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Saudi Arabian stocks rose to the highest level in four weeks, tracking gains across the U.S. and Europe last week, after the country’s oil minister said OPEC and other crude producers are working to stabilize the market.

The kingdom’s Tadawul All Share Index climbed 2.1 percent to 7,179.17, leading advances across most Middle Eastern markets. Dubai’s DFM General Index increased a second day to the highest in more than a week after the United Arab Emirates said it would invest more than $80 billion to diversify its economy away from oil.

Correlation between the Tadawul All Share Index and the price of Brent crude

Brent crude, a benchmark for half the world’s oil, last week posted its first weekly advance since October. Saudi Oil Minister Ali al-Naimi said Thursday the kingdom is working with producers to stabilize the market, while Matar al-Neyadi, the U.A.E.’s undersecretary of energy, said prices will improve next year. Economies across the six-nation Gulf Cooperation Council, which includes Saudi Arabia and the U.A.E., rely on energy income to fund most government spending, which drives economic growth.

"Saudi and U.A.E. officials speaking in support of OPEC strategy is giving comfort to the market," said Ramzi Sidani, a Dubai-based fund manager at Shuaa Capital PSC, which is overweight on consumer and retail names in Saudi Arabia. "We’re seeing a big recovery in the U.S. and Saudi Arabia is following the tracks."

Riyal Peg

A key currency indicator in Saudi Arabia last week signaled increasing bets that the country may reconsider its 30-year policy of pegging the riyal to the dollar. One-year forwards on the currency jumped on Thursday to their highest level since January 2003.

The peg has come under mounting pressure as oil’s slump weighs on the kingdom’s economy. Saudi Arabia may face a “critical" choice between adjusting the peg and cutting oil production, Bank of America Merrill Lynch strategists wrote in a Nov. 19 report. The forwards dropped the most in a month on Friday.

Global Rally

U.S. stocks on Friday capped their best weekly gain this year in a sign that markets are growing more comfortable with impending interest-rate increases. European stocks rose for a second day amid optimism that the European Central Bank will add to stimulus measures.

Dubai’s benchmark gauge gained 0.5 percent. The U.A.E. approved a 300 billion-dirham ($81.7 billion) investment plan to boost its knowledge economy, spanning sectors such as health, transportation and education.

The expenditure is part of the nation’s plan to diversify its economy away from crude, which accounts for about 30 percent of gross domestic product. The U.A.E. is home to almost 6 percent of the world’s proven oil reserves. While Brent crude closed 1.1 percent higher on Friday at $44.66 a barrel, it’s down 44 percent in the past 12 months.

“This 300 billion-dirham plan they announced will affect the whole country positively, not just Dubai," said Muhammad Shabbir, who manages about $550 million as the head of regional equities at Rasmala Investment Bank Ltd. in Dubai. “There’s some positive momentum from international equity markets on Friday.”

Dana Gas Ruling

Abu Dhabi’s ADX General Index slipped 0.2 percent as Emirates Telecommunications Group Co., or Etisalat, dropped 1.2 percent. About 68 million shares changed hands, or about half the 12-month daily average.

Dana Gas PJSC made up about a third of that volume, and was the most-traded stock. A court ruled the Kurdish government must pay the energy explorer and partners $100 million in two weeks. Dana Gas shares jumped 4.9 percent to 0.43 dirham.

Oman’s MSM 30 Index fell 0.2 percent, declining for the 13th day, the longest losing streak since 2012. Standard and Poor’s lowered the country’s credit rating on Friday, citing the drop in oil prices as it cut expectations for Oman’s gross domestic product and trade deficit.

Gauges in Kuwait and Bahrain rose 0.5 percent. Qatar’s QE Index fell 0.2 percent. Egyptian stocks added 0.6 percent, led by a 1.2 percent increase in the shares of Commercial International Bank Egypt SAE, the nation’s biggest listed lender.

Citadel Capital SAE, known as Qalaa Holdings, closed the sale of ASEX Minya Cement and ASEX Ready Mix for about 1 billion Egyptian pounds ($127.7 million). Qalaa retreated 0.6 percent.

Frutarom Record

Israel’s TA-25 Index gained 0.2 percent, led by Frutarom Industries Ltd. The company added 3.4 percent, extending the best performance on the gauge this year and trading at the highest on record for a second day.

The country’s parliament approved a two-year budget on Thursday, allowing Prime Minister Benjamin Netanyahu room to advance some of his cornerstone economic issues, including the policy governing Israel’s natural gas industry. The TA Oil & Gas Index rose 1.1 percent, led by Delek Drilling LP and Avner Oil Exploration LLP.

Space Communication Ltd. plunged 36 percent, the most since it listed in 2005 after the company said it lost contact with one of its satellites. The satellite is insured for $158 million.