December 24 (Reuters) - Most Gulf stock markets declined on Wednesday in thin trading despite rising oil prices, which are on track for their biggest annual drop since 2020.

Oil prices, a catalyst for Gulf financial markets, rose for a sixth day, supported by strong US economic growth and concerns about disruptions to oil supplies from Venezuela and Russia.

The main Saudi stock market index fell 0.5 percent, ending a four-day winning streak, with Al Rajhi Bank shares down 0.9 percent.

Milad Azar, market analyst at XTB for the Middle East and North Africa, said that negative sentiment dominated the session, leading to a decline in most sectors.

He added, "Although the recent recovery in oil prices and expectations that the Federal Reserve will cut interest rates twice in 2026 initially boosted sentiment, concerns about a glut of crude oil could continue to weigh on the market."

Dubai's main index closed flat, while Abu Dhabi's main index closed down 0.2 percent.

The Qatari index rose 0.1 percent, and shares of Qatar National Bank, the largest lender in the Gulf region by assets, rose 0.5 percent.

US economic data showed that the world's largest economy achieved its strongest growth in two years during the third quarter, thanks to strong consumer spending and a significant recovery in exports.

The data reinforced expectations that the Federal Reserve (the US central bank) will not cut interest rates at its meeting in late January.

US interest rate futures currently anticipate the Federal Reserve will make its first interest rate cut in June, followed by two expected 25-basis-point cuts during 2026.

Monetary policy decisions in the United States have a significant impact on Gulf markets, as most of the region's currencies are pegged to the dollar.

Bahrain's index fell 0.1 percent to 2,064 points, and Oman's index declined 0.1 percent to 5,945 points.

Kuwait's index lost 0.3 percent to 9,579 points.

Outside the Gulf region, Egypt's blue-chip index rose 0.2 percent, supported by a 0.9 percent gain in Commercial International Bank shares.

The International Monetary Fund said on Tuesday that it had reached a staff-level agreement with Egypt on the fifth and sixth reviews under the Fund’s Extended Fund Facility program, paving the way for the disbursement of about $2.5 billion under the program.

(Prepared by Badour Al-Saoudi for the Arabic Bulletin - Edited by Ali Khafaji)