Overview:
Saudi Arabia's non-oil economy accelerated in September, marking its fastest expansion since February, while global crude oil prices edged lower despite Middle Eastern output remaining robust. Currency markets saw the US dollar strengthen against the euro, which hit a 17-month low, supported by elevated US Treasury yields. Local investment activity expanded with new real estate development initiatives and collaborative artificial intelligence infrastructure agreements announced.
Details:
The Saudi private non-oil sector expanded at its highest pace in seven months during September, according to the Purchasing Managers Index released by the Riyadh Bank. The acceleration reflects improved domestic demand and increased commercial sales momentum across the kingdom's service and manufacturing segments. This marks a notable recovery in activity following slower growth reported in preceding months.
Oil markets experienced modest downward pressure, with Brent crude trading near USD 100.28 per barrel. The decline occurred despite strong crude export volumes from the Middle East and a withdrawal of 100 million barrels from strategic reserves by Group of Seven nations, which together eased global supply concerns. Amin Al-Nasser, chief executive officer of Saudi Aramco, warned that global crude oil inventory levels remain at "concerning" and "precarious" levels, with restoration of reserves potentially requiring two years or longer.
Currency markets reflected broader economic dynamics, with the US dollar appreciating on the strength of American Treasury yields reaching multi-decade highs. The euro weakened to its lowest level in 17 months amid financial concerns in France and selling pressure on European bond markets. In domestic business developments, Dell Technologies and Aramco Digital signed a memorandum of understanding to accelerate adoption of industrial artificial intelligence across Saudi infrastructure projects. Additionally, Abdullah Al-Othaim for Investment launched a dedicated real estate development subsidiary with planned capital exceeding 16 billion riyals.
Outlook:
Investors are monitoring whether the non-oil sector's expansion momentum can sustain as seasonal demand patterns evolve and domestic credit conditions develop. Global crude inventory depletion and production constraints present a technical support level for oil prices, though geopolitical supply disruptions and international strategic reserve releases remain key variables affecting near-term price direction and export revenues.