KUALA LUMPUR, May 21 (Bernama) -- Bursa Malaysia ended at its intraday low on Thursday as investor sentiment remained cautious amid ongoing foreign outflows, although the recent weakness may present bargain-hunting opportunities in fundamentally sound blue-chip counters. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 9.33 points, or 0.54 per cent, to 1,708.36, from yesterday’s close of 1,717.69. The benchmark index, which opened 3.74 points higher at 1,721.43, hit an intraday high of 1,722.50 in early trade before losing momentum for the rest of the day. Market breadth was negative, with losers outpacing gainers 656 to 508, while 565 counters were unchanged, 989 untraded and 32 suspended. Turnover fell to 3.49 billion units worth RM3.70 billion compared with 4.15 billion units worth RM4.29 billion on Wednesday.
Oil markets are expected to remain elevated despite a temporary ceasefire in the Middle East, as structural supply disruptions continue to constrain global energy flows.
Supply Damage Keeps Oil Prices Elevated
According to UOB Global Economics and Markets Research, Brent crude is likely to hover around US$100 per barrel in the near term, even after a two-week ceasefire.
The reason: extensive damage to energy infrastructure across the region.
- Key assets including refineries, pipelines, and ports have been impacted
- Repairs could take months or even years
- Supply chains remain severely disrupted
Brent previously surged to US$119.50 in late March, before easing to around US$93.69 following ceasefire news.
Strait of Hormuz Bottleneck Persists
The Strait of Hormuz, which handles roughly 20% of global oil and LNG flows, remains a major constraint.
- Hundreds of oil tankers are stranded on both sides
- Shipping routes are being rerouted to alternative ports like Yanbu
- Insurance premiums have surged, discouraging vessel movement
These factors suggest that even with a ceasefire, logistical bottlenecks will continue to limit supply recovery.
Price Outlook: Gradual Normalisation
UOB maintains a cautious outlook for oil prices:
- Q2 2026: ~US$110 per barrel
- Q3 2026: ~US$100
- Q4 2026 – Q1 2027: easing toward US$90
This indicates that while prices may gradually decline, elevated levels will persist in the near term.
Market Implications: Inflation and Energy Risks Remain
Sustained oil prices near US$100 could:
- Keep inflation elevated globally
- Increase input costs for industries
- Complicate central bank policy decisions
The situation underscores how physical supply disruptions — not just geopolitical headlines — are driving oil markets.
Investor Takeaways
- Brent crude is expected to stay near US$100, despite a temporary ceasefire.
- Infrastructure damage and shipping bottlenecks are limiting supply recovery.
- The Strait of Hormuz remains a key chokepoint, with tanker congestion and rising insurance costs.
- Oil prices are forecast to gradually decline toward US$90, but only as disruptions ease.
- Elevated oil prices may sustain inflation pressures and impact global growth.
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