THE recovery in the oil and gas (O&G) sector will be slow and gradual, and uncertainties still linger on the supply side.
A Kenanga Research report says it has retained its 2021 average Brent crude price assumption of US$50 per barrel, and opines that sustained Organisation of Petroleum Exporting Countries (Opec) production cuts are imperative to prolonging oil price’s stability.
The research unit points out that supply side uncertainties include Opec’s commitment to maintain production cuts, the resurgence of Libyan oil which may add up to 1.3 million barrels per day (bpd) of global oil output, the possible lifting of the Iran sanctions under the Joe Biden administration which may reintroduce another one million bpd of oil exports, and a potential jump in shale oil production if oil prices breach past their breakeven point of US$55 per barrel.
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