KUALA LUMPUR (March 15): Petroliam Nasional Bhd (Petronas) sees a correction in oil prices this year amid prolonged uncertainty in the market as the Middle East conflicts persist, said its president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz.
"We anticipate average prices to hover around US$73 per barrel in the near term and at US$63 per barrel in the long term for this year.
“We do see a correction because of the environment that we are seeing today, the elevated uncertainty around the Middle East,” he told reporters on Friday after the release of Petronas’ 4QFY2023 results.
The price jump in the fuel market following the sudden escalation of conflicts in the Middle East in October 2023 has since waned. Crude oil prices have softened and remained largely steady since.
At the time of writing, Brent crude futures slipped 0.6% to US$84.83 per barrel after topping US$85 per barrel for the first time since November on Thursday while US West Texas Intermediate crude slipped 0.6% to US$80.70 per barrel.
It was on track to gain over 3% for the week, boosted by the International Energy Agency's forecast of higher 2024 oil demand and an unexpected decline in US stockpiles, Reuters reported. Also supporting prices were Ukrainian strikes on Russian oil refineries that caused a fire at Rosneft's biggest refinery.
Before the IEA raised its forecast on Thursday — its fourth since November last year as Houthi attacks disrupted Red Sea shipping — oil prices were range-bound for most of February, at between US$80 to US$84 per barrel.
The IEA is expecting world oil demand to rise by 1.3 million barrels per day (bpd) this year up 110,000 from last month, but still significantly lower than the 2.3 million bpd recorded last year.
It is also expecting a slight supply deficit should OPEC+ members sustain their output cuts. It previously forecast a surplus situation.
Read also:
Petronas posts lower FY2023 earnings as 4Q profit drops 32%, plans RM32b dividend for FY2024
Petronas confirms scaling down operations in Mexico but yet to decide on a full exit
Petronas to learn how to develop offshore wind energy from Gentari's investment in Hai Long, says CEO
Petronas sets capex at RM50b-RM60b for FY2024
LNG Canada to make first shipment by the end of this year, says Petronas CEO