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KUWAIT CITY – Kuwait and Iraq have agreed “in principle” on a deal to regulate production from the border oilfields that once caused conflict between the two Arab states, the Kuwaiti oil minister said Wednesday.

The deal follows technical negotiations between the two nations and “we have agreed in principle. Kuwait signed the deal and they (Iraq) will be signing it this or next week,” Sheikh Ahmad Abdullah Al-Sabah told reporters.

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JEDDAH – Moodys Investors Service has downgraded Bahrains local and foreign currency government bond ratings to A3 from A2. The outlook on these ratings is now stable.

The move was motivated, among others, by a gradual but significant rise in the breakeven oil price in the Bahraini budget over recent years. This, together with a relatively modest level of official financial assets, has led to a divergence between the governments fiscal flexibility and that of rating peers, it said.

As a result, reduced fiscal flexibility makes it more challenging potentially to meet contingent liabilities arising from Bahrains financial sector, which is relatively large compared with the governments resources, Moodys said.

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JEDDAH – GCC banks earnings in the second quarter of 2010 was considerably affected by the continuation of high provisions, said Global Investment House.

“While the top-line barely moved year-on-year, provisions grew by 5 percent year-on-year. Provisions, mostly emanating from loan defaults, shifted gears during the quarter under review, after taking a breather in first quarter of 2010, leading to a massive 48 percent quarter-on-quarter rise in second quarter of 2010,” it said.

It noted UAE stood out from its neighbors in the region given the fact that almost half the provisions taken in second quarter of 2010 came from its banks followed by Saudi Arabia, which contributed 23 percent to the provisions taken.

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PARIS – Global oil demand growth will inch higher over the rest of this year and into 2011, but any rise will be wiped out if the economy is weaker than forecast, the International Energy Agency (IEA) said on Wednesday.

Global demand for oil will exceed earlier estimates, even as the economic recovery slows next year, the Western countries energy watchdog said.

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JEDDAH – Saudi Arabias economic outlook for the second half of 2010 remains sound, despite uncertainty from the European debt crisis, as the government-financed infrastructure expansion gains momentum, Banque Saudi Fransi said in its report on Saudi economy for June.

The banks research team headed by chief economist Dr. John Sfakianakis forecast that the Kingdom would maintain its gross domestic product growth at 3.9 percent this year.

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JEDDAH – Saudi stocks ended higher on Monday, hitting a three-week high, on the back of higher oil prices and as local investors take advantage of low valuations, boosting several blue chips.

The Tadawul All Share Index (TASI) gained 1.24 percent to 6,340.03 points.

Oil prices on Monday rallied by 2 percent to above $75 a barrel, while European and Asian markets rose to their highest level in four weeks.

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KUWAIT/DOHA – Gulf oil ministers on Tuesday played down the slide in oil prices below $70 a barrel and said OPEC had no plans to call an emergency meeting to discuss supply policy.

US crude tumbled below $68 on Tuesday and has fallen by nearly $20 in three weeks on growing fears that Europes debt crisis would derail the global economic recovery.

The price is below the $70 to $80 range that top oil exporter Saudi Arabia and others in OPEC have said is fair for both producers and consumers.

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DOHA – An oil price below $70 a barrel is too low to encourage companies to invest in expensive projects to expand capacity, Qatars Energy Minister Abdullah Al-Attiyah said on Monday.

US crude fell to the lowest in more than three months on Monday, briefly dipping below $70 on concern over Europes debts, the weak euro and brimming US crude inventories.

Investment in new energy capacity worldwide must be maintained to avoid a supply crunch in the future, Attiyah told an industry event, but deep water drilling and other high-cost operations would be unprofitable at a price of less than $70.

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KUWAIT CITY – Kuwait Oil Minister Sheikh Ahmad Abdullah al-Sabah on Tuesday said the current oil price is “good” and that he expected it to remain within the $75-90 a barrel range.

“The oil price is good … I think it will remain in the range of $75-90 a barrel,” Sheikh Ahmad told reporters after opening a symposium on transparency in oil industries. The minister however warned against speculation and volatility in crude prices.

“We hope the increase in the oil price will remain within a reasonable range and that there wont be spikes like before,” he said.

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KUWAIT/NEW YORK – OPEC would make a decision on whether to boost output to calm oil prices if the market passed $100 a barrel, Kuwaits oil minister said on Thursday.

US crude traded around $85 a barrel on Thursday, a little above the $70 to $80 range that OPECs largest producer Saudi Arabia has said was fair for both consumers and producers.

“Above $100… we would take a decision in this regard,” Sheikh Ahmad Al-Abdullah Al-Sabah told reporters at Kuwaits parliament, when asked how high the producer group would allow prices to rise before acting.

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