KUALA LUMPUR, July 21 — MIDF Research is maintaining its 2020 crude oil price assumption at US$41 per barrel amid the negative COVID-19 news and slow demand recovery.
In a research note, the research firm said negative developments on the COVID-19 front would continue to dampen oil prices, given that new cases remain elevated in 16 countries that account for 70 per cent of global crude consumption.
Additionally, the decline in oil prices following the decision to ease the production cut by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies is expected to be arrested by declining crude inventories worldwide coupled with a recovery in demand.
“That said, we anticipate the recovery in demand for crude oil in the coming quarters. We also believe that it will not be strong enough to overcome the effect of the ongoing US-China trade war which has taken a back seat post-COVID-19,” it said.
The research firm said it is also maintaining a ‘neutral’ view on both the upstream and downstream sub-segments of the oil and gas industry, due to various events impacting oil price stability, reduction in offshore exploration and production (E&P) capital expenditure, and gradual demand recovery for oil-related products globally.