Saudi Arabian Stocks Slip to Lowest Since March as Oil Retreats

Shares in Saudi Arabia, OPEC’s biggest producer, dropped to the lowest level in more than eight months after oil entered its ninth week of decline.

The Tadawul All Share Index fell 2.8 percent to 9,289.55, its weakest level since March 6. The gauge was the second-worst performer among more than 90 indexes tracked globally by Bloomberg. Saudi Basic Industries Corp., among the world’s largest petrochemicals producers, retreated 2.8 percent to the lowest in more than a year.

Brent crude, the benchmark for more than half the world’s oil, lost 1.4 percent at 12:54 p.m. in London to $78.28 a barrel, near a four-year low. Saudi Arabia needs oil to average $99.2 a barrel this year to balance its budget, according to Deutsche Bank AG. Oil prices may keep sliding in coming months, mounting pressure on OPEC to cut production, the International Energy Agency said Nov. 14.

“The market is clearly being driven by oil prices and the potential structural change in oil-supply dynamics,” Ali Khan, chief executive officer of London-based BGR Asset Management LLP, said by e-mail. “Positive catalysts remain elusive on oil, and the same goes for the equities markets. Investors are worried and want to cash out to see how the oil price settles.”

The Tadawul’s 14-day relative strength index fell to 27.7, the lowest in a month. A level below 30 indicates to some investors a measure is undervalued.

Oil prices may slide further in coming months as demand slips by 1 percent to 92.6 million barrels a day in the first quarter from this quarter, the IEA said. The agency estimates that consumption grew in 2014 at the slowest pace in five years.

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