Local oil stocks rebound as OPEC cuts output

The stocks of local oil companies have reacted well to the OPEC's change in direction

The VN-Index ended the April 23 session 4.99 points or 0.65 per cent higher, at 773.91 points. 195 of the 338 stocks listed on the Ho Chi Minh City Stock Exchange (HSX) ended the session in the green, while the total transaction value of the session reached VND3.292 trillion ($143.13 million), down 22 per cent against the previous session.

The VN30 basket was also rather mixed in the morning session with 16 stocks up and 9 down. Most of them fluctuated slightly within a 1 per cent band.

Hoa Phat Group JSC (HSX: HPG) continued to lead the VN30 with a hike of 3.9 per cent to VND21,600 (94 US cents) per share. Moreover, oil stocks such as PetroVietnam Gas JSC (HSX: GAS), PTSC Thanh Hoa JSC (UPCoM: PSN), Thai Binh PetroVietnam Oil JSC (UPCoM: POB), Binh Son Refining and Petrochemical Co., Ltd. (UPCoM: BSR), and among others have been on the rise despite the great fall in supply and price in the global market.

Specifically, GAS gained 21.15 per cent to reach VND65,400 ($2.84) per share during a month. PSN also rose 39.68 per cent to VND8,800 (38 US cents) per share over a month, POB grew 50 per cent within a week to VND6,300 (27.4 US cents). Additionally, BSR also increased by 9.09 per cent over a month to VND6,000 (26 US cents) per share.

Securities experts said that oil stocks have rallied these days because OPEC members have decided on heavier cuts to output to avoid the oil surplus. OPEC+ previously agreed to reduce production by 10 per cent to 9.5 million barrels per day to boost oil prices. Kuwait on April 23 revealed that it had curtailed the supply before the agreement.

As a result, ending the session on April 23, Brent crude rose 4.7 per cent to $21.33 per barrel while WTI increased 19.7 per cent to $16.5 per barrel. Additionally, the daily crude oil production of the US also reduced by 100,000 to 12.2 million barrels.