Sembcorp Marine (SCMN.SI) and Keppel Corp (KPLM.SI) led Singapore shares higher in Thursday’s morning session as investors bought into the world’s two largest rig makers on expectations oil prices will climb further.
By the midday break, the Straits Times Index (STI) <.FTSTI> was up 6.36 points at 3.214.27. The total value of shares traded in the morning session was $474 million, down from $646.3 million shares on Wednesday.
An abnormally icy winter in the US may lead to lower crude inventories, adding to worries oil prices may creep up to US$100 ($129) a barrel after Kuwait’s oil minister said the global economy could withstand the price level, said Tey Tze Ming, a market strategist at Saxo Capital Markets.
“Oil prices will definitely spike higher in the short term and US$100 is an attractive target for the speculators out there,” said Tey, who tips the STI to see resistance at 3,215 points this afternoon.
Oil rig builders outperformed the broader market, with the FTSE ST Oil & Gas Index <.FTFSTAS0001> up 1% at midday after US Firms such as Diamond Offshore Drilling (DO.N) rose overnight on hopes rising fuel prices would boost demand for oil and gas services.
Sembcorp Marine, the world’s second-largest rig maker, rose 2.1% to $5.32 by the midday break with over 3.8 million shares traded.
Its larger rival Keppel Corp gained 1.3% to $11.18 with over 1.4 million shares changing hands.
Wilmar (WLIL.SI), the world’s largest-listed palm oil firm, fell 1.2% to $5.62, as more investors questioned its diversification into property after it said it would submit a joint bid to buy the land use rights for six sites in China.
Wilmar shares took a hit earlier this month after it announced its initial foray into Chinese real estate.
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