Dateline 2017-03-17, Malaysia Outlook:
The recent oil prices pull-back will not affect Petroliam Nasional Bhd’s (Petronas) spending given that the local oil major has pegged its capital expenditure (capex) budget at an average US$45 per barrel.
According to Kenanga Research, the Petronas capex was a conservative figure compared with the US government’s Energy Information Administration forecast of US$54 per barrel.
“However, capex and operating expenditure allocations will remain rather selective as Petronas will continue to prioritise on managing its cash flow amid tight capex spending,” Kenanga said in its report this week.
Oil prices have weakened by 9% to US$51.4 per barrel within a week after a few months of stabilisation, largely due to reignited concerns on building oil stocks and revival of rigs count in the United States coupled with the moderation of oil demand growth.