Oil tops US$50, but no cheer yet for O&M sector

Singapore

OFFSHORE & marine (O&M) counters will continue to experience earnings and margins pressure despite signs of sustainable oil price recovery.

Analysts from UOB Kay Hian and Maybank Kim Eng pointed to limited upside for the O&M sector in 2016 even as oil prices breached US$50 last week boosting hopes of a rebound in offshore exploration and production (E&P) activity levels especially in deeper waters.

Oil and gas (O&G) companies are expected to prioritise offshore over onshore E&P, according to a June 2016 UOB Kay Hian Singapore Strategy research note. The consensus among O&G companies is…