Saudi shares climbed to a new record high on Sunday, driven by surging oil prices and expectations of strong first quarter corporate results, analysts said. The official share index closed its morning session at 8,981 points, a gain of 0.53 percent on Saturday's close. It had risen as high as 8,986 during Sunday morning trade. "This is a fundamental reaction to the expected increase in corporate profits for the first quarter (of 2005), particularly in the petrochemical sector," said Bishr Bakheet of Bakheet Financial Advisors.

Bakheet added the increasing price of oil also helped push the market to a fresh high.

Saudi Arabia's economy has benefited greatly from high oil prices, even more so after US crude oil prices last week again passed the $50 a barrel mark.

"The Saudi market is 100 percent dependent on the trend in oil prices at the moment," said investment analyst Riyad Murad.

Copyright Reuters, 2005