Oil sell off is weighing on Malaysia capital markets


AM Bank Research chief economist Anthony Dass expects Brent oil to average at around the US$65 to US$69 levels in 2019.

Another economist from a local investment bank has made a more conservative forecast of US$60 per barrel, describing the projection as “playing safe”.

However, Singapore-based Oanda Corp head of trading for Asia-Pacific Stephen Innes is more positive on oil price prospects, with a forecast of US$70 to US$75 per barrel in 2019.

Not only that, earlier in October, S&P Global Ratings revised its Brent crude forecast for 2019 to US$70 per barrel, up from its initial estimate of US$65.

However, the rating agency pointed out that supply concerns remain elevated moving into next year.

Innes cautioned that a continued fall in crude oil prices would weigh on Malaysia’s budgetary and fiscal concerns. He also said that lower oil prices would be a negative driver for the already-weakening ringgit.

“Combined with policy divergence between Bank Negara and the Federal Reserve, I suspect the ringgit could trade at RM4.25 per greenback by end-2019,” said Innes in an e-mail interview.

The Star Malaysia

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes