22 August 2014

My Notes on Oil & Gas Sector - August 2014

O&G sector is still growing rapidly as long as there is a need for the Exploration & Production (E&P) companies to continue their R&D as well as production activities when crude oil is higher than US$90.00. It becomes a norm that the crude oil is at higher range as compared to few years back where crude oil suddenly surged from US$40 to US$140 and above and then dropped significantly to US$40 before arrived at US$90 - US$100 level.

From what I read from many research reports written by analysts from various research houses, it shows that the uptrend is still going but maybe a bit loss in momentum. Some analysts prefer the supporting activities such as OSV builders (Nam Cheong etc), liftboat / service rigs providers (Ezion etc) but maintain neutral / negative in rig builders such as Keppel Corp / Sembawang Marine. I do believe that the overall sector would remain strong as long as the needs for crude oil remain solid, as alternatives such as renewable energy still in early stage in R&D.

Below is the crude oil brent price chart of past 10 years:
Source: Nasdaq

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