KUALA LUMPUR (May 16): Oil and gas-related stocks piqued investors' interest on reports that oil giants Saudi Arabia and Russia agreed to extend production cuts till March 2018.
At 11.45am, Petronas Dagangan Bhd went up 34 sen or 1.41% to RM24.40 with 581,100 shares traded for a market capitalisation of RM24.2 billion.
Petron Malaysia Refining & Marketing Bhd rose 12 sen or 1.41% to RM8.64 with 210,700 shares, bringing its market capitalisation to RM2.3 billion.
Hengyuan Refining Co Bhd grew nine sen or 1.86% to RM4.92 with 1.5 million shares transacted. Its market capitalisation stood at RM1.48 billion.
Borneo Oil Bhd pared gains after rising to 19.5 sen earlier to trade unchanged at 19 sen, with 12.7 million shares changing hands for a market capitalisation of RM575.5 million.
KNM Group Bhd gained half sen or 1.67% at 30.5 sen with 16 million shares traded. It has a market capitalisation of RM661.2 million.
At the same time, Brent crude oil futures were up 0.41% at US$52.03 per barrel while the West Texas Intermediate grew 0.41% to US$49.05 per barrel.
Yesterday, Reuters reported that Saudi energy minister Khalid al-Falih and his Russian counterpart Alexander Novak said they would do whatever it takes to reduce the inventory overhang.
The statement comes ahead of Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna on May 25 when leaders of the member nations would consider extending output cuts agreed with 11 non-members including Russia in December last year, Reuters added.
Public Investment Bank Bhd maintained an "overweight" call on the oil and gas sector, supported by the balancing of oil prices, which would stabilise at the current US$50 per barrel levels and for a prolonged period.
"Our view is based on oil prices remaining relatively stable at the US$50 per barrel levels in 2017, enough for oil majors to restart their capex plans, considering the lower cost of production and better efficiencies in the sector.
"We believe the industry is more focused on robust activity at stable oil prices, rather than very high oil prices at this juncture, which is not sustainable over the long run," said its analyst Mabel Tan.