Oil price dips below US$30/bbl

TheEdge Tue, Mar 17, 2020 11:42am - 4 years View Original


KUALA LUMPUR (March 17): Brent crude oil price dipped below US$30/bbl (RM129.90/bbl) in early trade before rebounding, as the market lacked direction following the heavy losses since late February. 

At 10.50am, the benchmark oil price rebounded slightly, up 1.83% to US$30.60/bbl, having traded at the range of US$29.90-US$31.25 earlier today. 

The commodity price had lost around 47% over the last one month alone, as Saudi Arabia sparked a war for market share by lowering prices and planning to increase production as OPEC+ talks with Russia failed to come to an agreement to lift prices.

Reuters reported that Saudi Aramco has said this week it would likely carry over its planned higher oil output for April into the following month, and that it was "very comfortable" with an oil price of US$30 a barrel.

Separately, oilprice.com reported that charter rates for very large crude carriers have jumped over 600% despite the recent oil price plunge. 

This is because producers increased booking of tankers due to increased production, and as traders and trading arms of oil majors are looking to charter tankers for floating storage as the oil market structure has flipped to contango. 

This is the market situation in which front-month prices are lower than prices in future months, pointing to a crude oil oversupply and making storing oil for future sales profitable.  

Closer to home, oil and gas (O&G) stocks across Bursa Malaysia continued to receive a beating by the market, save for several counters that experienced some bargain hunting from their recent lows. 

O&G stocks that were on the up at press time include Dialog Group Bhd (up 6 sen to RM2.86), Dayang Enterprise Holdings Bhd (up 8 sen to 96 sen), Carimin Petroleum Bhd (up 1.5 sen to 42.5 sen), and Wah Seong Corp Bhd (up 0.5 sen to 59 sen). 

The sector also topped the actives across the local bourse, led by Sapura Energy Bhd, Hibiscus Petroleum Bhd, and Bumi Armada Bhd. 

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