KUALA LUMPUR (Dec 5): Brent crude oil price prices have been projected to be slightly higher for 2018, according to AmInvestment Bank Research, as it raised its crude oil projection to US$55-US$60 per barrel, from US$50-US$55 per barrel in 2017. 

In a note today, AmInvestment Bank Research analyst Alex Goh said the slightly positive outlook follows increased optimism post-continuation of the production quota by the Organization of the Petroleum Exporting Countries (OPEC). 

Furthermore, Goh believes there will not be any further significant uptrend in crude oil prices, given the persistent supply and demand imbalance. 

"Even with the extension of OPEC production quotas until the end of 2018, US crude oil production stubbornly continues to rise, up 15% since the year-low in mid-October to 9.7 million barrels per day," he added. 

However, the price trend clarity is muddled by certain push and pull factors such as OPEC's ability to ensure quota compliance, significant capex reductions, growing adoption of fuel-efficient-cum-electric vehicles, pace of US deregulation under Trump administration, and commitment by major countries, excluding the US, towards the Paris climate agreement. 

AmInvestment Bank Research maintains a neutral stance towards the oil and gas sector, as offshore development prospects remain slow, following Petronas' unchanged view that the direction for crude oil price for the longer term appears to be 'lower for longer'.

"Our top picks are companies with stable and recurring earnings such as Dialog Group and Yinson. Dialog’s earnings visibility is secured largely by the Pengerang Deepwater Terminal project with its enlarged buffer zone, while Yinson’s Ghana floating production, storage and offloading vessel project will provide the earnings momentum over the next 2 years," the research house added.