PETALING JAYA: Notwithstanding the volatility, some measure of optimism has returned for crude oil prices, which have firmed up at about US$40 per barrel after plunging into negative territory in April.
But with oil majors in no rush to resuscitate their capital expenditure (capex) spending even if oil prices recover, that would mean less jobs to go around for oil and gas (O&G) service providers.
“Global demand for oil is widely expected to pick up in the second half of the year with economies re-opening (from lockdowns due to Covid-19). For the local oil and gas scene, we are expecting activities to resurface only in 2021, ” Kenanga Research’s Steven Chan told StarBiz.He said the brokerage is still maintaining a “neutral” view on the sector as it is cautious about several companies’ balance sheet and earnings visibility, as well the overall reduction of capex and opex spending by oil majors.
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