The Gulf Cooperation Council (GCC) markets experienced a sharp fall on November 30 in the wake of the decision by OPEC to maintain its daily output ceiling of 30 million barrels.
The cartel's decision was taken despite a major oversupply that caused oil prices to fall more than 35 percent, according to the latest report by Global Investment House (Global).
On the first trading day following the decision taken on November 27, Oman witnessed a sharp fall (-6.2 per cent), followed by Saudi Arabia (-4.8 per cent), Dubai (-4.7 per cent), Qatar (-4.3 per cent), Kuwait (-3.3 per cent), Abu Dhabi (-2.6 per cent) and Bahrain (-0.6 per cent), it said.
Subdued global economic conditions further add to the weak oil prices concerns for the regional markets. Even as the US is radiating indications of recovery, deteriorating economic conditions in other major regions is also weighing on major stock markets, the Global report noted.
Consumer prices in Europe advanced at its slowest pace in November, further deepening concerns of deflation in the continent. In addition, Japan's economy fell into recession posting contraction in the third quarter of this year.
Moreover, weakening fundamentals in the developing markets have added to the global woes.
Slowing growth of the Chinese economy on account of the slump in the property markets has raised concerns. As a result, China unexpectedly trimmed interest rates for fueling growth in the country. The US, not immune to the global economic conditions, is also expected to be partially impacted by the global slump, Global said.
However, long-term outlook of the GCC member states remains positive and would not be impacted much by the decline in oil price.
According to the International Energy Agency (IEA), global oil requirement is expected to rise 104 million barrel daily in 2040, as compared to the present 90 million mbd.