KUALA LUMPUR (March 11): Oil and gas (O&G) stocks, which took a hit on Monday after the crude oil price crash, are on course for a second day of rebound, amid rise in oil prices on hopes of output cuts by US producers.

Some of the energy counters rose between 7.5% and 13% in active trade today.

At mid-morning, the Energy Index gained 51.37 points or 6.67% to 821.71.

The most heavily traded energy counter included Sapura Energy Bhd, up 1.5 sen or 13% at 12.5 sen, and Bumi Armada Bhd, which climbed 11% or 2 sen to 19.5 sen.

Also staging a rebound was Velesto Energy Bhd, which was up 11% or 2 sen at 19 sen.

Upstream producer Hibiscus Petroleum Bhd gained 4.5 sen or 10% to 48 sen.

Others in the energy sector that staged a strong rebound included O&G service providers Dayang Enterprise Holdings Bhd, up 11 sen at RM1.43, and Perdana Petroleum Bhd, up 1.5 sen at 18.5 sen.

At press time, Brent crude futures rose US$1.33 or 3.6% to US$38.55 a barrel, while US West Texas Intermediate crude gained US$1.01 or 2.94% to US$35.37 a barrel, following a jump of over 8% the previous day.

Hong Leong IB Research said it is revising its oil price assumption for 2020 from US$60 per barrel to US$50 per barrel, in view that in the previous price war in 2014, oil price crashed 65% over a six-month period.

Meanwhile, the research house expects short-term oil price risk and earnings risk to the energy sector to be elevated, as it is understood that Russia views further production cuts will be to the benefit of US shale producers at its detriment.