Equity Analysis /

Thailand: Energy - 4Q22 playbook—Selective seasonal plays

  • Demand pickup expected for 4Q22

  • Limited supply addition to support oil prices in 4Q22

  • Seasonally high demand amid tight supply to boost 4Q22 GRM

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
23 September 2022

High seasonal demand and tight supply will tend to boost coal prices and GRM YoY and QoQ in 4Q22. In contrast, crude prices look set to soften QoQ in 4Q22 amid easing market tightness. Nevertheless, the global economic slowdown and geopolitics are the key factors to watch, as they could adversely affect the global demand recovery. Hence, our NEUTRAL rating for the sector stands. BANPU and Refining stocks are our preferred picks.

Demand pickup expected for 4Q22

The prevailing high inflation has decelerated global economic growth in 3Q22. Moreover, the ongoing lockdowns in China tied to its zero-COVID 19 policy has been another factor squeezing the oil demand during the period. Global oil demand growth in 3Q22 looks set to expand QoQ at a slower pace than what was previously envisaged. Nevertheless, the global oil demand is projected to expand further QoQ in 4Q22, buoyed by improved global economic conditions.