Bursa's Energy index rises the most on Covid-19 vaccine-driven optimism

Bursa's Energy index rises the most on Covid-19 vaccine-driven optimism
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KUALA LUMPUR (Nov 25): Bursa’s Energy Index, which tracks share prices of oil and gas (O&G)-related companies, rose over 5% in morning trade today after crude oil prices climbed some 4% overnight as encouraging Covid-19 vaccine trial results generated expectations of a fuel-demand recovery.

News of US president-elect Joe Biden beginning his transition to the White House also appeared to support crude oil markets.

At 10.42am today, Bursa’s Energy Index was 40.62 points or 5.24% higher at 815.97 as Sapura Energy Bhd and Bumi Armada Bhd’s share prices climbed among Bursa’s most active stocks.

At 10:46am, Sapura Energy had added one sen or 8.7% to 12.5 sen, while Bumi Armada rose one sen or 3.7% to 28 sen.

Sapura Energy, the top active stock so far, saw some 376 million shares traded, while Bumi Armada registered a volume of about 112 million shares.

Overnight, it was reported that crude oil prices rose about 4% to touch highs not seen since March as a third promising coronavirus vaccine raised hope for a fuel demand recovery and as Biden began his transition to the White House.

It was reported that Brent crude settled at US$47.86 (RM195.56) a barrel, gaining US$1.80, or 3.9%, while US West Texas Intermediate (WTI) crude settled at US$44.91 a barrel, rising US$1.85 or 4.3%.

"Both benchmarks ended at their highest close since March 5. AstraZeneca on Monday said its Covid-19 vaccine was 70% effective in trials and could be up to 90% effective, giving the fight against the pandemic another potential vaccine after positive results from Pfizer-BioNTech and Moderna,” Reuters reported.

Today, Reuters quoted Bob Yawger, the director of energy futures of Mizuho Securities, as saying “the energy sector is threatening to slam the door on the Covid-19-era struggle and ride positive vaccine economics to the next level”.