Oil and gas (O&G) related stocks surged as oil price rose above US$30 a barrel for the first time in two months, reports The EdgeMarkets.
Market rebalance
Oil and gas (O&G) related stocks on Bursa Malaysia surged with strong trading interests, as the oil price rose above US$30 a barrel for the first time in two months.
This rise was after the news that major producers are reining in efforts to rebalance the market.
O&G stocks dominated
O&G stocks dominated the top actives on Bursa, led by Bumi Armada Bhd (up 25.64%), Velesto Energy Bhd (up 14.29%) and Icon Offshore Bhd (up 60%), with trading volume surpassing the 200 million shares mark.
- Hibiscus Petroleum Bhd (up 11.21%) and KNM Group Bhd (up 19.44 %), with trading volume exceeding the 100 million mark.
- The Bursa Malaysia Energy Index was the biggest gainer among all indices across the bourse, gaining 9.7% to 829.46 points.
The brisk trading action among O&G stocks has pushed the trading volume across Bursa to cross 3.35 billion in just the first hour of trading.
Despite displaying strong performance, most of the O&G stocks were still largely down year to date (YTD), by 23% to 62%.
The biggest laggards YTD include Sapura Energy Bhd (down 62%), Velesto Energy Bhd (down 57%) and Perdana Petroleum Bhd (down 49%).
Ups and downs
Serba Dinamik Holdings Bhd
Serba Dinamik Holdings Bhd, the top pick among most analysts and which have won several large engineering, procurement, construction and commissioning contracts, is currently down 23% YTD.
US WTI crude June futures
The US WTI crude June futures climbed around 4.4% to US$30.72 a barrel after almost doubling in a run of three weekly advances. Brent for July settlement added 3.6% to US$33.67 following a 4.9% advance last week.
This comes as the number of drilling rigs in the US fell for a ninth week to levels not seen in more than a decade, while stockpiles at the key storage hub in Cushing, Oklahoma, shrank for the first time since late February.
US producers production
The US producers have shed nearly 10% of their production with almost 10 million barrels a day.
According to tanker-tracking data, OPEC+ responded to the oil market’s collapse with an urgency never seen before, and was also seen well on their way to removing around 10% of global supplies.
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Source: The EdgeMarkets
