KUALA LUMPUR (Dec 2): Oil & gas (O&G) counters led by UMW Oil & Gas Corporation Bhd (UMWOG) staged a rebound in morning trades today on bargain hunting, according to analysts.

The rebound followed a beating in O&G stocks yesterday as global oil prices fell to a five-year low of below US$68 per barrel.

However, analysts are unsure if the surge reflects a dead cat bounce pattern, which depicts a short term recovery followed by a continuation of the downtrend.

Today, AllianceDBS Research analyst Tan Arhnue told TheEdge Markets.com that it was still unclear as to the impact of crude price volatility on O&G stocks.

“It’s quite hard to say. It depends on crude oil prices,” she told over the telephone.

Nevertheless, Tan said "it is good to see" the market had embarked on bargain hunting for cheap O&G stocks following the selldown yesterday.

Another O&G research analyst said the rebound in O&G stocks today was due to investors picking up oversold stocks as valuation had improved.

“Valuation has dropped a lot, but fundamentally there is no change,” he said.

The analyst concurred much uncertainty remained in the market due to declining crude oil prices and Petroliam Nasional Bhd’s (Petronas) cut in next year’s capital expenditure budget.

“I don’t think O&G stocks would reach its former valuation or peak,” he added.

At 10.56 am, UMWOG gained 15 sen or 6.4% to RM2.48. The second top gainer saw trades of some 6.2 million shares. It had earlier scaled a high of RM2.56.

Petronas Chemicals Group Bhd rose 8 sen or 1.6% to RM5.21. The seventh top gainer saw 804,400 shares changed hands. It had earlier hit a high of RM5.29.

Petronas Dagangan Bhd climbed 2 sen or 0.1% to RM14.66 on trades of 279,500 shares. Petronas Gas Bhd gained 8 sen or 0.4% to RM21.08 with 125,600 shares changing hands.

SapuraKencana Petroleum Group Bhd nudged up 2 sen or 0.8% to RM2.53 on volume of some 18.6 million shares.

Dialog Group Bhd rose 3 sen or 2.4% to RM1.29 on volume of some 26.1 million shares.