And what happens to us bottom feeders?
Dateline 2018-10-04, Sun Daily:
IS the decision by Petroliam Nasional Bhd (Petronas), to pay a sharply higher dividend this year to the Federal Government financially prudent and sustainable in the medium term?
Buoyed by a stunning 71.5% jump in net profit to nearly RM23 billion for the first half of this year, the national oil company announced it will pay RM24 billion in dividends to the Federal Government this year – a 50% hike from the RM16 billion level last year.
Higher dividends are financially feasible this year because oil prices have increased markedly and are likely to remain elevated in the short term.
This is due to the combined impact of US sanctions against Iran – resulting in possibly 1.5 million barrels per day (bpd) withdrawn from the market effective Nov 4 this year – hiccups in Venezuela’s oil production and major producer Saudi Arabia’s inability or refusal to raise output immediately to meet this shortfall in supply.
On Monday, Brent crude oil futures closed at US$84.98 (RM351.81)/barrel. Post settlement, prices strengthened to US$85.45 – the first time that prices exceeded the US$85 level since November 2014.