Bursa energy index jumps 14% after Trump raises hopes of Saudi Arabia-Russia oil war truce

Bursa energy index jumps 14% after Trump raises hopes of Saudi Arabia-Russia oil war truce
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KUALA LUMPUR (April 2): The FBM KLCI closed up 8.24 points or 0.62% at 1,330.90 today as Bursa Malaysia’s energy index jumped 14% in an apparent reaction to crude oil futures’ 10% rise on anticipation of a deal between Saudi Arabia and Russia to end their price war. 

Reuters reported that crude oil futures jumped some 10% on Thursday after US President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war and Russian President Vladimir Putin called for a solution to "challenging" oil markets. It was reported that Brent crude futures rose 11.36%, or US$2.81, to US$27.55 as of 0701 GMT, while US West Texas Intermediate crude futures increased 10.0%, or US$2.03, at US$22.34.

Across Bursa at 5pm, 5.15 billion shares were traded for RM2.44 billion. There were 671 gainers and 203 decliners.

Bursa’s energy index, which tracks oil and gas companies’ share prices, closed up 87.13 points or 14.23% at 699.56, as these stocks ended among Bursa’s most active and top gainers list.

Top active counters included oil and gas-related Sapura Energy Bhd, Hibiscus Petroleum Bhd and Bumi Armada Bhd.

Leading gainers included KLCI components Petronas Dagangan Bhd and Petronas Gas Bhd.

Petronas Dagangan Bhd closed up RM1.32 or 6.48% at RM21.70 while Petronas Gas rose 34 sen or 2.27% to RM15.30. 

"Oil is the talk of the town," AxiCorp Financial Services Pty Ltd global chief market strategist Stephen Innes wrote in a note today.

It was reported that Trump said he had talked recently with the leaders of both Russia and Saudi Arabia and believed the two countries would make a deal to end their price war within a "few days” — lowering production and bringing prices back up.

It was reported that Trump also said he had invited US oil executives to the White House to discuss ways to help the industry "ravaged" by slumping energy demand during the coronavirus outbreak and the price war between Saudi Arabia and Russia.