KUALA LUMPUR: Oil & gas (O&G) counters led by Petronas Chemicals Group Bhd staged a rebound yesterday on bargain hunting, said analysts.

The rebound followed a beating in O&G stocks on Monday as global oil prices fell to a five-year low of below US$68 (RM232.56) per barrel.

However, analysts are unsure if the surge reflects a dead cat bounce pattern, which depicts a short-term recovery followed by a continuation of the downtrend.

AllianceDBS Research analyst Tan Arhnue told TheEdge Markets.com that it is still unclear what the impact of crude price volatility will be on O&G stocks.

Another O&G research analyst said the rebound in O&G stocks yesterday was due to investors picking up oversold stocks as valuation improved.

“Valuation has dropped a lot, but fundamentally there is no change,” he said.

The analyst agreed much uncertainty remained in the market due to declining crude oil prices and Petroliam Nasional Bhd’s (Petronas) cut in next year’s capital expenditure budget.

“I don’t think O&G stocks will reach its former valuation or peak,” he said.

Petronas Chemicals shares rose 37 sen or 7.21% to end the day at its highest of RM5.50, emerging as the top gainer with 2.31 million shares changing hands.

Petronas Dagangan Bhd climbed 14 sen or 0.96% to close at RM14.78 on trades of 885,900 shares, while Petronas Gas Bhd gained 10 sen or 0.48% to RM21.10 with 1.13 million shares done.

SapuraKencana Petroleum Group Bhd nudged up 5 sen or 1.99% to RM2.56 on volume of some 39.92 million shares.

UMW Oil & Gas Corp Bhd shares gained 15 sen or 6.44% to close at RM2.48 yesterday. The sixth top gainer saw trades of some 13.49 million shares. It had earlier scaled a high of RM2.56.

Dialog Group Bhd rose 7 sen or 5.56% to settle at RM1.33 on volume of some 69.47 million shares.

This article first appeared in The Edge Financial Daily, on December 3, 2014.