More pain ahead in oil and gas despite Opec boost

Oil uncertainty: People carrying umbrellas walk by Opec headquarters in Vienna. It remains to be seen if Opec members can commit to the group’s pledge for oil production cut. — REUTERS

PETALING JAYA: Oil and gas (O&G) counters on Bursa Malaysia rallied strongly in the two days following the surprise agreement by the Organisation of the Petroleum Exporting Countries (Opec) to cut oil production by 1.2 million barrels a day, a move which is expected to improve crude prices for the longer term.

However, current fundamentals in the industry point to a short-lived rally. This is because another round of kitchen sinking is expected due to the overall weak market environment during the fourth quarter (Q4), analysts cautioned.