KUALA LUMPUR (Oct 6): SapuraKencana Petroleum Bhd, Uzma Bhd ,Coastal Contracts Bhd, UMW Oil & Gas Corp Bhd and Perisai Petroleum Teknologi Bhd fell more than 3% each as crude oil prices declined.

Analysts said shares of the oil and gas (O&G) firms had also fallen as investors locked in gains due to their rich valuations ahead of Malaysia's Budget 2015 announcement this Friday (Oct 10).

“The market could be seen as reacting to the upcoming budget announcement by preparing for any adverse outcome to the stock market after the announcement, if any, and choosing to cash in on oil and gas stocks due to their rich valuations,” said the analyst.

At 2.45pm, SapuraKencana fell 13 sen,or 3.37% to RM3.73, Uzma dropped 13 sen, or 3.6% to RM3.42 while Coastal declined 21 sen, or 4.67% to RM4.29.

UMW Oil & Gas dropped 12 sen or 3.4 % to RM3.39, while Perisai fell six sen or 4.6 % to RM1.23.

At 4.10pm, SapuraKencana changed hands at RM3.76, Uzma was traded at RM3.38 while Coastal was transacted at RM4.25. UMW Oil & Gas remained at RM3.39 while Perisai changed hands at RM1.22

For comparison, the FBM KLCI dropped 5.46 points or 0.3%

According to a Reuters report, Brent crude oil futures fell to just above US$91 a barrel today. The report said Brent crude oil for November delivery fell US$1 to US$91.11 after it hit US$91.03 earlier in the session, its lowest point since June 2012.

Reuters quoted Ben Le Brun, a market analyst at Sydney’s OptionsXpress as saying that the market was caught on a vortex of high supply and weak demand

The Edge Financial Daily reported today that some analysts believed that one of the underlying reasons for the sell down in O&G shares was Capital Dynamics Asset Management Sdn Bhd Managing Director Tan Teng Boo's comments in a recent interview with the The Edge Financial Daily.

Tan was quoted as saying that O&G counters were expensive due to their rich valuations and unsustainable profit margins.

He said the local O&G sector had more “sell“ calls than “buy” ratings at the moment.