In recent weeks, the price of crude oil has shot up to above USD100/barrel, driven by the political tension in Iran. Going forward, we face the risk of oil price revisiting its all-time high of USD147/barrel and potentially crashing after that. Should this happen, all vessel operators, shipbuilders, process equipment manufacturers and petrochemical operators will be negatively impacted in the longer term, while those that may be considered safer are the brownfield services providers, CTF operators as well as the fabricators and pipe coaters. Maintain Overweight, with Kencana Petroleum and Dialog Group being our top picks.
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