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Technical View · Asian markets slumped last Friday, weighed down by the threat of trade war. · Moving in tandem, the FBMKLCI dropped 4.79 points (0.26%) to close at 1856.07. · Market Breadth was negative with 656 losers outpacing 291 gainers, while 411 traded unchanged. · Expect range-bound hovers for weeks ahead between 1,883 (R1) and 1840 (R2) as technical pictures of the local benchmark index appears directionless. · Should (R1) be decisively taken out, expect higher resistance at 1,909 (R2). Conversely, expect a lower support at 1,798 (S2), should (S1) fail to hold. KENANGA
below snippet from UOB report, received this morning
Key O&G prices and outlook. According to Petronas, Brent prices averaged US$54/bbl in 2017 (2016: US$44/bbl). For gas, LNG long-term price (based on JCC benchmark) was >US$8/MMBtu. Pockets of supply disruptions, OPEC’s production cuts and inventory drawdowns are all supporting the market rebalancing. According to IEA, 4Q17 global supply was 98.0m bpd vs expectations of 1Q18 global demand at 97.8m bpd. Along with sentiment of Saudi Aramco’s potential IPO, oil prices firmed up to US$60-70/bbl currently. While we note that Petronas’ 2018 price assumption of US$52/bbl is below consensus’ forecasts of US$64/bbl for 2018 and 2019, this is actually aligned to global oil majors’. For instance, BP’s cash breakeven is US$49/bbl although it has a 5-year forward curve to long-term assumption of up to US$75/bbl. The “lower forever” mindset will persist as the strength in cash flow becomes a competitive edge among industry players. Petronas’ 4Q17 operating cash flow generation (OCF)-to-capex outflow ratio of 1.6x was in line with peers’ average of 1.65x. Oil majors are still conservatively guiding for continuous growth in production under a slight uptick in capex as well as cost control.
Petronas discovers new oil and gas from Boudji-1 exploration well in South Gabon, West Africa
KUALA LUMPUR: Petroliam Nasional Bhd subsidiary, PC Gabon Upstream SA, has discovered new oil and gas from its Boudji-1 exploration well in South Gabon, West Africa.
The discovery marks a significant milestone for Petronas as it expands upstream growth in exploration and deepwater operation in West Africa, it said in a statement.
Petronas said the ultra-deepwater exploration well, drilled in water depths of 2,800 metres, encountered 90 metres of gross high quality hydrocarbon-bearing pre-salt sands.
“The discovery in Gabon is an encouraging development for Petronas, as we continue to pursue growth activities beyond Malaysia, in line with the strategy to expand our core oil and gas business by growing our resource base,” said Petronas executive vice president and upstream chief executive officer, Datuk Mohd Anuar Taib.
“Aside from boosting Gabon’s oil and gas industry, this discovery will also spur further growth activities in the region, and complements our achievements towards building a significant deepwater portfolio globally,” he added.
Petronas, together with the Ministry of Petroleum & Hydrocarbons, Gabon, will conduct an assessment to further determine the commerciality of the resource volume.
PC Gabon Upstream is the operator for Block F14 (Likuale), with Australia’s Woodside holding a 30 per cent participating interest.
Further strengthening the company’s presence in West Africa, Petronas recently signed a farm-out agreement (FOA) with Australia’ FAR Ltd for a 40 per cent interest in the offshore petroleum licenses of Blocks A2 and A5 located offshore Gambia.
To-date, Petronas’ deepwater portfolio includes partnerships in the Gumusut-Kakap, Malikai and Kikeh deepwater fields located offshore Sabah.
Additionally, there are two new upcoming deepwater development projects in the portfolio – the Limbayong field in Sabah and the Kelidang Cluster in Brunei.
Petronas’ global upstream reach continues to expand to Mexico with the winning of six deepwater blocks in bidding round 2.4, positioning Petronas as the second largest gross acreage holder in offshore Mexico with a total of nine blocks.
Petronas ready to work with state-owned O&G companies
KUALA LUMPUR: National oil corporation Petroliam Nasional Bhd (Petronas) is prepared to work with state entities to develop oil and gas (O&G) resources, provided it is based on the regulatory framework.
Sarawak last year set up Petroleum Sarawak Bhd (Petros) to venture into upstream O&G activities. Sabah also has a similar state-owned entity, Sabah International Petroleum Bhd, which was set up in 2014.
“For us there is no problem as long as the current framework with the Petroleum Development Act is in place. We would like to work with Petros if they want to be a service provider or PSC (production sharing contract) contractor,” Petronas president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin said at a briefing recently.
He said the nature of Petronas’ collaboration with state O&G entities would have to be resolved between the federal and state governments.
Earlier, Wan Zulkiflee highlighted Malaysia’s unique advantage of having a single point of contact for foreign investors when it comes to the development of its O&G resources.
“Our regulatory environment is very special. Petronas is the single point of contact for any foreign company. If we go to other countries, the point of contact is not always consistent.
“There can be misalignment in terms of what the ministry wants, what the regulator wants, etc. We don’t have that in Malaysia. I can say this because we are involved in many, many countries,” he said.
Wan Zulkiflee said the Malaysian Petroleum Management unit in Petronas, headed by Muhammad Zamri Jusoh, can help investors on a wide range of matters including their development plans, securing rigs, operational problems and audit.
“Very few regulators have the experience of a contractor. Zamri and his team have hands-on practical experience as a contractor. I think this is one of the unique value propositions that we have in terms of ease of doing business in Malaysia,” he added.
Oil demand growth to shift to petrochemicals away from motor fuels — IEA - Reuters
LONDON (March 5): Strong global demand for oil and gas will shift in the next five years towards petrochemicals and away from motor fuels gasoline and diesel, the International Energy Agency (IEA) said on Monday.
Demand for products ranging from fertilisers to plastics and beauty products would drive roughly a quarter of the expected oil demand growth to 2023, the IEA said in its five-year outlook.
This would bolster more anaemic growth in gasoline and diesel, also known as gasoil, as fuel efficiency and declining developed world consumption takes its toll, it said.
World oil demand is expected to rise by 6.9 million barrels per day (bpd) to 2023, or 1.2 million bpd per year, it said, with a quarter of this growth, or 1.7 million bpd, coming from demand for petrochemical feedstocks ethane and naphtha.
"Global economic growth is lifting more people into the middle class in developing countries and higher incomes mean sharply rising demand for consumer goods and services," the IEA said.
"A large group of chemicals derived from oil and natural gas are crucial to the manufacture of many products that satisfy this rising demand," it added.
Naphtha is made by oil refineries processing crude, but other petrochemical feedstocks — ethane or liquefied petroleum gas (LPG) — largely bypass the refining industry.
The boom in US shale oil boom has dramatically expanded the availability of ethane, and a string of new projects on the US Gulf Coast are underway to process it.
In total, the world is expected to add 1.4 million bpd in new petrochemical-producing steam crackers to 2023, the IEA said.
Demand for ethane would expand the fastest pace in the next five years, rising by 885,000 bpd, followed by naphtha with growth of 495,000 bpd and LPG with growth of 40,000 bpd, it said.
Jet fuel, supported by growing demand for air travel, would grow by a 1.2% to 2023, the IEA said.
But it said demand for gasoline and diesel would rise by 0.7% each, with expansion slowed by fuel efficiency standards that now cover two thirds of the world's top car markets.
More than 80% of global car sales are now in markets covered by efficiency standards, including China, India the United States and Europe. The IEA said this "will impact strongly on future oil demand."
Oil prices climb ahead of OPEC meeting with US shale firms
SEOUL: Oil prices rose on Monday ahead of a meeting between OPEC and U.S. shale firms in Houston, raising expectations that oil producers would discuss further how to clear a global oil glut.
International benchmark Brent crude was up 19 cents, or 0.3%, at $64.56 a barrel by 0752 GMT.
U.S. West Texas Intermediate (WTI) crude rose 17 cents, or 0.28%, to $61.42 per barrel.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) and other global oil players are set to gather in Houston as CERAWeek, the largest energy industry conference, begins on Monday.
OPEC Secretary General Mohammad Barkindo and other OPEC officials are expected to hold a dinner on Monday with U.S. shale firms on the sidelines of the conference.
“OPEC and Non-OPEC alliance remain at record high compliance, but with Russia continually pressuring for an exit strategy, OPEC will look to offer an olive branch to U.S. shale,” said Stephen Innes, head of trading for the Asia-Pacific region at futures brokerage OANDA in Singapore.
“As such, we should interpret any positive developments from the meeting as support for underlying oil price sentiment.” Suhail Mohamed Al Mazrouel, the United Arab Emirates oil minister and OPEC’s current president, said on Sunday that the oil cartel has not discussed rolling over production cuts until next year.
Rising U.S. shale oil production has been a drag on the OPEC’s commitment to erode a prolonged global oil glut and prop up prices.
U.S. crude oil production has already risen past that of top exporter Saudi Arabia, to 10.28 million barrels per day (bpd).
Only Russia pumps slightly more, but the International Energy Agency (IEA) said last week it expects the United States to take Russia’s seat as the world’s biggest crude oil producer by 2019, at the latest.
The number of oil rigs drilling for new production in the United States rose to 800 for the first time since April 2015 in early March, pointing to more increases in output to come.
Speculators raised their bullish bets on U.S. crude futures and options in the week to Feb. 27 for the second consecutive week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Money managers also upped their bullish bets on Brent crude, InterContinental Exchange (ICE) data showed. - Reuters
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Ratna NinjaGal
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Oh oh, heaven knows
We belong way down below