New era for oil resonates through Asian region

SEOUL: While the first Organisation of the Petroleum Exporting Countries (Opec) production cuts since 2008 were inked as Asia slept, the winners and losers from the surprise deal are already becoming clear in the region.

United States crude is hugging US$53 (RM236.90) a barrel following Wednesday’s 9.3 per cent surge, the biggest since February, and Goldman Sachs Group Inc is projecting further gains of more than 10 per cent by the end of the first half as the current oil surplus withers into a deficit.

A revival in prices could prove challenging to countries like India and China, which import most of the crude they consume. Yet the region is also home to some of the largest players when it comes to shipping and oil market infrastructure.

“It’s extremely hopeful and optimistic for those traditional manufacturing companies in Asia,” said Samsung Futures Inc commodities analyst Hong Sung-ki.

Asian energy stocks are surging the most in almost 10 months, with exploration companies such as Australia’s Santos Ltd and Tokyo-based Inpex Corp leading gains.

Rig builders are also rallying, amid speculation higher oil prices will encourage further exploration, fuelling demand for drilling equipment.

While the oil price increase may prove a boon for crude-industry support companies, it’s a negative for air carriers, with jet fuel prices jumping to a one-month high in New York. Japan Airlines Co sank the most in nine weeks, as Australia’s Qantas Airways Ltd slipped more than two per cent.

The impact of the Opec deal is being most keenly felt in the government bond market in Asia, with benchmark yields from China to New Zealand tracking Wednesday’s surge in 10-year Treasury rates.