Hot Stocks Oil and gas counters rise as much as 5% on bargain hunting

by **Cals** Tue 01 Sep 2015, 19:00

Hot Stocks
Oil and gas counters rise as much as 5% on bargain hunting

KUALA LUMPUR (Sept 1): Oil and gas counters were among the top gainers today, on bargain hunting activities.
At 11.15am today, SapuraKencana Petroleum Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) shares were up 7.56% or 13 sen to RM1.85, with 14.28 million shares done.
The stock of UMW Oil and Gas Corporation Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) rose as high as 8% to RM1.08 sen, whileSumatec Resources Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) was up as much as 7.4% to 14.5 sen.
While an increase in oil price may be a bad news for most consumers, it should be good news for Malaysia economy, said MIDF Research in a note today.
Currently a number of oil rigs and exploration activities have stopped due to the extremely low oil price, which will eventually affect Malaysia’s trade balance through an increase in imports and a decline in exports, it added.
Malaysia’s trade balance has never been in the negative territory for the past 17 years. As such, in the event the number falls into the red, the market will panic and our ringgit will be hit further, said MIDF Research.
Furthermore, despite the fact that the government’s revenue was now being diversified to a wider range of sources, Malaysia still receives a significant amount from the oil industry, it noted.
Therefore, MIDF Research expressed relief over rumours that OPEC may be taking action to hold back their supply, as it will push the oil price up, hence reducing the risk of trade balance deficit. As the government previously planned for a targeted oil subsidy mechanism, we expect the plan will be implemented if the price really did rebound to $80 per barrel, in order to ease the burden of lower income consumers.
An analyst, when contacted, said crude oil has had a bull run last week, gaining over 20%.
"Prices of oil has gone up and there will be a bit of profit taking," the analyst added.
Reuters reported oil futures soared on Monday for a third consecutive day, rising more than 8% as a downward revision of U.S. crude production data and OPEC's readiness to talk with other producers, helped extend the biggest three-day price surge in 25 years.
U.S. crude oil prices have skyrocketed more than US$10 dollar a barrel in three days, erasing the month's declines as a series of relatively small-scale supply disruptions and output risks, prompted bearish traders to take profits on short positions, which had been near a record a week ago, it added.