Oil stocks surge inexplicably on the BSE

The shares of several companies in the oil and petrochemical sector have risen sharply in the last week on the Bucharest Stock Exchange, arousing the interest of speculators and leaving analysts wondering, as they can"t come up with any explanations for these moves, given the absence of any news or events that could have caused the moves. Even some of the presidents of these companies were saying yesterday that they had no explanations for the moves of the stocks of their respective companies.

The shares of "Oltchim" Râmnicu Vîlcea (OLT), "Rompetrol Rafinare" (RRC), "Oil Terminal" (OIL), "Petrolexportimport" (PEI) and "Rompetrol Well Services" (PTR) "took off" last week, providing investors with returns between 47% (OIL) and 108% (OLT).

This surprising evolution also continued yesterday, when, after rising 15%, the shares of "Rompetrol Rafinare" fell sharply, closing the day with a loss of 11%, while the shares of "Oltchim" fell 10.01%. This is the first time the stock of OLT fell, after rising for a week and a half.

"Perhaps some investors misinterpreted some news or information that could have impacted these companies", Nicolae Gherguş, the president of "Confident Invest" commented yesterday. He said that in his opinion, there was no news that would justify the "meteoric rise" of these stocks on the Bucharest Stock Exchange, over the last few weeks.

Mihai Chişu, broker at "IFB Finwest", compares the evolution of the five companies, which are active in the oil and petrochemical sector, to that seen in stocks in the fertilizer sector, such as "Amonil" and "Azomureş", which soared in 2008, sucking speculators into the vortex.

Mr. Chişu said:

"One characteristic that these stocks share is the fact that they are being speculated, without any news that would warrant a natural rise. Some time ago we had the rally in fertilizer stocks ... Why wouldn"t something similar happen now? Many speculators can get activated on a certain stock without necessarily having any piece of news or event that sparks the rise. Such a move causes major enthusiasm in the market, but also causes a lot of frustration once it ends. Another shared element for the five stocks is the absence of the extended fluctuation limit, as they can only grow with 15% a day. Such a restriction causes the stocks to rise 15% for several days in a row, whereas an extended fluctuation limit would prevent such a behavior".

Other brokers are saying that the rise of the shares of "Oil Terminal" and "Rompetrol Rafinare" can be explained through the impact that the beginning of exploration in the Black Sea would have on these two companies, as both own terminals.

The presidential administration yesterday announced that president Traian Băsescu welcomed at Cotroceni a delegation of oil companies Exxon Mobil and OMV - Petrom, led by Johnny Lee Hall, executive vice-president of Exxon Mobil Exploration Company. During the meeting, the two companies presented their action and investment plans for the following years in the perimeters concessioned on the Black Sea.

"There have been many pieces of news lately illustrating the interest of foreigners in the Romanian energy sector", one broker who did not wish to be named said, and he added: "Somebody knows something and we will probably find out what in the near future".

Others are trying to make the connection between the signing of the agreement for the "Nabucco" pipeline, and the rise of the stocks of the oil companies; while some furtively mention the interest around the state-owned Azerbaijani company "Socar", which however yesterday (officially) denied any interest in "Oltchim", "Arpechim" and "Petrom".

17.7 million shares of OIL were traded yesterday, representing about 3% of the share capital of the company. On the other hand, shares of OLT and PEI saw modest volumes: 1.4 million shares in "Oltchim" and 954 in "Petrolexportimport". Worth mentioning is the volume of 9.45 million shares of "Rompetrol Rafinare", as, after the tender offer of KazMunaiGaz, the only shares left in the market were those of the owners of privatization vouchers, which nobody had grouped in a large block.