Home » Broker warns OPEC to increase production capacity, affecting PTT-PTTEP shares in short-term, recommends slow down investment

Broker warns OPEC to increase production capacity, affecting PTT-PTTEP shares in short-term, recommends slow down investment

by archyw

Broker estimates OPEC to increase oil production by 400,000 barrels per day from next month This directly affects the upside of world oil prices and PTT-PTTEP shares, suggesting short-term investment slowdown, but the medium-long term is still interesting to find a time to collect and add one more TOP.

Reporters reported that After the meeting of oil-exporting countries and allied nations (OPEC Plus or OPEC+) on July 18, 64, in the past, where the meeting resolved to increase oil production to a total of 2.0 million barrels per day (mbd) by gradually increasing the average monthly increase of 0.4 MBd. From Aug. to Dec. 64 to support rising oil demand

In addition, OPEC+ also resolved to end its oil production cuts policy by Sept.22. OPEC+ will hold a monthly meeting to consider further market conditions. OPEC+ also views that the fundamentals of the global oil market remain. strong Considering the oil demand that has begun to show signs of recovery and a decline in oil inventories in the Organization for Economic Co-operation and Development (OECD) countries. In addition, economies in many regions of the world have begun to recover. After the COVID-19 vaccination program go fast

OPEC+ has agreed to raise the group’s minimum oil production threshold from the current 43.9mbd to 45.5mbd from May. 65 onwards, with a resolution to increase the UAE’s oil production quota to 3.5mbd from the current 3.2mbd, while the Saudi Arabia and Russia’s minimum production quota will increase to 11.5mbd from the current 11.0mbd. The low of Iraq and Kuwait will increase by 0.15mbd.

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The leading analysts have their views on the results of the OPEC+ meeting that are interesting as follows:

Asia Plus Securities Co., Ltd. (ASPS) estimates that OPEC+’s capacity increase will increase crude oil supply in the world market. This will be a factor that limits the upside of world crude oil prices. and create negative factors for oil stocks such as PTTEP (target price 144 baht) and PTT (target price 48.5 baht).

but in the medium-long term Based on strong oil stock fundamentals, crude oil prices have exceeded ASPS’s assumption of $60/barrel. While oil share price is still Laggard, crude oil price is high (Crude Oil +42%ytd, PTTEP +1.8%ytd, PTT -13%ytd), so it is recommended to find a time to accumulate investment.

KTBST Securities Public Company Limited (KTBST) revealed that it has a neutral view on this news. He believes that even in the short term, oil prices may be pressured by plans to increase oil production. But we see that oil prices in the long run will be less volatile due to the clarity of the announced policy.

Our Dubai crude oil price assumptions remain unchanged at $64/barrel in 64 and $65/barrel in 65 and our investment weight remains the same. “Over the market” for the energy sector and likes TOP (BUY/target price 72.00 baht) the most, believing that TOP will benefit from a recovering crack spread in the second half.64


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