Asia Wealth Securities (AWS) has given “BUY” recommendations on four stocks related to oil prices, following the recent rally on supply concerns.
AWS stated that oil play still has short-term support as WTI crude for February delivery closed up USD1.61 (+1.9%), returning to trade above USD85 per barrel. The securities company added that this is based on fundamentals of seasonal demand and Libya oil production that fell to just 729,000 barrels per day (previously 1.3 million barrels per day) due to the closure of several oil wells, including the closure of oil pipeline maintenance.
In addition, short-term issues that are not related to fundamentals is the concern about the unrest in the Middle East after the Houthi rebels attack on the inner UAE near the Abu Dhabi National Oil Company (ADNOC) earlier this week. Attacks on UAE oil utilities deal a limited amount of damage, but the incident reflects how the Houthi rebels can advance into the inner UAE, especially in oil-producing areas.
This raised concerns that the tensions in the Middle East could escalate in the short-term. This could also affect future nuclear deals between Iran and the United States, as the Houthi rebels are an armed group backed by the Iranian government.
AWS stated that it is optimistic on oil play stocks, namely PTT (Buy, TP Bt48), PTTEP (Buy, TP Bt140), TOP (Buy, TP Bt66) and SPRC (Buy, TP Bt12.8) remained a stock that received positive factors from the increase in crude oil prices while raising PTTEP and SPRC as top picks.
The share price of PTT Public Company Limited (SET: PTT) closed the morning session on January 19, 2022, at Bt39.00 per share, representing a gain of Bt1.00 per share or 2.63%.
PTT Exploration and Production Public Company Limited (SET: PTTEP) closed the morning session at Bt127.50 per share, representing a gain of Bt1.00 per share or 0.79%.
Thai Oil Public Company Limited (SET: TOP) closed at Bt52.75 per share, representing a gain of Bt1.00 per share or 1.93%.
Lastly, the share price of Star Petroleum Refining Public Company Limited (SET: SPRC) closed at Bt10.90 per share, representing a gain of Bt0.40 per share or 3.81%.
