O&G stocks are at best trading plays post-Opec cut: UOB Kay Hian

Singapore

OIL and gas (O&G) counters remain at best trading plays despite Opec's (Organization of the Petroleum Exporting Countries) agreement to cut production, lifting sentiments in the sector, a UOB Kay Hian research note said.

UOB Kay Hian in its Dec 9 sector update cautioned against shipyards not being able to replenish their order books even after O&G capital expenditure recovers. The brokerage noted production orders are expected to take centre stage on an O&G capex rebound.

Within the O&G production space, the two leading yard groups in Singapore - Keppel Offshore & Marine and Sembcorp Marine - were historically most active in converting floating p…