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O&M stocks may decouple from oil prices: analysts

A rebound in floating production contract awards is in sight with cost taking over as the key driver

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Published Mon, Apr 3, 2017 · 09:50 PM

Singapore

A REBOUND in floating production contract awards is in sight but this being fuelled more by cost reductions, say analysts, raises the possibility of offshore and marine (O&M) stock valuations decoupling from oil prices moving forward.

Data released by the Singapore Exchange in early March showed a high correlation of 0.9x between marine and offshore engineering (MOE) share prices and oil prices for the surveyed period from September 2010 through to December 2016.

sembcorp marine

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