Oil And Gas Shares Rise, Underpinned By Oil Price Surge

By Nurul Hanis Izmir KUALA LUMPUR, Sept 30 (Bernama) -- The oil price jump of more than five per cent following the Organisation of the Petroleum Exporting Countries' (OPEC) decision to cut production has pushed global and local oil and gas-related stocks to trade higher Thursday. The three-day OPEC meeting, which concluded Wednesday, finally received green lights from major oil producing countries to reduce the oil output for the first time since 2008. As a result, earlier Thursday, oil prices surged about five per cent, with the West Texas Intermediate trading at US$46.75 per barrel. "This has boosted the commodity's prices, benefiting related stocks including that of national oil company Petronas's units," a dealer said. At close, shares of Petronas Gas rose two sen to RM21.88 and Petronas Chemicals added nine sen to RM6.69. (US$1 = RM4.14) Other oil and gas stocks, SapureKencana, Bumi Armada and Petron saw their shares increased seven sen to RM1.57, three sen to 72 sen and half-a-sen to RM4.05. It was reported that under the agreement, OPEC oil production is expected to be cut to a range of 32.5 to 33 million barrels per day from 33.4 million. However, Mercury Securities research head Edmund Tham said the OPEC deal to cut oil production would likely provide a short-term support for oil prices. "The decision to cut the oil production might be temporary and traders were still cautious and doubtful that oil prices will stay lower in the next few weeks," he told Bernama. On other factors that will provide momentum for the local index in the next few weeks, Tham said investors would keep their eyes on the upcoming 2017 Budget to see the incentives in store. -- BERNAMA