KUALA LUMPUR – Maybank Investment Bank has maintained its positive stance on Malaysia’s oil and gas (O&G) sector following the Organisation of Petroleum Exporting Countries Plus (Opec+) slashing oil output by two million barrels per day (bpd) in November 2022.
In a research note today, it said the move went against the United States’ plan to see a softer oil price.
“With this move, the oil price will remain elevated. Our US$100 (RM465) per barrel oil price (Brent) estimate for 2022-2023 is unchanged,” said Maybank IB.
It said Opec+ has agreed to cut its production quota by two million bpd in November 2022, as it seeks to spur the oil price, which has recently fallen to US$80 per barrel.
Putting things into perspective, this is by far the biggest cut by the Opec+ group since the height of the pandemic in 2020, said the research firm.
“This move (production cut) in our view makes much sense to the oil-producing states, on economic, operating, and political statement fronts, in light of the tightness in spare capacity and the reality in its collective inability to meet production quota in the past,” it said
Looking back, Opec+ fell about 3.6 million bpd short of its output target in August 2022.
Maybank IB’s buys include Yinson and Dialog. – Bernama, October 7, 2022
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