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Higher oil price at above US$50 needed for O&G stocks to charge ahead

THE gradual rise in oil prices has boosted the share prices of oil & gas (O&G) stocks of late as the market looks forward to the recovery theme. Notably, since early November, the FBM Energy Index has risen 45%. Most O&G stocks delivered positive returns during this period, except for Dialog Bhd (-3.5%), Favelle Favco Bhd (-3.9%) and Ocean Vantage Holdings Bhd (-2%). Refiners such as Hengyuan Refinery Company Bhd and Petron Malaysia Refining & Marketing Bhd were among the top gainers, surging 144.9% and 96.7% respectively. That said, analysts are of the view that the upside for O&G stocks is limited at this juncture, unless the oil prices climb further.

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