KUALA LUMPUR (June 21): Local oil stocks tumbled this morning after recent highs as global crude oil prices fell today, with Brent crude falling 19.47% since a January high amid a supply glut as Organisation of Petroleum Exporting Countries (OPEC) struggles to cut output.
At 11.40am, Petron Malaysia Refining & Marketing Bhd fell from a recent high to RM7.35, down 35 sen or 4.54%, with 538,200 shares done for a market capitalisation of RM2.03 billion.
Hengyuan Refining Co Bhd dropped 19 sen or 3.49% to RM5.26 with 576,700 shares traded for a market capitalisation of RM1.6 billion.
Sapura Energy Bhd was down two sen or 1.2% to RM1.65 with 5.3 million shares done, valuing it at RM10 billion.
Bumi Armada Bhd inched down 1.5 sen or 2% to 73.5 sen with 4.1 million shares transacted for a market capitalisation of RM4.3 billion.
Reuters reported that oil fell about 2% on Tuesday, with Brent settling at seven-month lows and US crude at its cheapest level since September, after increased supply from several key producers overshadowed high compliance by OPEC and non-OPEC oil producers with a deal to cut global output.
At press time, Brent crude futures dipped 0.22% to US$45.92 per barrel while the West Texas Intermediate slipped 0.14% to US$43.45 per barrel.
Inter-Pacific Securities Sdn Bhd oil and gas analyst Brian Yeoh said it is difficult to tell how long the downtrend would carry on though it could be for 'a while'.
He said Libya's restart of its oil wells and United States' additional oil rigs, which would add to the oversupply, is impacting the situation.
"The sentiment is bad now. Brent crude has dropped 19.47% to its lowest today from US$57 on Jan 6. It is hard to tell when prices could trend higher. Investors should stay away from oil stocks for now," Yeoh told theedgemarkets.com.