KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
OPEC+ is reportedly discussing postponing a planned increase in oil production next month as prices have dropped to their lowest in nine months. The group, which includes OPEC members and allies like Russia, had planned to increase output by 180,000 barrels per day (bpd) in October to start reversing their recent 2.2 million bpd output cuts. However, concerns about weak global economic conditions, particularly in China, and volatility in the oil market have led to reconsideration.
Key Highlights:
Potential Delay in Output Hike: Sources from OPEC+ indicated that the planned increase in October might be delayed due to current market conditions. This comes after a loss of production from shutdowns in Libya and a weak demand outlook. While some members were set to proceed with the output increase, the idea of postponing is gaining support amid price volatility.
Factors Contributing to Market Volatility: Oil prices have been pressured by weak economic data from China, the world's largest oil importer, and soft global refining margins, suggesting reduced crude processing by refiners. Additionally, internal conflicts in Libya have caused a significant drop in production, further complicating the supply situation.
Market Reaction and Price Trends: Following the news of a potential delay, Brent crude rose 1% to $74.47 per barrel, but still remained at its lowest since December. The market has been highly volatile, with prices dropping by about 5% on Tuesday on news of a possible resolution to the Libyan conflict. Concerns over China's economic underperformance continue to impact 2024 growth projections and crude import levels.
OPEC+'s decision on whether to delay the output increase will likely depend on ongoing assessments of global economic conditions and oil demand, particularly in China and other key markets.
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