KUALA LUMPUR (Sept 25): Malaysian energy stocks climbed on Thursday, extending their gains into the eighth straight day, riding on oil price recovery.

The Bursa Malaysia Energy Index, which tracks 31 companies including services and equipment firms, outperformed all other sectors as crude oil prices tested a seven-week high following an unexpected drawdown in US inventory that added to supply worries.

Velesto Energy Bhd (KL:VELESTO) climbed more than 6%, offshore services provider Bumi Armada Bhd (KL:ARMADA) rose 4.4%, and Lianson Fleet Group Bhd (KL:LFG), which operates a fleet of support vessels, edged up 2% on Thursday.

Among index heavyweights, Dialog Group Bhd (KL:DIALOG) closed unchanged, while Yinson Holdings Bhd (KL:YINSON) was down 2%.

Some analysts do not see the Energy Index’s rise being tied to oil price movements but instead point to improved sentiment across the broader market.

The improved sentiment is particularly so for small-cap counters, BIMB Securities analyst Azim Faris Ab Rahim noted. The FBM Small Cap Index (which covers the Main Market’s top 98% companies excluding those on the FBM Top 100 Index) and the FBM ACE Index (comprising ACE Market-listed counters) also climbed to seven-month highs on Thursday.

Meanwhile, an analyst who wished to remain anonymous pointed to recent gains of renewable energy counters following the announcement of Large-Scale Solar 5+ (LSS5+) winners.

“Names like Solarvest Holdings Bhd (KL:SLVEST), Samaiden Group Bhd (KL:SAMAIDEN), and Pekat Group Bhd (KL:PEKAT) have rallied on optimism following the LSS5+ awards, which have lifted sentiment beyond the traditional oil and gas counters," the analyst said.

Solarvest and Samaiden are both constituents of the Energy Index, while Pekat is listed on the ACE Market. Since early September, shares in Solarvest have climbed 19.9%, followed by Pekat (12.96%) and Samaiden (8.77%).

Analysts said the outlook for the oil and gas sector remains unchanged. Following seasonal trends, offshore activity is expected to pick up on a quarter-on-quarter basis in the third quarter.

Projections for Brent, the global benchmark for crude oil, remain unchanged. Analysts forecast Brent to average US$65-US$68 per barrel in 2025.

Meanwhile, the US Energy Information Administration expects Brent prices to decline in coming months, falling from US$68 in August to average US$59 in the fourth quarter, and around US$50 in early 2026, according to a note earlier in September.