RHB Raises Crude Oil Price Forecast to US$75-$90, Maintains ‘Overweight’ on Sector | Money
KUALA LUMPUR, February 14 – RHB Research maintained its call for “overweight” on the regional oil and gas sector and raised its crude oil price forecast to between USD 75 and USD 90 per barrel for 2022-2023, against $70 to $83 earlier.
The research house said the higher crude oil price estimate for the year must reflect heightened geopolitical tensions between Russia and Ukraine and the continued failure to meet the Organization of Countries’ production quota. oil exporters (OPEC).
“We still maintain a relatively lower price forecast at $80-88 per barrel in the second half of 2022 due to higher supply pressure from OPEC+, in line with its production schedule and a potentially stronger rebound. strong in US production levels, as the country’s rig count is still on the rise,” he said in a research note today.
In its latest monthly report, the US Energy Information Administration’s forecast for US oil production in 2022 and 2023 was revised up to 12 million barrels per day (mbpd) and a record 12.6 mbpd versus 11.8 mbpd and 12.4 mbpd.
RHB Research said demand destruction was inevitable for Russia and Ukraine in the event of war.
“Globally, the anticipation of oil prices rising and remaining at such high levels could influence consumer consumption patterns, and the impact appears to be most evident for high-income countries. of the Organization for Economic Co-operation and Development (OECD),” he added. added.
RHB Research expects oil prices to rise to an average of US$100 a barrel in the second quarter of 2022, but still assumes there won’t be massive supply damage in the longer term .
“Oil prices could potentially reach $110-120 a barrel if war materializes, and will stay higher for longer – depending on the magnitude of the event,” he added.
RHB Research is “overweight” in the oil and gas sectors of Malaysia and Thailand.
He noted that exploration and production, as well as petrochemical companies, should continue to enjoy strong earnings while benefiting from higher commodity prices, while service providers should gradually benefit from a recovery in trading. activities and an increase in national capital expenditure. — Bernama