Crude oil price plummets into negative territory
This year, the crude oil price had plummeted into a negative territory.
Petroliam Nasional Bhd (Petronas) recently registered a loss after tax of RM21 billion for the second financial quarter ended June 30, 2020.
On top of that, the national oil firm’s revenue also dropped 42.4% to RM34.03 billion, compared with RM59.1 billion for 2QFY19.
It was also speculated that Malaysia would suffer a loss of RM31 billion in 2020 due to the low oil price.
On top of the crude oil price war initiated by Saudi, a low demand of oil was due to the Coronavirus pandemic and the lockdown that has been enforced in numerous countries across the globe.
This is a worrying situation for Malaysia as there are more than 3,500 local and international Oil & Gas companies functioning in Malaysia, hence the multiplier effect of this industry is high.
For Oil & Gas companies with small market capitalization, it is expected to depend on Petronas as the key player.