How much will OPEC proposed deal benefit O&M players?

SINGAPORE (Sept 30): CIMB is maintaining its “underweight” call on the Offshore & Marine sector despite the proposed cut in production by the Organization of Petroleum Exporting Countries (OPEC) announced on Friday.

While the surprise deal hinted at the urgent need to rebalance the market, analyst Lim Siew Khee says the deal would help oil prices rally in the short term but with no “real” effect on capex spending by oil majors as overall production appears unchanged.

Prices could still be bogged down at below US$60 per barrel, as Lim highlights lacklustre demand growth and elevated global inventories supporting production deficits.

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