DUBAI- Gulf sovereign bonds rallied on Wednesday, particularly those with longer maturities, boosted by a recovery in oil prices over the past month as demand improved.

Saudi dollar bonds maturing in 2060 gained 2.3 cents to trade at 109.7 cents on the dollar. Abu Dhabi bonds due in 2050 were up 1.4 cents to trade at 112.8 cents on the dollar, Refinitiv data showed. Qatari government bonds also rallied, while Omani and Bahraini notes saw small changes.

Three fund managers said the recovery in oil prices helped lift the hydrocarbon-dependent region's debt markets, which also posted strong gains on Monday on the back of a global markets rally.

Brent crude traded at $35.16 a barrel on Wednesday, up from $29.19 a week ago and a low of $19.33 on April 21.

"Look at the performance of Oman exposure this month," a fund manager said. "High beta play on oil."

Oman, among the weakest credits in the region, saw the yield on its 30-year bonds due in 2048 fall to 8.8% on Wednesday from 10.4% a month ago. The yield on those notes peaked at 12.1% in March.

The fund manager added that the Gulf debt market was supported by Asian investors, on the back of an issuance by Abu Dhabi on Tuesday in which it sold $3 billion in bonds through a tap of existing three-tranche dollar bonds that it sold last month. 

Kuwait-based KAMCO Investment said in a research note on Wednesday that it expects bond issuances from the Gulf this year to "far surpass" last year's as the region faces widening deficits due to lower oil prices and the impact of the coronavirus pandemic. The Gulf has almost $40 billion in bond maturities this year, it said.

(Reporting by Yousef Saba; Editing by Giles Elgood) ((Yousef.Saba@thomsonreuters.com; +971562166204))