Moody’s forecasts medium-term oil price at $45-65 a barrel 

The outlook for the global energy industry has been changed to positive from stable, Moody's Investors Service says in research published today, Report informs.

A sustained uptick in commodity prices on the back of a recovering global economy is set to bolster a turnaround in industry fundamentals over the coming 12 to 18 months.

Moody's maintains its medium-term commodity price ranges of $45-$65/barrel for oil.

"Pent-up consumer demand and increasing trade and manufacturing activity as the Covid-19 pandemic is brought under control are driving a rebound in global economic activity," said Elena Nadtotchi, a Moody's Senior Vice President. "This, in turn, is quickening the pace of a recovery in demand for oil and gas through late 2021 and into early 2022."

Favorable market dynamics and relatively low operating and offshore services costs will bolster exploration and production (E&P) companies' earnings and operating cash flow in 2021 on the back of higher oil prices, Nadtotchi says. Producers will focus on capital discipline and operating efficiencies in order to generate stronger free cash flow, pay down debt, and strengthen their overall credit quality following a very difficult 2020.