OIL-LINKED counters slumped even further on Tuesday after oil prices hit fresh lows on Monday.
On Tuesday, Brent, the international crude benchmark, was trading at US$53.33, a recovery from Monday's session when it had fallen to a record low of US$52.66.
West Texas Intermediate, the US crude benchmark, was trading at US$50.18, after flirting below the US$50 psychological barrier on Monday.
As at 2.44PM on Tuesday, rig-builders Keppel Corporation slumped 4 per cent and Sembcorp Marine 3.39 per cent from the previous day's close, trading at S$8.34 and S$3.14 respectively.
Falcon Energy, an offshore marine and oil & gas player, recorded a 3.51 per cent decline, trading at S$0.275, while Vallianz Holdings, an integrated offshore marine solutions services provider in the oil & gas industry, fell 2.6 per cent, trading at S$0.075.
But despite an overall weak market sentiment towards oil-related stocks, Dyna-Mac Holdings, an engineering services provider to the oil and gas industry, gained 3.13 per cent, trading at S$0.33, following a Monday announcement that it had clinched an S$89 million floating production storage and offloading (FPSO) contract from BW Offshore.
In recent months, oil has been on a steady decline due to oversupply from non-Opec (Organisation of the Petroleum Exporting Countries) producers. Since its peak in June 2014, crude has lost more than half its market value.
On Monday, data showing record Russian crude output and oil exports from Iraq (Opec's second largest producer) triggered another fall.
Credit ratings provider Moody's expects oil prices to remain weak through 2015, hitting the bottom-lines of exploration and production (E&P) companies the most, thus reducing cash flow available for their re-investment.
As E&P activity drops and customers negotiate lower prices, many of the offshore drillers will have to renew contracts on their existing rigs at significantly lower rates, and companies will have less backlog and financial flexibility, Moody's said.