KUALA LUMPUR: Maybank Investment Bank Bhd (Maybank IB) expects Brent crude oil prices to be volatile and weaker this year, averaging at US$70 (RM313) per barrel compared to US$80 per barrel last year.
In a note today, it said oil markets may see a supply surplus as the Organisation of the Petroleum Exporting Countries and its allies (Opec+) may unwind production cuts.
The investment bank cited the United States Energy Information Administration’s Short-Term Energy Outlook report for November 2024, which stated that Opec+ producers may execute their plan to increase output by 2.2 million barrels per day over an 18-month period, starting in April 2025.
“However, any spike in geopolitical tension could raise war premiums on crude oil prices in fear of a supply disruption as we saw during the Russian-Ukraine crisis – where oil prices increased by approximately 50% (Brent: US$80 per barrel to US$120 per barrel),” it added.
For Malaysia, Maybank IB said a potentially lower Petronas capital expenditure (capex) spending means that many domestic-centric upstream oil and gas services and equipment (OGSE) names may see slower growth in 2025 after Petros has been officially appointed as the sole gas aggregator for Sarawak.
“Under a Petronas capex deferral scenario, we expect this to impact OGSE names with exposure in the exploration and development sub-segments – mainly offshore support vessels, offshore fabrication, drilling rigs and hook-up and commissioning,” it said.
Overall, Maybank IB has maintained its positive call on the sector, favouring defensive midstream companies with Dialog as its top pick.
Additionally, it favours floating production storage and offloading players which are poised to ride on the global deep and ultra-deepwater capex investments, naming Bumi Armada as its top pick. – Bernama
