KUALA LUMPUR (June 16): Shares in Bursa Malaysia-listed oil and gas (O&G) stocks were actively traded today on optimism that a possible oil production cut extension by the Opec+ crude oil exporter group would cushion the Covid-19 impact on oil prices.  

Bursa’s energy index, which tracks O&G companies’ share prices, was the biggest gainer among the sectoral indices. The index was up 27.76 points or 3.69% at 780.37, while O&G stocks were among Bursa’s most actively traded.

Active stocks included Barakah Offshore Petroleum Bhd (up 2.5 sen or 125% at 4.5 sen), TH Heavy Engineering Bhd (up 1.5 sen or 18.75% at 9.5 sen), KNM Group Bhd (up 1.5 sen or 7.5% at 21.5 sen), Bumi Armada Bhd (up one sen or 4.55% at 23 sen) and Icon Offshore Bhd (up one sen or 8.7% at 12.5 sen). 

Also on the list were Hibiscus Petroleum Bhd (up three sen or 5.04% at 62.5 sen) and Velesto Energy Bhd (up 0.5 sen or 3.33% at 15.5 sen). 

Other O&G counters that showed gains this morning included Sapura Energy Bhd (up one sen or 11.11% at 10 sen), Serba Dinamik Holdings Bhd (up five sen or 3.01% at RM1.71), Yinson Holdings Bhd (up five sen or 0.83% at RM6.1), Petronas Dagangan Bhd (up 64 sen or 3.12% at RM21.14) and Petronas Chemicals Group Bhd (up eight sen or 1.24% at RM6.55). 

To recap, the United Arab Emirates’ energy minister yesterday expressed confidence that Opec+ producers that have not been in full compliance with agreed cuts would up their game. He also said there were signs that oil demand was increasing as countries eased lockdowns in some parts of the world.

The Organization of the Petroleum Exporting Countries and its allies including Russia, a grouping known as Opec+, agreed this month to extend production cuts of 9.7 million barrels per day through July, according to a Reuters report. 

“US shale producers are also cutting back on drilling amid a collapse in demand for oil,” it added. 

Reuters reported that oil prices dipped today on jitters that a rise in Covid-19 infections around the world could hurt fuel demand, but hopes that production cuts could be extended kept declines in check.

“Brent crude was down 14 cents, or 0.4%, at US$39.58 (RM168.91) a barrel at 0027 GMT, having gained 2.6% on Monday. US oil fell 24 cents, or 0.7%, to US$36.88 a barrel after closing 2.4% higher in the previous session,” it added.