New Delhi: Sustained momentum in commodity prices will support the turnaround in the global Oil & Gas industry’s fundamental conditions and a positive global sector outlook through mid-to-late 2022, according to Moody’s Investors Service.
“Pent-up consumer demand and a pickup in trade and manufacturing activity around the world are spurring a rebound in economic activity, encouraging a faster recovery in demand and prices for oil and gas through late 2021 and into early 2022,” the firm said in a report.
Maintaining its medium-term commodity price ranges, $45-$65 per barrel for oil and $2-$3 per MMBtu for Henry Hub natural gas, the credit rating agency said the exploration and production (E&P) sector will continue to make gains in earnings and operating cash flow in 2021 based on higher oil prices, favorable market dynamics and low operating costs.
he agency also said demand and earnings point to a positive direction for the refining and marketing (R&M) sector through mid-2022 as more economies reopen. The global demand for refined products will be up by about 6 per cent in 2021 from year-earlier levels, and by nearly 4 per cent in 2022.
However, while the outlook for global energy is positive over the next 12-18 months, over the longer term there is growing concern around climate change leading to increased risks for the industry from energy transition, greater regulation and reduced investor demand.
Oil prices staged a recovery after tumbling in March 2020, despite a widespread uncertainty surrounding economic recovery, and are trading at or above the range of $45-$65 per barrel. Prices were propelled upward by restricted supply amid a steadily improving demand for oil and refined products.
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