Emirati Equities Diverge as Oil Prices Fall on Hormuz Flow Optimism
United Arab Emirates equities struggled to find direction on Wednesday as oil prices continued to trade lower amid hopes that shipping through the Strait of Hormuz would normalize soon.At the close of trading, the FTSE ADX General Index lost 0.312%, while the DFM General Index was up 0.116%."Oil prices continue to move lower as flows from the Persian Gulf start to recover. Price action suggests the market is assuming a rapid recovery in traffic through the Strait of Hormuz," ING said. "Vessel crossings increased in recent days, although they remain well below pre-war levels. Estimates suggest that roughly 6-7m b/d of oil moved through the strait in recent days, which is still far below pre-war flows of around 20m b/d. However, with pipeline diversions for Saudi Arabia and the UAE, we only need to see oil flows through the strait return to around 14m b/d for oil supply from the Persian Gulf to return to pre-war levels."On the economic calendar this week is the release of the US personal consumption expenditures price index data for May on Thursday. The data is the Federal Reserve's preferred measure of inflation and will provide investors with clues on future monetary policies.Back home, Abu Dhabi's Department of Health partnered with Biocom California to enhance connectivity between researchers, investors, and entrepreneurs and boost the growth of life sciences activities across both regions.Turning to corporate news, shares of Abu Dhabi Ports Co. (ADX:ADPORTS), d/b/a AD Ports Group, closed the session 1.03% in the red. The port and industrial zones developer boosted its equity stake in Global Feeder Shipping to 81%.Dubai-listed Etihad Energy (DFM:ETIHADENERGY) commenced the front-end engineering design process for its refinery development project in Fujairah, which aims to process naphtha into Euro 5-compliant gasoline. Shares of the maritime and shipping company closed the session 0.66% higher.
