KUALA LUMPUR: Oil and gas (O&G)-related stocks, which have rallied of late, were hammered no thanks to the drop in crude oil prices, in addition to the global selldown of equities.
Brent crude oil dropped 71 US cents (RM2.78) to US$66.91 per barrel, while West Texas Intermediate crude declined 86 US cents to US$63.29 per barrel as at press time.
MIDF analyst Aaron Tan said the O&G stocks were only affected due to their high propensity to be overbought by retail investors.
“O&G counters have been rallying in the past week or so. In a market downturn like today (yesterday), it is only normal for these stocks to get pulled back because of their high trading volume,” he said.
UMW Oil & Gas Corp Bhd was the most actively traded stock. It was down 1.5 sen or 4.62% to 31 sen. Its volume stood at 152.71 million shares, which is sharply higher than its 200-day average volume of 39.5 million shares.
Also actively traded was Hibiscus Petroleum Bhd, which was down 2.5 sen or 2.86% at 85 sen, with 152.8 million shares exchanging hands.
Other active O&G counters included Sumatec Resources Bhd and Sapura Energy Bhd. Sumatec Resources rebounded from its earlier losses to close unchanged at 7.5 sen, while Sapura Energy erased its losses and recorded a gain of 1.5 sen or 2.13% to close at 72 sen.
Reuters reported oil prices extended their fall from the previous market session, as global financial markets tumbled lower in the wake of one of the biggest intraday falls ever registered on Wall Street.
“People ran to the US dollar as a safe haven currency. Therefore, the US dollar strengthens. This makes commodities more expensive to buy, hence oil futures get sold off,” the news agency quoted Sukrit Vijayakar, director at consultancy Trifecta Energy, as saying.