KUALA LUMPUR, June 24 — AmBank Research has maintained its overweight rating on the oil and gas (O&G) sector for the next 12 months as crude oil prices have risen by 74 per cent to the current US$75 per barrel from an average of US$43 per barrel in 2020.
In a note today, the research house said the rise supports a global resurgence in capex rollouts and structural re-rating prospects of independent exploration and production (E&P) producers and service providers.
“This is further underpinned by our eight buy calls versus only one sell for Serba Dinamik Holdings Bhd, given the accounting issues raised by its own auditor,” it said.
AmBank recommended Hibiscus Petroleum — a pure E&P operator with concessions in Malaysia, Vietnam and United Kingdom for its direct exposure to higher crude oil prices.
“We continue to like Dialog Group for its resilient non-cyclical tank terminal and maintenance-based operations.
“We also like Yinson’s strong earnings growth momentum from the full-year contributions of floating production storage and offloading (FPSO) vessels Helang, off Sarawak, Abigail-Joseph in Nigeria and Anna Nery in Brazil, together with multiple charter opportunities in Brazil and Africa,” it said.
Ambank also recommended Sapura Energy as the group’s completed RM10 billion debt restructuring package positions it to secure fresh global orders, while Petronas Gas offers highly compelling dividend yields from its optimal capital structure strategy and resilient earnings base.
“The global oil demand is set to return to pre-pandemic levels by the end of 2022, rising 5.4 million barrels per day (mb/d) in 2021 and a further 3.1 mb/d next year,” the research house said, citing the International Energy Agency (IEA) June report.
It said the widening supply and demand gap paves the way for a further easing of the Organisation of the Petroleum Exporting Countries and its allies (Opec+) supply cuts or even sharper stock draws.
The global oil supply is expected to grow at a faster rate in 2022, with the United States driving gains of 1.6 mb/d from producers outside the Opec+ alliance.
“That leaves room for Opec+ to boost crude oil production by 1.4 mb/d above its July 2021–March 2022 target to meet demand growth,” it said. — Bernama
