The oil price outlook will hover around $50s to $60s per barrel, Malaysia’s Petronas said in its Activity Outlook 2018-2020.
“The majority of analysts agree that $100 per barrel is now a thing of the past,” said the report.
Petronas analysts expect that in the short term, crude oil prices will remain volatile as traders may take position to capture opportunities from gyration of oil prices.
Any geopolitical events can also push up oil prices as the market is still rebalancing, Petronas believes.
“Since November last year, oil price has improved driven largely by sustained compliance by OPEC and non-OPEC members to the agreed production output cut of 1.8 million barrels per day, pledged in November 2016. In the last week of October 2017, Dated Brent oil price has strengthened to above $60 per barrel driven by geopolitical events in the Middle East,” said the report.
For oil and gas companies with integrated Upstream and Downstream business portfolio, the impact of low oil price can be cushioned, Petronas believes.
“In the refining sector, lower crude oil prices would reduce the cost of feedstock, and this would strengthen refining margin. Similarly, with low retail prices, consumption of petroleum products increases and this would boost revenue. Integration with petrochemical operation would further add value and improve profit margin,” said the company.
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