Rallying oil prices and positive corporate news boosted Gulf equity markets on Tuesday, although consumer stocks in Saudi Arabia pulled back after gaining strongly earlier in the week.

Brent crude traded above $56, having gained more than 15 per cent since Thursday after data showed the number of US drilling rigs had fallen sharply.

The main Saudi stock index edged up 0.2 per cent as leading petrochemical producer Saudi Basic Industries climbed 1.1 per cent and its affiliate Saudi Kayan Petrochemical Company jumped 2.4 per cent.

"The profitability of the Mena petrochemical producers which benefit from advantageous feedstock pricing will continue to be highly correlated to oil prices," NBK Capital wrote in a report.

The brokerage said Kayan was most sensitive to a potential increase in oil prices: an average price of $75 per barrel would lift its earnings per share by a quarter compared with a $65-per-barrel scenario.

Meanwhile, consumer stocks such as Jarir Marketing and United Electronics, down 2.6 per cent and 1.1 per cent respectively, pulled back after surging in the previous two sessions.

The sector had risen after the King Salman ordered a big cash handout to Saudi state employees and some large companies also said they would pay out hundreds of millions of dollars in bonuses to mark Salman's accession. Much of the money is expected to be spent on consumer goods.

A purchasing managers' survey released on Tuesday showed the Saudi non-oil sector still growing strongly in January, with no significant impact from last year's plunge in oil prices.

Dubai's index jumped 2.5 per cent in a broad rally. Builder Arabtec surged 3.7 per cent after announcing it had won contracts worth Dh375 million ($102 million) from developer Emaar Properties. Shares in Emaar surged 4.8 per cent.

Rival developer Damac soared its daily 15 per cent limit, extending gains after posting a 46 per cent surge in 2014 profit on Monday. The stock, which had previously traded only in London and cross-listed in Dubai on Jan. 12, had plunged 36 per cent last month on the emirate's bourse.

Bourse operator Dubai Financial Market (DFM) jumped 2.4 per cent. Its fourth-quarter net profit increased 31 per cent to Dh138.2 million, Reuters calculated using company figures. Global Investment House had forecast DFM would make a quarterly profit of Dh120 million.

Abu Dhabi's index added 1.4 per cent. Dana Gas surged 4.3 per cent ahead of a board meeting on Wednesday that will review its financial results.

The January PMI for the United Arab Emirates showed private sector growth actually accelerating despite low oil prices.

Qatar's bourse rose 1.3 per cent as Gulf International Services surged 5.8 per cent after its annual profit more than doubled and it proposed a SR5.5 dividend for 2014, up from SR1.6 a year earlier. Analysts had forecast the 2014 dividend at SR3.35 riyals.

In Egypt, the economic news was not as good; the January PMI showed the non-oil private sector shrank for the first time since last July as both output and new orders fell slightly.

But Egypt's bourse rose 1.3 per cent on Tuesday to 9,954 points, a fresh 6-1/2-year high, ahead of earnings reports which companies will begin publishing next week.

Lower oil prices have eased the pressure on the country's fiscal and trade deficits, allowing the central bank to begin a gradual depreciation of the pound which may eliminate the black market and improve the economy's competitiveness.-Reuters