KUALA LUMPUR, May 5 (Bernama) -- Bursa Malaysia reversed earlier losses to end higher on Tuesday as buying interest gained momentum in the afternoon session, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.66 points, or 0.44 per cent, to close at 1,747.43 from Monday’s close of 1,739.77. The benchmark index, which opened 1.97 points lower at 1,737.80, moved between a low of 1,732.64 and a high of 1,747.82 throughout the day. Market breadth was negative with losers leading gainers 605 to 539. A total of 599 counters were unchanged, 889 untraded, and 11 suspended. Turnover decreased to 2.86 billion units worth RM2.59 billion compared with 3.05 billion units worth RM2.55 billion yesterday.
Oil prices eased modestly on Tuesday after recent sharp gains, as signs emerged that the US is loosening Iran’s control over the Strait of Hormuz, offering limited relief to global supply concerns.
Oil Prices Slip After Strong Rally
Crude benchmarks declined following a surge in the previous session:
- Brent crude fell 1.1% to ~US$113/barrel
- WTI crude dropped 1.9% to ~US$104/barrel
The pullback comes after multi-day gains driven by supply disruption fears, suggesting short-term profit-taking rather than a shift in fundamentals.
Limited Progress in Reopening Hormuz
The US has begun efforts to restore shipping access:
- US Navy escorted vessels through the Strait of Hormuz
- A Maersk-operated ship successfully exited the Gulf
However, analysts stress this remains:
- A one-off development, not a full reopening
- Insufficient to eliminate broader supply risks
The Strait typically carries ~20% of global oil supply, making it a critical chokepoint.
Geopolitical Risks Remain Elevated
Despite the easing in prices, tensions continue to escalate:
- Iran launched attacks on vessels and infrastructure
- A key UAE oil port was reportedly set ablaze
- The situation marks one of the largest escalations since the ceasefire
These developments reinforce the persistent geopolitical risk premium in oil markets.
Supply Tightness Supports Prices
Underlying fundamentals remain tight:
- Global oil inventories are near eight-year lows
- Supply disruptions are ongoing
- Strategic reserves are being drawn down rapidly
Major industry players, including Chevron, warn that physical shortages could emerge globally.
Outlook: Limited Downside, Volatility Ahead
Analysts expect:
- Short-term consolidation after recent gains
- Continued price support from supply constraints
- High sensitivity to geopolitical developments
Any sustained reopening of the Strait would be a key downside catalyst, while further escalation could push prices higher.
Investor Takeaways
- Oil prices eased on profit-taking, not due to improved fundamentals.
- Strait of Hormuz disruptions remain unresolved, keeping risks elevated.
- Global supply is tightening, with inventories at multi-year lows.
- Geopolitical tensions continue to drive volatility in energy markets.
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