SapuraKencana, Bumi Armada seen gaining from oil price spike

by **Cals** Thu 19 Jun 2014, 03:10

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Wednesday, 18 June 2014 10:42
KUALA LUMPUR (June 18): SapuraKencana Petroleum Bhd, Bumi Armada Bhd, Uzma Bhd and Scomi Energy Services Bhd are among oil and gas support services providers expected to benefit from the current rise in crude oil prices, according to MIDF Amanah Investment Bank Bhd.

Global oil prices have risen about 4% this month on concern of supply disruption arising from political uncertainty in major producer Iraq, MIDF analyst Aaron Tan Wei Min said.

Reuters reported that US crude oil futures rose in early Asian trade on Wednesday, as tension in Iraq cast doubt on the Organisation of the Petroleum Exporting Countries member's oil growth targets and US crude stocks fell more than expected.

US July crude gained 20 cents to $106.56 a barrel as of 0010 GMT after it ended 54 cents down at $106.36 a barrel in the previous session. The US July contract expires on June 20.

Tan said: "Companies which could see potential immediate business impact from sudden increase in offshore activities are offshore support vessel (OSV) operators and drilling equipment suppliers.

"OSV operators could charge 20%-30% higher rates for spot charters to ferry workers and equipment, and equipment suppliers could see immediate demand for drilling fluids, mud etc."

The increase in oil prices and threat of global oil supply may also prompt oil producing countries like Malaysia to boost production to capitalise on high oil prices and meet global demand, he said.