Brent oil prices to trade between US$60-US$65 per barrel in 2020
prices which the industry cannot afford to lose again, especially so after 2 years of depressing CPO prices.”
The acute shortage of workers, Soppoa said, has resulted in poor crop recovery from the harvesting operations as the harvesting intervals are being extended from 25- 40 days or more instead of the normal 10-12 days cycle, hence incurring crop losses and substantial monetary loss in revenue for both the industry and Government alike.
“Low CPO prices over the last 2 years also adversely affected many palm oil companies to incur business losses and the industry is still recovering from the earlier depressed CPO prices.
“The delays in fertilisers application and field husbandry work has reflected in lower yields achieved so far due to lesser agronomy inputs during the low CPO prices and hence need more time to recover and stabilise for the plantation sector.
“Thus, Soppoa requests that the government should defer any increase in wages of any kind including minimum wage for Sarawak as most industries have suffered considerably during the country economic slowdown over the last two years.”
Soppoa
KUCHING: Brent oil prices have been projected to trade within the range of US$60 to US$65 per barrel (bbl) in 2020 as the oil market will likely remain in oversupply throughout the year.
According to Affin Hwang Investment Bank Bhd (AffinHwang Capital), the Brent oil price started the year 2020 on a bullish note sparked by geopolitical tensions following a US air strike attack killing Qassem Soleimani, a top Iran general official and deputy commander of an Iranian-backed militia group.
“As a result, Brent prices soared to a high of US$70 per bbl, as the market deliberates the prospects of a prolonged Middle East crisis that could lead to constrained oil supply,” the research firm said.
“We expect Brent oil prices to trade in the range of US$60 to US$65 per bbl in 2020 as the oil market is projected to remain in oversupply throughout the year.
“However, with global demand gradually recovering and US supply growth projected to flatten in 2021, leading to further inventory drawdowns, we expect Brent oil prices to appreciate towards US$70 per bbl over the longer term.”
AffinHwang Capital noted that all eyes are on Iran’s attempt to retaliate following the assassination of Soleimani, the Iran military commander.
“In the short term, should tensions between the US and Iran escalate, we could see a further spike in Brent oil prices, potentially towards the US$75 to US$80 level.”
The research firm recapped that in response to Iran’s threat of military retaliation, President Donald Trump has expressed via Twitter the repercussions of such action, which would likely only lead to an attack on Iranian oil.
Overall, AffinHwang Capital believed that any recovery in Brent oil prices (barring any escalation in geopolitical tensions) would only materialise towards the end of 2020.
“We acknowledge that nearterm global oil prices will likely ride on any developments between US and China negotiations and more so, any escalation of tensions between the US and Iran.”