Friday 29 Mar 2024
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KUALA LUMPUR (May 26): The FBM KLCI fell 0.66 point to settle at 1,773.30 points on oil and gas-related share losses after the Organization of the Petroleum Exporting Countries' (OPEC) output cut extension disappointed investors.

Investors had earlier hoped OPEC would do more to support crude oil prices. At 12:30pm, the KLCI fell on index-linked stocks like Petronas Gas Bhd and Petronas Dagangan Bhd. The KLCI erased gains after rising to its highest so far today at 1,778.18 points.

Bursa Malaysia saw 1.36 billion shares worth RM1.11 billion traded.

There were 214 gainers and 635 decliners. Petron Malaysia Refining & Marketing Bhd was top decliner on the OPEC news.

Reuters reported that at Thursday's meeting in Vienna, OPEC and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million barrels per day until the end of the first quarter of 2018. The initial agreement would have expired in June this year.

Crude oil plunged 5% following the announcement, and held its losses early on Friday. Brent crude futures were at US$51.09 per barrel at 0348 GMT, down 37 US cents, or 0.7%, from their last close. US West Texas Intermediate crude futures were back well below US$50, at US$48.46, down 44 US cents, or 0.9%.

In Malaysia, FXTM corporate development vice president Jameel Ahmad wrote in a note today: "I don’t actually expect much movement when it comes to the outlook for the price of oil following confirmation of a nine-month production cut extension, as this was already priced into the market some time before OPEC confirmed the outcome."

"While confirmation of an extension to the previous agreement is going to help achieve price stability, it is not going to significantly alter the outlook for the price of oil when it comes to material buying pressure," Jameel said.

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