KUALA LUMPUR, April 8 (Bernama) -- Bursa Malaysia ended broadly higher, with the benchmark index rising 1.16 per cent to close near the 1,700 mark, supported by positive sentiment following news of a two-week ceasefire between the United States (US) and Iran, which includes Tehran allowing safe passage through the Strait of Hormuz. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) jumped 19.45 points to its intraday high of 1,696.31 from Tuesday’s close of 1,676.86. The benchmark index opened 11.65 points higher at 1,688.51 and touched an intraday low of 1,683.58 in early trade. In the broader market, gainers trounced losers 855 to 410, while 459 counters were unchanged, 941 untraded and 11 suspended. Turnover increased to 3.77 billion units worth RM3.64 billion from Tuesday’s 2.55 billion units worth RM2.58 billion.
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.
Comments
Post a Comment