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DUBAI, Dec 18 (Reuters) - Stock markets in the Gulf may start the week on positive footing after crude oil prices climbed back towards 17-month highs at the end of last week, but trading is expected to be modest.
Brent futures rose 2.2 percent to settle at $55.21 a barrel on Friday after Goldman Sachs boosted its price forecast for 2017 and producers showed signs of adhering to a global deal to reduce output.
Saudi Arabia's stock market might see some interest in the petrochemical sector, which ended last week on a weaker note.
However, volumes could continue to be relatively subdued as investors ready themselves for the 2017 budget announcement tat is expected later this month.
Many economists believe the financial health of the public sector is on the mend and private sector credit is also improving, helping to ease stock market investors' worries.
"The Saudi Arabian Monetary Authority has passed several measures to enhance liquidity in the domestic financial system, which has contributed to lowering the cost of funding," a note by Saudi's Jadwa Investment said.
In Qatar, the finance ministry said on Thursday the gas-rich Gulf state expected to post a budget deficit of 28.3 billion riyals ($7.8 billion) in 2017. They had projected a significantly higher deficit of 46.5 billion riyals in 2016.
The 2017 shortfall would continue to be covered by Qatari and international debt issues, Minister of Finance Ali Shareef al-Emadi said.
That could make investors in Doha feel at ease, with government efforts to narrow deficits starting to pay-off. The main index is still in negative territory for the year, down 2.0 percent.
In Dubai, the main index could recover slightly after it dropped back last week below major resistance on its August peak of 3,624 points, a negative technical signal. (Reporting by Celine Aswad; Editing by Andrew Torchia and Paul Tait)