DUBAI
\nThe global energy industry is expected to see stable growth in 2022 as earning prospects for companies improve on the back of higher oil demand, according to Moody\u2019s Investors Service.
\nIt, however, expects the pace of improvement in fundamental conditions across the industry to ease over the next 12 to 18 months. \u201cThe ongoing recovery in global oil demand, gradual supply growth, and a manageable cost environment will provide a supportive macro backdrop for producers to maintain earnings above 2019 levels,\u201d Moody\u2019s said in a report on Friday. \u201cMany producers that did not invest sufficiently in 2020-21 will seek to boost capital budgets to stabilise production and stave off potential declines in volumes.\u201d
\nEarning prospects for refining and marketing (R&M) and oilfield services (OFS) and drilling companies are expected to improve through 2022, while for the exploration and production and integrated oil sectors earnings will be \u201clittle changed in 2022,\u201d according to Moody\u2019s.
\n\u201cThe OFS sector will benefit in 2022 from significant cash flow momentum and is poised to increase aggregate cash flow by more than 10 per cent in 2022 from 2021 levels,\u201d it said.
\nR&M companies will also improve their financial strength \u201cas demand and earnings increase through 2022, with fuel consumption returning to pre-crisis levels\u201d.
\nOil prices continue to trade higher as demand recovers, but rising Covid-19 infections across Europe and elsewhere, led to Brent, the international benchmark for more than half of the world\u2019s crude, to end the week down 2.89 per cent to $78.89 per barrel at the close of trading on Friday. West Texas Intermediate, the key gauge for US oil, closed 3.68 per cent down to $76.10 per barrel.
\nBrent receded after hovering in the mid $80s and rallying more than 60 per cent year-to-date due to the resurgence in coronavirus cases, which could impact demand. On Friday, Austria ordered a full lockdown and Europe\u2019s first nationwide vaccine mandate as the country has just under 66 per cent of its total population fully vaccinated against Covid-19, one of the lower rates in the EU. Germany called for a \u201cnationwide state of emergency\u201d because of surging coronavirus infection rates, the head of the country\u2019s disease control agency said.
\n\u201cAfter a rapid rise in oil and gas prices in 2021, the expansion in earnings and cash flow generation in the industry will moderate next year, even as prices remain elevated,\u201d Elena Nadtotchi, senior vice-president at Moody\u2019s, said.
\n\u201cCompanies will consider increasing investments necessary to support existing production and modest growth, while also racing to meet heightened demands for shareholder distributions and improvement in returns on capital employed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
DUBAI The global energy industry is expected to see stable growth in 2022 as earning prospects for companies improve on the back of higher oil demand, according to Moody\u2019s Investors Service. It, however, expects the pace of improvement in fundamental conditions across the industry to ease over the next 12 to 18 months. \u201cThe ongoing […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-228604","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-world"},"yoast_head":"\n