Average crude oil prices are anticipated to hover around $46 per barrel this year and not exceeding $50 next year following a disagreement on supply cut and the price war among Opec and non-member countries, says the Investment Analysts Association (IAA).
The forecast was a downward revision by 20% from previous expectations gauged by eight securities firms, according to the IAA.
Friday's meeting of Opec left a sour note and exacerbated oil's plunge as member countries failed to finalise a deal to continue restraining their output.
Non-member Russia refused to go along with efforts to rescue the oil market by cutting production, while Saudi Arabia escalated the situation further over the weekend, slashing export prices by $6-$8 a barrel in a bid to retake market share and heap pressure on Russia.
The rupture sent share prices of companies under the umbrella of national oil and gas conglomerate PTT Plc to record steep losses of more than 20% on Monday, with PTT's oil and gas drilling arm, PTT Exploration and Production Plc (PTTEP), down the most at 29.8%.
PTTEP share price remains battered as the equity continued to plummet by 5.7% today, with the share price of PTT Global Chemical Plc shedding 2.4%.
IAA secretary-general Sombat Narawutthichai said PTTEP’s earnings-per-share (EPS) is expected at 6.20 baht this year, down 49.6% from 2019. For PTT, its EPS is expected at 2.72 baht per share, down 17.7% from last year.
Although low crude oil prices yield benefits on reducing logistic cost for the real sector, the country’s fuel import, pressure on fossil fuel energy deficit and the cost of living, the protracted low oil prices will affect the overall global economy because many countries rely on oil for revenue generation, said Thammarat Kittisiripat, head of economic unit at Tisco Economic Strategy Unit.
With lower oil revenue anticipated, tourists from these countries will be lowered, said Mr Thammarat.
Lower oil prices will also put pressure on the value of petroleum-related exports and agricultural products, he said.
Tisco Economic Strategy Unit has slashed Thailand’s GDP growth forecast to 0.8% this year, down from 1.7% previously projected, due mainly to the Covid-19 impact on tourism revenue, the local drought, domestic political uncertainty and lower oil prices.