OIL & GAS 
[%bNqh%] [%nPGT%] [%gOTL%] 
Research by Kenanga
Overweight 

“Opportunities in Mid-stream and Upstream”

We maintain OVERWEIGHT on the sector. We keep our Brent crude oil price forecasts at USD84/bbl and USD79/bbl for CY24 and CY25 based on the assumption that OPEC+ will discontinue production cuts by the end of CY24 and gradually ramp up production in CY25. These oil price levels are supportive of local upstream investment, especially considering the under-investment by producers in the early 2020s. We favor owners of offshore supply vessel (OSV) and jack-up rigs on favourable rates on the back of a supply crunch and the midstream storage segment due to arbitrage opportunities arisng from a contango in the oil market and oil traders having to structurally hold higher inventories as part of supply-chain risk management amidst heightened geo-political tensions. 

Analyst(s):
Lim Sin Kiat, CFA
[%heAs%]

OIL & GAS 
$KLSE-DIALOG $KLSE-PETDAG $KLSE-VELESTO 
Research by Kenanga
Overweight 

“Opportunities in Mid-stream and Upstream”

We maintain OVERWEIGHT on the sector. We keep our Brent crude oil price forecasts at USD84/bbl and USD79/bbl for CY24 and CY25 based on the assumption that OPEC+ will discontinue production cuts by the end of CY24 and gradually ramp up production in CY25. These oil price levels are supportive of local upstream investment, especially considering the under-investment by producers in the early 2020s. We favor owners of offshore supply vessel (OSV) and jack-up rigs on favourable rates on the back of a supply crunch and the midstream storage segment due to arbitrage opportunities arisng from a contango in the oil market and oil traders having to structurally hold higher inventories as part of supply-chain risk management amidst heightened geo-political tensions. 

Analyst(s):
Lim Sin Kiat, CFA
limsk@kenanga.com.my