PETRONAS Chemicals Surges Amid OPEC-Driven Oil Price Rally
PETRONAS Chemicals Group Bhd rose to a three-month high on Monday as Brent crude oil prices surged above US$100 per barrel. The company's shares gained as much as 23 sen or 4.5% to RM5.32, its highest since June 12. Despite this gain, the consensus 12-month target price for PETRONAS Chemicals is RM5.07, implying a potential downside of about 3% from the last price.
The increase in oil prices was driven by renewed conflict in the Middle East, which boosted hopes for higher petrochemical prices and spreads. West Texas Intermediate crude oil also rose to US$103 per barrel. PETRONAS Chemicals, which manufactures olefins, polymers, fertilizers, methanol, and specialty chemicals, has seen its shares rise nearly 50% this year.
However, analysts are cautious of further upside in PETRONAS Chemicals shares after the recent rally. Only nine research houses recommend 'buy' calls among 21, with eight recommending 'hold' and four rating the stock as a 'sell'. Hengyuan Refining Company Bhd and Petron Malaysia Refining & Marketing Bhd also saw gains of nearly 7% and 2%, respectively.