BUSINESS

RHB RESEARCH EXPECTS OIL PRICES TO STABILISE AT US$69 PER BARREL

04/01/2022 01:03 PM

KUALA LUMPUR, Jan 4  -- RHB Research expects oil prices to stabilise at US$69 and US$65 per barrel (bbl) in 2022 and 2023, respectively, while the long-term oil price assumption remains at US$60 bbl.

In a note today, the research house said it expected further downward revisions in crude oil demand by major agencies in the coming months, due to the re-implementation of lockdown measures in response to the emergence of new COVID-19 variants.

“That said, we believe the market will have factored in the impact of Omicron to a certain extent.

“Supply pressures will remain in 2022, but the Organisation of the Petroleum Exporting Countries’ (OPEC) strategy is still very price-positive, especially when oil prices are down, as the cartel is ready to adjust production levels to support prices,” it said.

It also foresees weaker-than-expected oil prices and spending by the oil majors.

The research also anticipates a longer-than-expected recovery for tankers, as the overall petroleum tanker market has been very weak in 2021 due to excess tonnage.

“We believe the turning point could materialise in 2022, given the anticipation of an economic recovery and a gradual increase in OPEC and its allies’ oil production.

“Global oil inventories have been low and rebuilding inventory may also pick up next year,” it added.

As such, RHB Research maintained its ‘overweight’ call on integrated oil and gas segment, premised on the upward revision of activities guidance in the latest Petronas Activity Outlook 2022-2024, which may suggest that recovery in upstream activities should accelerate in 2022.

“We estimate Petronas’ capital expenditure spending to be between RM40 billion and RM45 billion in 2022, with a continuing re-deployment of resources to renewables,” it added.

-- BERNAMA

 

 


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