KUALA LUMPUR, Dec 4 (Bernama) -- Bursa Malaysia rallied to close broadly higher on Wednesday amid strong buying interests mainly in utility and technology stocks, with the benchmark index gaining 0.44 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.13 points to 1,614.09 from Tuesday’s close of 1,606.96. The index opened marginally higher at 1,606.97 and moved between 1,606.53 and 1,616.03 throughout the day. Advancers thumped decliners 727 to 381 on the broader market, with 522 counters unchanged, 781 untraded and 10 suspended. Turnover advanced to 3.60 billion units valued at RM3.30 billion versus 3.32 billion units valued at RM3.30 billion on Tuesday.
Oil prices rose slightly on Wednesday as markets awaited a critical OPEC+ meeting, expected to extend supply cuts, while geopolitical tensions in the Middle East and Asia lent additional support to crude prices.
Market Performance
- Brent Crude Futures: Up 19 cents (0.26%) at $73.81 per barrel by 0916 GMT.
- West Texas Intermediate (WTI) Crude: Gained 13 cents (0.19%) to $70.07 per barrel.
- Tuesday Rally: Brent surged 2.5%, its largest gain in two weeks.
Geopolitical Turmoil Supports Prices
Geopolitical tensions continue to influence oil markets:
- Middle East: A shaky ceasefire between Israel and Hezbollah remains fragile. Israel has warned it will escalate attacks into Lebanon if the truce collapses.
- Asia: South Korea’s political crisis, following President Yoon Suk Yeol’s reversed martial law declaration, has added to uncertainty.
- Syria: A rebel offensive threatens to escalate regional tensions, potentially involving several oil-producing nations.
"These geopolitical risks are providing temporary support for crude prices," noted Priyanka Sachdeva, senior market analyst at Phillip Nova.
OPEC+ Meeting Outlook
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, are widely expected to extend voluntary production cuts of 2.2 million barrels per day into the first quarter of 2025.
- Phase-Out Plans: OPEC+ has been gradually phasing out supply cuts but is under pressure to stabilize prices amid weak demand.
- Analyst Views:
- "Prices are likely to stay range-bound unless a new catalyst emerges," said Dilin Wu, research strategist at Pepperstone.
- "Attempts to push oil toward $80 a barrel will be limited by supply checks and loose oil balances," noted Tamas Varga, analyst at PVM Oil.
US Inventory Data and Demand Signals
Mixed inventory data from the U.S. also impacts market sentiment:
- American Petroleum Institute (API) Data:
- Crude inventories rose 1.2 million barrels last week.
- Gasoline stocks increased significantly by 4.6 million barrels, despite the Thanksgiving holiday typically driving higher demand.
- Official Data: The U.S. Energy Information Administration (EIA) will release inventory figures later Wednesday. Analysts expect:
- Crude stock decline of 700,000 barrels.
- Gasoline stock increase of 639,000 barrels.
Resistance Levels and Market Outlook
While geopolitical and OPEC+ factors have provided a lift, oil prices remain capped:
- Resistance at $75: Despite Tuesday’s rally, Brent has struggled to break past the $75 per barrel level.
- Range-Bound Trading: Analysts expect oil prices to remain within a narrow range without a new catalyst.
Conclusion
As OPEC+ prepares for its meeting and geopolitical risks remain elevated, oil prices are likely to see temporary support. However, weak demand fundamentals and inventory surpluses suggest prices may remain constrained in the near term. Markets now turn to Thursday’s OPEC+ decision and U.S. inventory data for further direction.
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