O&G stocks in active trade as oil production cut kicks off

O&G stocks in active trade as oil production cut kicks off
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KUALA LUMPUR (Jan 1): Oil and gas (O&G) counters kicked off the New Year on a stronger footing today, as the cut on oil production commenced on Sunday, following the deal between the Organization of Oil Exporting Countries (OPEC) and non-OPEC countries.

At 2.46pm, shares in SapuraKencana Petroleum Bhd rose 5 sen or 3.09% to trade at a high of RM1.67, with some 9 million shares done.

Other oil and gas (O&G) counters were also looking up, with Bumi Armada Bhd gaining 1.65% to 61.5 sen, with 6.0 million shares done; and UMW Oil & Gas Corp Bhd up 0.57% at 88 sen, after trades of 645,600 shares.

Meanwhile, the smaller cap O&G counters were among top actives, with Sumatec Resources Bhd rising 20% to 9 sen, with 113.6 million shares exchanged and Hibiscus Petroleum Bhd rising 4.88% to 43 sen, with 40.4 million shares traded.

At the time of writing, Brent Crude futures gained 0.56% to US$57.14 per barrel, while WTI Crude futures rose 0.54% to US$54.01 per barrel.

To recap, the non-OPEC countries had agreed to cut production by 558,000 barrels per day (bpd) for the six months starting Jan 1, 2017, on top of OPEC’s decision to reduce output of its members by 1.2 million bpd.

Almost a dozen non-OPEC producers have agreed to reduce output, following the meeting in Vienna on Dec 10, 2016.

Petroliam Nasional Bhd (Petronas) had announced last month that it will make a voluntary adjustment to Malaysia’s crude oil production by up to 20,000 bpd, from its 2016 average production.

Meanwhile, Mexico has pledged to cut production by 100,000 bpd, Azerbaijan by 35,000 bpd, Oman by 40,000 bpd and Kazakhstan by 20,000 bpd.