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Regional Oil & Gas Summary

Core Content

The document provides an overview of the regional oil and gas market as of 21 September 2015, highlighting price movements, key news, and analyst ratings for various companies across Asia, India, Japan, and other regions. It includes insights into the market dynamics, such as the impact of supply and demand, geopolitical factors, and the financial performance of key players.

Key Market Movements

• Brent Crude Oil: Rose by 3.1% to USD48.92/b, with a 1D change of +1.45 USD/bbl.
• WTI Crude Oil: Increased by 4.5% to USD46.68/b, with a 1D change of +2.00 USD/bbl.
• Dubai Fateh Spot: Declined by 2.7% to USD44.62/b, with a 1D change of -1.23 USD/bbl.
• China Daqing Spot: Remained stable at USD38.60/b, with 0.0% change over the week and -7.6% over the month.
• NYMEX Henry Hub: Dropped by 1.2% to USD2.57/MMBtu, with a 1D change of -0.03 USD/MMBtu.
• LNG Northeast Asia CFR: Declined by 0.5% to USD6.87/MMBtu, with -8.8% over the week and -11.1% over the month.
• Singapore 92 RON Spot: Rose by 1.2% to USD59.97/b, with 3.1% over the week and -1.8% over the month.
• Gasoil 500 ppm SG Spot: Slightly declined by 0.6% to USD59.24/b, with -0.6% over the week and 0.1% over the month.
• 3.5% 180cst Fuel SG Spot: Increased by 0.5% to USD238.59/mt, with 1.5% over the week and 2.8% over the month.
• Gold: Slightly declined by 0.5% to USD1,133.44/Oz, with 2.2% over the week and -2.4% over the month.
• USD-CNY: Increased by 0.1% to 6.37, with 0.0% over the week and -0.3% over the month.
• DJI: Rose by 0.8% to 16,510.19, with 0.9% over the week and 0.3% over the month.
• S&P 500: Increased by 0.5% to 1,966.97, with 0.7% over the week and -0.2% over the month.

News Headlines

1. Oil Declines as Focus Swings to Glut From Shrinking U.S. Supply

   • Oil prices fell after a rebound due to concerns over market glut and Iran's potential increase in output.
   • U.S. crude stockpiles are expected to drop for a second consecutive week.
   • Investors are weighing the impact of reduced U.S. supply against increased OPEC production.

2. China Output of All Oil Products Except Naphtha Rise in Aug on High Throughput

   • China's naphtha production continued to decline year-on-year in August.
   • Crude throughput increased by 6.5% year-on-year.
   • Domestic production of oil products is rising due to increased throughput.

3. Oil Bust Claims Unusual American Victim Far Away From Shale Rigs

   • The collapse in the oil market is affecting the sand industry, which is crucial for hydraulic fracturing.
   • Prices for sand have dropped by almost a third to under USD40 per ton.
   • This highlights the indirect impact of the shale oil bust on related industries.

4. CNPC Flows Gas from Tan-401D Well in Turkmenistan's Tangiguyi Field

   • CNPC has started production from the Tan-401D well, which is expected to transmit gas to the Central Asia - China Gas Pipeline.
   • The well produces 300,000 cubic meters of natural gas per day.

5. Singapore's Record High Fuel Oil Stocks Push Oil Into Floating Storage

   • High fuel oil stocks in Singapore are pushing traders to store oil in tankers.
   • At least seven VLCCs are provisionally fixed for short-term storage.
   • Lower oil prices have boosted refinery profits, leading to increased fuel oil supply.

Analyst Reports

Yinson Holdings

• Rating: BUY
• Price: MYR4.35
• Target Price: MYR4.35
• Key Points:
  • Resilient business model with defensive qualities.
  • Likely to receive special dividends from non-O&G divestment.
  • Focus on building a war chest and new FPSO projects.

SapuraKencana Petroleum

• Rating: HOLD
• Price: MYR2.00
• Target Price: MYR2.00
• Key Points:
  • 1HFY16 core earnings positively surprised.
  • Long-term prospects remain weak.
  • Expect weaker FY17 compared to FY16.
  • No significant catalysts expected.

Petronas Chemicals

• Rating: HOLD
• Price: MYR2.00
• Target Price: MYR2.00
• Key Points:
  • ASP has declined but is insulated by MYR weakness.
  • Dividend yields are expected to remain at mid 3%.
  • Weakening MYR against USD provides a revenue and profit kicker in 3Q15.

China Oil & Gas

• Rating: OVERWEIGHT
• Key Points:
  • Upgrade the China Oil & Gas sector to Overweight.
  • Sinopec is upgraded to BUY due to downstream asset optimization.
  • CNOOC remains a BUY.
  • PetroChina is advised to avoid (SELL).

Key Companies and Valuations

Analyst Contacts

• Howard Wong (HK/CHINA): (852) 22680648 | howardwong@kimeng.com.hk
• Jigar Shah (INDIA): (91) 2266232632 | jigar@maybank-ke.co.in
• Pandu Anugrah (INDONESIA): (62) 21 2557 1137 | pandu.anugrah@maybank-ke.co.id
• Liaw Thong Jung (MALAYSIA): (603) 22978688 | tjiaw@maybank-ib.com
• Michael Bengson (PHILIPPINES): (63) 28498840 | micheal bengson@maybank-atrke.com
• Yeah Chee Keong (SINGAPORE): (65) 6231 5842 | yeakcheeong@maybank-ke.com.sg
• Sutthichai Kumworachai (THAILAND): (66) 2658 6300 x 1400 | sutthichai.k@maybank-ke.co.th
• Le Nguyen Nhat Chuyen (VIETNAM): (84) 844555888×8082 | chuyen.le@maybank-kimeng.com.vn
• Truong Quang Binh (VIETNAM): (84) 444555888 x 8087 | binh.truong@maybank-kimeng.com.vn

Conclusion

The document outlines the current state of the oil and gas market, highlighting price changes, key news, and analyst recommendations. It underscores the impact of U.S. supply reduction and market glut on oil prices, as well as the performance of Chinese and other Asian oil and gas companies. Analysts recommend buying or holding based on company-specific fundamentals and market conditions.