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02 September 2024

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Oil Weekly (02 September 2024): USD 79.7/bbl (+2.9% WoW)

Recent Catalysts Driving the Price

  • Between 26-30 August 2024, Brent prices increased +2.9% WoW (from USD 77.4/bbl) and WTI prices rose +2.4% WoW (from USD 73.6/bbl). Oil prices reached nine-month high, supported by OPEC's production cuts of -1 MMbopd and rising global demand, particularly from the US.
  • Outlook for global oil demand has improved significantly as the Federal Reserve hinted at potential rate cuts beginning in September, bolstering expectations for 2.2 MMbopd increase in oil demand by year-end. Additionally, a sudden halt in Libya's 1.2 million barrels per day oil production added to supply constraints, contributing to oil price hike and reinforcing bullish market sentiment.
  • In terms of price, we maintain average oil forecast at USD 84.5/bbl (avg YTD: USD 82.3/bbl), as we expect some support stemming from extended supply cuts. At this stage, we retain MEDC as our top pick, with target price of IDR 2,200, reflecting FY24F valuation of 4.9x EV/EBITDA.

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