Refining Stocks Rally on OPEC+ Output Cut Hope

Stocks in the refining and oil sectors soared on Wednesday as investors bet on an OPEC+ consensus to significantly reduce crude production at their meeting later today.

As of 10.29 a.m.Thai time, the share price of PTT Exploration and Production Pcl. (SET: PTTEP) rose THB2.50/share, or 1.52%, to THB167.50/share, with a trading value of THB448 million.

The share price of Thai Oil Pcl. (SET: TOP) rose THB1.25/share, or 2.43%, to THB52.75/share, with a trading value of THB222 million.

The share price of Esso (Thailand) Pcl. (SET: ESSO) rose THB0.60/share, or 4.62%, to THB13.60/share, with a trading value of THB107 million.

The share price of Bangchak Corporation Pcl. (SET: BCP) rose THB1.00/share, or 3.33%, to THB31.00/share, with a trading value of THB59 million.

At its upcoming meeting, OPEC+ will likely discuss cutting oil production by more than a million barrels per day (bpd), according to OPEC sources on Sunday. This would be the largest action taken too far to address oil market weakness, which has been exacerbated by the Covid-19 outbreak.

The meeting, which is scheduled for later today, comes as oil prices have been decreasing and market volatility has been high for months, prompting the leading OPEC+ producer, Saudi Arabia, to suggest that the group may reduce output.

It was reported that the reduction could be greater than 1 million bpd. One of the sources, quoted by Reuters, mentioned the possibility of a voluntary increase in Saudi Arabia’s output cutbacks.

FSS International Investment Advisory (FSSIA) predicted that the price of Dubai crude oil may climb to over US$90 per barrel if OPEC+ agrees to cut output, and that with a further production reduction, the price might reach US$100 per barrel.

PTTEP, TOP, ESSO, BCP, and SPRC are among the stocks projected to benefit.