O&G Counters Remain In Focus Amid Persistent Oil Market Risks

KUALA LUMPUR, Sept 15 (Bernama) -- Oil and gas (O&G) counters remained in focus with investment banks maintaining a positive stance on the sector.

This comes as the crude oil market has transitioned from a temporary shock into a persistent new normal characterised by structural supply disruptions, maritime chokepoint risks and refining bottlenecks.

According to MBSB Investment Bank Bhd (MBSB IB), the macro landscape and its broader economic implications centre around a higher floor for Brent crude oil prices and a cap on refining capacity.

“Upstream O&G is expected to show a strong outperformance, as non-Middle Eastern exploration and production (E&P) companies are expected to benefit from strong realised prices and surging operational demand.

“Midstream O&G would benefit from the spillover, as tanker operators and midstream storage hubs profit from longer maritime trade routes, such as bypassing the Strait of Hormuz and Bab el-Mandeb, and buffer storage demand,” MBSB IB said in a note today.

Yesterday, it was reported that oil prices continued their surge, rising more than three per cent to reach US$108 per barrel on Monday following recent strikes over the weekend on Saudi Arabia’s energy infrastructure, which led to the temporary shutdown of the East-West oil pipeline.

Global benchmark Brent crude oil climbed 1.17 per cent to US$106.92 per barrel at the time of writing.

MBSB IB’s top picks are MISC Bhd, with a buy recommendation and a target price of RM9.22, and Dialog Group Bhd, with a buy recommendation and a target price of RM2.57.

At 10.27 am, MISC’s share price rose 11 sen to RM7.92 with 887,000 shares traded, while Dialog’s share price slid one sen to RM1.98 with 960,300 shares traded.

-- BERNAMA