KUALA LUMPUR, Dec 21 (NNN-BERNAMA) – Analysts have forecast that, Malaysia’s oil and gas sector will stay buoyant in 2024, underpinned by resilient investment and oil prices.
Maybank Investment Bank said, in its recent report that, it expects Brent oil prices to remain elevated in 2024, with in-house oil average selling price estimate unchanged at 80 U.S. dollars per barrel.
“The oil markets will continue to face the energy tri-lemma in 2024, of an improvement in demand; supply tightness (due to structural under-investments); and potential geopolitical risks,” said the research house.
On expectations of a prolonged elevated crude oil price environment, it also expects Malaysia’s state-owned oil and gas firm Petroliam Nasional (Petronas) capital expenditure (capex) to be buoyant in 2024.
Meanwhile, Hong Leong Investment Bank Research, in its recent note, maintained the positive views on the oil and gas sector with Brent oil price forecasts for 2024-2025 at 80-85 U.S. dollars per barrel.
The price forecasts are supported by continued production cuts from the Organisation of the Petroleum Exporting Countries (OPEC), at least until mid-2024, geopolitical uncertainties, anticipated diminishing supply growth from the United States in 2024, and restocking drive of the U.S. strategic petroleum reserve (SPR).
According to the research house, the ongoing global offshore capex drive, as well as, rising local upstream activities from Petronas are expected to underpin the performance of oil and gas services and equipment (OGSE) providers, which are well-positioned to ride on the ongoing upstream capex upcycle.
AmInvestment Bank also said in a note that, it forecast Brent oil price of 90 U.S. dollars per barrel for 2024.
While significant uncertainties around global economic outlook may weigh on oil demand, the research house believed the production cuts by OPEC+ are expected to result in further inventory draws, thus supporting oil prices in the near term.
It also expects to see seasonally stronger oil and gas contract flows, in the fourth quarter of 2023, broadly in line with Petronas’ historical quarterly capex spending trends.
Meanwhile, UOBKayHian said, higher activities may sustain in the sector, as local oil and gas production is targeted to ramp up to two million barrels per day peak level by 2025.
Its oil prices forecast for 2024 stands at 95-100 U.S. dollars per barrel, as it expects the OPEC+ coalition to maintain a tight oil supply.– NNN-BERNAMA
