He said the energy market outlook was positive and prices would move up in a structured manner.

“There is no more (oil) glut in the market.

“The premise is very simple. Demand for oil is solid, that is 93 million barrels per day,” he said.

Overall, Shan was quite optimistic about the price outlook in the energy market as prices would be better than the forward curve.

“Supply constraints are there due to unstable oil company policies. And, because of the uncertainty, people are now booking their order rate in the spot price, making it higher than the forward price,” said Shan.

Today, the benchmark Brent oil futures climbed above US$50 per barrel for the first time in nearly seven months, as the supply glut tapered off.

“At US$50 per barrel, there is a behavioural shift in company policies in terms of capital expenditure and human resources hiring, market conditions and drilling potential,” he added.

– BERNAMA