KLCI ends higher as Saudi Arabia attack spurs O&G share demand

KLCI ends higher as Saudi Arabia attack spurs O&G share demand
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KUALA LUMPUR (Sept 17): The FBM KLCI closed 3.05 points or 0.19% higher at 1,604.30, while Bursa Malaysia's energy index rose by a larger quantum, as investors bought shares of oil and gas (O&G)-related companies.

This followed the surge in crude oil prices after the attack on Saudi Arabia's oil facilities over the weekend led to world oil supply concerns. At 5pm today, Bursa's energy index rose 30.47 points or 2.79% to finish at 1,122.58.

Among the 30 KLCI stocks, Petronas Chemicals Group Bhd was the top percentage gainer, after closing 36 sen or 4.86% higher at RM7.77. Leading gainers included Petronas Gas Bhd, after the stock rose 18 sen or 1.11% to RM16.42.

“The gains in the KLCI was mainly led by Petronas Chemicals, Petronas Gas and Petronas Dagangan Bhd, due to Saudi’s oil production (disruption) after the drone attack. This also contributed to gains across the broader market, particularly in O&G counters,” Malacca Securities Sdn Bhd senior analyst Kenneth Leong told theedgemarkets.com today.

At 5pm, the KLCI closed up after erasing losses in the final trading minutes. The KLCI had earlier fallen to its intraday low at 1,597.09.

Global crude oil prices fell on Tuesday, after a spike on Monday. Reuters reported oil dropped on Tuesday, although the market remains on tenterhooks over the threat of a military response to attacks on Saudi Arabian crude oil facilities that cut the kingdom's output in half and sent prices soaring by the most in decades.

It was reported that the Saturday attack raised the prospect of a major supply shock in a market that in recent months had focused on demand concerns, due to erosion of global growth, amid the ongoing US-China trade dispute. Saudi Arabia is the world's top oil exporter and has been the supplier of last resort for decades.

"Brent crude was down 30 cents or 0.4% at US$68.72 a barrel by 0631 GMT, and West Texas Intermediate was down 57 cents or 0.9% at US$62.33 a barrel. Earlier, the crude benchmarks both fell by around 2%.

"On Monday, the prices surged nearly 20% in intraday trading in response to the attacks, the biggest jump in almost 30 years, before closing nearly 15% higher at four-month highs," Reuters said.