KUALA LUMPUR, Sept 20 (Bernama) -- Bursa Malaysia ended higher on Friday in line with most Asian markets, mirroring gains from Wall Street, where investors welcomed the US Federal Reserve's substantial interest rate cut. The FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 3.17 points, or 0.19 per cent, to 1,668.82 at the close from Thursday's close of 1,665.65. It opened 5.03 points higher at 1,670.68, trading between 1,668.48 and 1,674.04 throughout the session. In the broader market, gainers outpaced decliners 732 to 468, while 465 counters were unchanged, 850 untraded and 32 suspended. Turnover swelled to 4.19 billion units worth RM5.97 billion, from Thursday's 3.99 billion units worth RM4.08 billion. UOB Kay Hian Wealth Advisors head of investment research, Mohd Sedek Jantan, noted the FBM KLCI's gains were led by utilities, logistics, and banking stocks, reflecting improved market sentiment. Additiona
Oil prices surged nearly 3% on Monday, driven by reports of a near-total production stoppage in Libya and growing concerns that escalating conflicts in the Middle East could disrupt regional oil supplies.
Key Highlights:
Libya Production Halt:
- Brent crude futures rose by $2.30, or 2.91%, to $81.32 a barrel by 11:48 GMT, while U.S. crude futures increased by $2.22, or 2.97%, to $77.05 a barrel.
- The significant price jump was primarily fueled by the announcement from Libya's eastern-based government, which controls most of the country's oilfields, about the closure of all oil fields, halting production and exports. This government is not internationally recognized, and confirmation from the Tripoli-based National Oil Corporation, which controls oil resources, was still pending.
- Analysts like Giovanni Staunovo from UBS noted that Libya’s production could potentially drop from one million barrels per day to zero, posing a significant risk to the global oil market.
Middle East Tensions:
- Over the weekend, Hezbollah fired hundreds of rockets and drones into Israel, prompting a strong military response from Israel. This escalation in one of the biggest clashes in over 10 months raised fears of a broader conflict in the region, which could further destabilize oil supplies.
- The geopolitical risks associated with this conflict are expected to have a significant influence on oil prices, according to market analysts like Kelvin Wong from OANDA.
Market Sentiment:
- Monday's gains followed a strong performance on Friday, where both oil benchmarks rose over 2%. This rally was partly attributed to the endorsement by U.S. Federal Reserve Chair Jerome Powell of the start of interest rate cuts, boosting sentiment across the commodity markets.
- However, investors are still cautious about the potential actions of the Organization of Petroleum Exporting Countries (OPEC) and its allies (OPEC+), who have plans to raise output later in the year. Any decisions by OPEC+ could further impact oil prices.
Additional Factors:
- A fire at Russia's largest oil refinery in Omsk, Siberia, was reported on Monday, though the refinery stated that it would not affect its production plan and operations were continuing as usual. The cause of the fire was not immediately clear, but any disruptions in Russian oil production could also affect global supplies.
Conclusion: The combination of Libya's production halt and escalating conflicts in the Middle East has significantly driven up oil prices, with the market remaining highly sensitive to geopolitical risks and potential disruptions in supply. Investors are closely monitoring the situation, alongside upcoming decisions by OPEC+ and developments in U.S. monetary policy, which could further influence oil market dynamics in the coming weeks.
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