OPEC's surprise move over the weekend to cut its output has driven local energy-related stocks higher today.
The Bursa Energy Index, which tracks oil and gas-related share prices, opened 20.69 points higher at 857.50 in early morning trading on Monday.
World crude oil prices soared after the Organization of the Petroleum Exporting Countries (OPEC) and its allies OPEC+ decided to cut production by 1.16 million a day.
This unexpected reduction was made voluntarily as a precautionary measure by OPEC aimed at supporting the stability of the oil market.
Among the stocks that benefited from the OPEC announcement were Velesto Energy Bhd which rose 4.76% to 22 sen, Hibiscus Petroleum Bhd rose 8.08% to RM1.07 and Reach Energy Bhd added 7% to 7.5 sen.
In addition, Perdana Petroleum Bhd also rose 8.11% to 20 sen and KNM Group Bhd jumped 22.22% to 5.5 sen.
MIDF Research in its note said higher oil prices bode well for the upstream sector in terms of exploration and production activities.
He added that since Malaysia has more than 1,300 oil and gas service and equipment companies, the sector will be the main beneficiary of the increase in crude oil prices in the near term.
