NEW YORK
\nMoody\u2019s Investors Service has revised its outlook for the global energy industry to positive from stable as higher commodity prices are expected to boost the earnings of oil and gas companies.
\nEarnings of energy companies active in exploration and production, refining and marketing, as well as oilfield services will rise due to higher oil prices, the rating agency said in its latest report.
\nMoody\u2019s also maintained a stable outlook for the global midstream industry (storage, processing and transport of petroleum products) on modest growth prospects following low levels of capital spending.
\n\u201cRestrained supply will keep prices high over the next 12-18 months, but without significant fundamental enhancement in operating conditions as growth in demand starts to ease,\u201d said Elena Nadtotchi, a senior vice president at Moody\u2019s.
\n\u201cThe pace of improvement in earnings will slow by early 2023, while commodity prices will remain well above our medium-term price ranges.\u201d
\nOil prices, which rose more than 67 percent last year, continued to trade higher amid supply concerns due to Russia\u2019s military offensive in Ukraine and improving demand. Brent, the global benchmark for two thirds of the world\u2019s oil, is up more than 30 per cent since the start of this year after falling from a 14-year high, reaching almost $140 per barrel in March.
\nOpec+, led by Saudi Arabia and Russia, is also restraining production to support prices. The group of oil producers, which achieved a historic reduction of 9.7 million barrels per day between May 2020 and July last year, is unwinding cuts due to improving demand, adding 400,000 barrels per day to the market every month, which will increase to 432,000 bpd from May.
\nExploration and production companies will generate \u201crecord profits and free cash flow in 2022\u201d amid strong commodity prices and continued capital discipline, while most integrated oil and gas companies will generate \u201csignificant earnings increase\u201d this year, Moody\u2019s said.
\nProfits of refining companies are expected to increase with \u201cmargins exceeding mid-cycle levels\u201d amid higher demand, the rating agency said.
\nOilfield services companies will also record higher earnings, with smaller onshore service companies in North America set to post a \u201cmost substantial growth in earnings\u201d.
\nThe global midstream industry, meanwhile, is expected to record modest growth in 2022, with a projected Ebitda (earnings before interest, taxes, depreciation and amortisation) expansion of 2 to 3 per cent, Moody\u2019s said.
\n\u201cStrong energy prices suggest midstream companies will benefit from growth in underlying volumes, but midstream earnings will not increase much this year as costs inflate while E&P companies\u2019 throughput increases only over time,\u201d said Amol Joshi, Moody\u2019s senior credit officer.<\/p>\n","protected":false},"excerpt":{"rendered":"
NEW YORK Moody\u2019s Investors Service has revised its outlook for the global energy industry to positive from stable as higher commodity prices are expected to boost the earnings of oil and gas companies. Earnings of energy companies active in exploration and production, refining and marketing, as well as oilfield services will rise due to higher […]<\/p>\n","protected":false},"author":2,"featured_media":257612,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6],"tags":[6483,6482,6481,2053],"class_list":{"0":"post-257589","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-global-energy-industry","9":"tag-moody","10":"tag-outlook","11":"tag-positive"},"yoast_head":"\n