49.4, with business conditions improving for third time in four months and Saudi Arabia’s PMI had its first monthly expansion since February, advancing to 50.7 from 48.8.
The IHS Markit Egypt PMI rises to 50.4 from 49.4 in August as consumer demand and export sales rebounded.
“The latest Egypt PMI data offered more optimism for businesses,” said David Owen, economist at IHS Markit. “The non-oil economy is seeing a modest turnaround after the devastating impact of the Covid-19 pandemic.”
Meanwhile, oil rises from a three-week low after a member of Donald Trump’s medical team said the US president could leave hospital, despite contradictory accounts about his health.
Futures advanced as much as 3.7% in New York, mirroring a broader relief rally in stock markets, after the biggest weekly drop since June.
“Oil is bouncing back as risk sentiment is recovering,” said Jens Pedersen, senior analyst at Danske Bank. “Weak fundamentals, in particular in light of rising Opec+ output amid weak demand, will limit the extent to which oil prices rally.”

Meanwhile, a strike in Norway has cut about 330,000 barrels a day of production, though the country’s largest field is continuing to pump. Eqiunor ASA is shutting down four North Sea fields after employers and employees failed to find common ground on a wage deal.
The recent bout of price weakness has pushed Brent oil back to near $40, with a resurgence of the coronavirus in some major economies raising concerns about a sustained recovery in consumption. As a result, speculators have shunned the global benchmark, with outright long positions falling to a six-month low last week. All the while, Libyan output rises to about 300,000 barrels a day as the country’s fledgling output recovery continues.