Fixing of floor price for oil bodes well for Malaysia

Dateline 2018-12-14, The Star:

Amid an uncertain oil and gas (O&G) environment, it would seem that a floor price for crude oil has been fixed at US$60 per barrel since the collective agreement by global oil producers to cut supply.

This development bodes well for Malaysia, both the government and local O&G industry players, as it signifies some clarity ahead.

While the crude oil price assumption of US$70 per barrel used for the tabling of Malaysia’s Budget 2019 may be high, it is still well within the US$60 to US$70 per barrel range. Tumbling crude oil prices would create increasing challenges for the government to finance Budget 2019.

According to the recently published Petroliam Nasional Bhd (Petronas) Activity Outlook for 2019 to 2021, Petronas has raised its assumed oil price on a planning basis to between US$60 and US$70 per barrel for 2019.

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