High and tight
A failed attack on a Saudi refinery is only the latest event pushing prices up
W
HAT A DIFFERENCE a year makes. On March 6th 2020 Saudi Arabia and Russia failed to agree on a deal to restrain production. A price war ensued, with the two giants unleashing millions of barrels of crude just as covid-19 prompted lockdowns and demand dried up. Now Saudi Arabia and other producers are curbing output as demand rises. The price of Brent crude, the international benchmark, briefly climbed above $70 a barrel on March 8th for the first time since May 2019. It dipped a little thereafter, to $68 on March 10th.
BIMB Securities Research O&G analyst Azim Faris Ab Rahim said that local activity will pick up in 2022, regardless of the price of oil. He believed the lack of investment from 2015 to 2020 will translate into more projects maturing within the next few years.
PETALING JAYA: The unstoppable streak of the oil price rally may seem like the end of the tunnel is near for the oil and gas (O&G) sector.
But amid the optimism that the market is pricing in, experts that are monitoring the sector closely believe that it is not yet all rosy.
Forecasting thunderstorms ahead, analysts and economists believe Brent crude oil has run ahead of its fundamentals as it surged above US$70 per barrel, saying that current prices are unsustainable.
Saudi Arabia's energy minister said on Thursday that the situation in the oil market had improved but the outlook for a recovery in demand remained uncertain.