Rising oil prices will be a boon to the local oil and gas (O&G) sector as production is expected to rise and producers seek to pump more crude from the available and new wells.
Analysts also expect oil companies to free up more of their budget for upstream activities after four years of doldrums and expenditure slashing.
Oanda Corp head of trading for Asia Pacific Stephen Innes said despite the Brent crude price optimism of reaching the US$100 (RM414) per barrel level will be a “short-term phenomenon”, it will facilitate more upstream activity globally.
“Higher oil prices will attract more capital to offshore rigs, which are expensive but profitable near current levels, result in pipeline infrastructure improvement from the US Permian basin, and allow Russia and OPEC to ramp up production
“I think this will be a boon to the industry as a whole and we see the green shoots in Malaysian O&G sector,” he told The Malaysian Reserve (TMR) yesterday.
