Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Jan 19): Oil and gas (O&G) counters dominated Bursa Malaysia’s top active list this morning, as analysts are optimistic Brent crude oil could average at US$60-US$65 per barrel (bbl) in 2018.

At 11.30am, UMW Oil & Gas Corp Bhd (UMWOG) saw 101.72 million shares done, up 1.5% or half a sen at 35 sen, recouping earlier losses, following a downgrade to ‘Sell’ by AmInvestment Research on expectations of unprofitability.

Sapura Energy Bhd and Sino Hua-An International Bhd rose 1.3% and 6.4% respectively, while Hibiscus Petroleum Bhd lost 1.9% at the time of writing.

In an industry note by AllianceDBS research, analyst Inani Rozidin said a positive oil price trajectory can be supported, as long as the supply side is wilfully capped by market participants.

"This is supported by robust oil consumption demand, which coupled with OPEC's adherence to production cuts and extension of the production cuts until end-2018, has led to steady global inventory drawdowns," Inani said.

Global capital expenditure budgets are also expected to remain resilient in 2018 and accelerate in 2019 albeit from a low base, as oil prices averages to the US$65/bbl mark.

As at the time of writing, Brent crude futures were reported to have inched down 0.8% or 53 cents from their last close to US$68.78. On Monday, they hit their highest since December 2014 at US$70.37/bbl.

U.S. West Texas Intermediate (WTI) crude futures were at US$63.36 a barrel, down 59 cents or 0.9% from their last settlement. WTI marked a December-2014 peak of US$64.89 a barrel on Tuesday.

Reuters reported this morning that the lower prices were prompted by a recovery in US oil production after a recent drop, but analysts are not expecting steep declines.

      Print
      Text Size
      Share