KUALA LUMPUR (Dec 11): Petroliam Nasional Bhd (Petronas) is maintaining a prudent view on the global oil market next year, as revealed in the latest edition of Petronas Activity Outlook for 2019-2021 released today.

In the report, the national oil giant said while the oil market "is on the path to recovery", certain risks remain in place.

Citing data from the International Energy Agency (IEA), Petronas pointed to how monthly crude and petroleum products stocks for Organisation for Economic Co-operation and Development (OECD) countries have risen to just under 2.9 billion barrels — nearing its five-year average level, which indicates an oversupplied market.

It also pointed to four main factors that could affect the oil market, such as the reinstated US sanctions on Iran — which could remove between 1 million and 1.5 million barrels per day (bpd) of oil from the market.

Risks also remain from the geo-political instability in key oil-producing countries such as the economic crisis in Venezuela where production fell by 1 million bpd presently from January 2016 levels, a series of attacks at Libya's and Nigeria's oil facilities, and natural declines in Angola.

Other factors include the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC production coordination and spare capacity, as well as risk of slowdown in oil demand, said the report.

Petronas said it "remains prudent and will continue to adopt lower-for-longer approach until we are confident that the current uptrend is sustainable", while pointing to industry benchmark oil price projection of US$60-US$70 per barrel moving forward.