Hot stocks: RH Petrogas, Rex International actively traded as oil prices surge

SHARES of RH Petrogas T13 and Rex International 5WH were actively traded on Thursday (Mar 3), after oil surged beyond US$110 a barrel as the market braced for supply disruptions from sanctions imposed on Russia.

RH Petrogas reached a high of S$0.335 at 9.16 am, up 21.8 per cent or S$0.06, with 25.1 million shares changing hands.

Rex International reached a high of S$0.45 at 9.14 am, up 4.7 per cent or S$0.02, with 14 million shares traded.

No married deals were recorded for both counters, according to ShareInvestor data.

As at 9.46 am, shares of RH Petrogas were trading at S$0.32, up 16.4 per cent or S$0.045, with 39.4 million shares changing hands. Meanwhile. Rex International was trading at S$0.44, up 2.3 per cent or S$0.01, with 20.6 million shares traded.

On Wednesday, Brent crude futures peaked at US$113.94 a barrel, before settling at US$112.93, up US$7.96 or 7.6 per cent. US West Texas Intermediate (WTI) crude futures hit a high of US$112.51 a barrel, and closed US$7.19 or 7 per cent higher at US$110.60.

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Prices rose as markets were expecting a shortage of supply amid the sanctions on Russia, which were imposed following its invasion of Ukraine. Various major companies have also divested from Russia oil assets.

Supply concerns were also exacerbated after the Organization of the Petroleum Exporting Countries and its allies (Opec+) agreed to another modest increase in supply for April, by just 400,000 barrels per day, in a meeting on Wednesday.

Members of Opec+ have been struggling to meet delivery quotas amid capacity constraints due to the Covid-19 pandemic.

According to Heng Koon How, head of markets strategy at UOB Global Economics and Markets Research, although Opec+'s decision is not unexpected, it is still disappointing, with market fundamentals for the energy complex having "changed dramatically" since the invasion began.

Given that the energy market is currently "exceptionally uncertain", Heng is not revising forecasts in the near term, but noted that higher crude oil prices may persist over the medium term. He previously targeted Brent crude oil to trade at US$110 per barrel in the first half of 2022.

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