Brokers' take

Oil and gas

DBS Group Research, Sept 6

WE raised our oil price forecasts for 2016 and 2017 by US$10 per barrel (bbl) to US$45-50/bbl and US$50-55/bbl respectively. This comes on the back of earlier-than-expected narrowing of the supply-demand gap. We expect the convergence of oil supply-demand trends to gather momentum towards the second half of 2017 and see upside risks stemming from the possibility of heightened tensions in the Middle East, production cuts and change in Opec's stance.

Increasing bankruptcies and merger and acquisition activities are some of the signals of a bottoming in the cycle for oil services companies. We believe there will be more consolidation opportunities in the next six to 12 months as distress builds up in the sector and bankruptcies soar. Capex trends could likely start to rise again by the middle of 2017. We continue to favour Sembcorp Industries for stability as well as potential re-rating in the mar…