Equity Analysis /

Thailand (Bualuang): Energy - 2022 playbook—selective buy

  • Global oil demand will expand further in 2022

  • Gradual supply increase to support oil prices

  • Demand improvement amid limited supply additions to boost GRM

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
20 December 2021

Global oil demand will strengthen further throughout 2022, while supply will gradually increase. This should bode well for crude prices and GRM. But the coal price is likely to soften next year. Thai Energy firms have moved ahead to decarbonize operations and this will sustain their long-term growth. Current valuations are still undemanding. Hence, our NEUTRAL rating for the sector stands. PTTEP and TOP are our preferred picks.

Global oil demand will expand further in 2022

The global crude demand looks set to expand further, boosted by economic growth across the globe in 2022. Major energy research agencies forecast oil demand growth in the range of 3.3-4.2m bbl/day for 2022. However, the new Omicron variant of COVID-19 remains the key factor to watch, as it may dampen the oil demand and put downward pressure on oil prices. In contrast, if global infection rates were to fall sharply, oil demand would be stronger, boosting oil prices.