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Some improvement on oil and gas stocks in Bursa Malaysia after oil price rose

U.S. stocks opened higher Friday, with the Dow Jones Industrial Average topping the symbolic 18,000 mark in the morning, after oil prices rose above $60 a barrel for the first time in 2015. The move comes a day after all three major U.S. indices closed at their highest level this year.

The recent rebound in global oil prices has been driven by the sharp drop in the number of rigs drilling and the slew of announcements from major oil companies that are cutting back on investment, says London-based firm Capital Economics.

The oil prices expected to gradually climb back to around $70 per barrel over the medium term, helped on their way by further evidence of reductions in investment. However, the prices wont shoot back to $100 anytime soon.

Brent crude, the benchmark for global oil prices, added $2.20 to $61.48 a barrel for April 15 delivery on the London ICE Futures Exchange. West Texas Intermediate crude, the benchmark for U.S. oil prices, added $1.54 to $52.75 a barrel for March 15 delivery on the New York Mercantile Exchange.

The global markets also got a boost after the eurozone economy expanded more than expected last quarter, boosted by strong growth in Germany, Europe’s largest economy. Gross domestic product in the 18 countries that share the euro, rose 0.3 percent in the fourth quarter over the previous period.

Most second and third liner oil and gas (O&G) stocks in Bursa Malaysia show some improvement. Among them, Petra Energy Bhd rose 17.8% from it lowest in last two months to close at RM1.52, Alam Maritim Resources gain 53.4% to close at RM0.79, while Petronas Chemical increase 14% to RM5.30,

TH Heavy Engineering was up 58.2% to RM0.435, Scomi gain 25.5% to RM0.295, while Perisai Petroleum close at RM0.67, up 76.3% and KNM gain the most to close at RM0.72 or 82.3% from it lowest.

SapuraKencana converted US$2.3bil (RM8.18bil) of its existing conventional borrowings into an Islamic facility, paving way for it to return to the Securities Commission’s list of Shariah-compliant securities. SapuraKenchana gained 44.6% to close at RM2.92. Bumi Armada was also up 21.2% to RM1.20, while Dialog gain 32.8% to RM1.58 on last Friday.

Based on the global oil price movement, the consumer fuel price such as RON95 and RON97 for March could possibly increase. The Malaysian Ringgit compared to US Dollar is at RM3.58 per USD.

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