Energy fuels Bursa's bright spot as conflict lifts oil prices
KUALA LUMPUR: Oil and gas stocks surged in early trade as escalating hostilities between Israel and Iran entered a fourth day, stoking fears of a broader conflict in the oil-rich Middle East and sending crude prices higher.
As of 10.25am, the Bursa Malaysia Energy Index outperformed all other indices, rising two per cent, or 14.83 points, to 755.59. It opened at 748.42 after ending last Friday at 740.76.
It was the only sectoral index to post a gain above one per cent, firmly leading the market while broader Bursa Malaysia traded in the red.
The other sectoral indices in positive territory were Plantation, up 0.48 per cent, and Transportation and Logistics, up 0.19 per cent.
Among the top movers in the energy sector were Hengyuan Refining Co Bhd, which climbed 14 sen or 7.57 per cent to RM1.99, and Hibiscus Petroleum Bhd, up 10 sen or 6.02 per cent to RM1.76.
Other gainers included Petron Malaysia Refining & Marketing Bhd, which added 12 sen or 3.09 per cent to RM4, Petronas Gas Bhd, up 12 sen to RM17.94, and Dialog Group Bhd, up seven sen or 4.46 per cent to RM1.64.
The rally came as Brent crude oil hovered around US$75 per barrel, rebounding sharply from earlier lows following Israeli strikes on Iranian military assets last Friday.
UOB, in a research note, said the market fears a potential disruption to oil flows if the conflict spreads or impacts key shipping lanes like the Strait of Hormuz.
Still, it said the rally in crude may be temporary. The bank maintained its Brent forecast at US$65 for the third quarter and US$60 for the fourth, citing strong global supply buffers and rising concern over slowing demand.
"The jump in Brent crude is driven by geopolitical risk, but it's still too early to call for a sustained rally. We need to see how Iran retaliates and how Saudi Arabia and OPEC+ respond," it added.
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