Asian oil & gas players should see profits rise: Moody's

PETALING JAYA: Asian integrated and upstream oil and gas companies should see their profits rise, on the back of the accelerated recovery of their upstream earnings, Moody’s Investors Service said.
Moody’s said in its latest edition of Asia Oil & Gas Quarterly Global Credit Research that the improved oil price environment, as well as cost rationalisation, will provide an upside to earnings.
"In addition, we expect that upstream acquisitions will increase, based on the announced divestment plans of global oil & gas majors in Asia," Moody's assistant vice-president and analyst Rachel Chua said in a statement yesterday.
The rating agency noted that the oil prices should stay range-bound and volatile, registering US$40-US$60 (RM177-RM266) per barrel for Brent and West Texas Intermediate crude oil until at least 2018.
“Prices in the upper half of the oil price band would support increases in crude oil output, in particular, due to rising US shale oil production, where production costs have fallen significantly,” it added.
As for the Singapore complex gross refinery margin, Moody's said it will remain volatile in 2017, driven by continuing oversupply conditions in Asia and likely price volatility of petroleum products feedstock.
Specifically, Moody's said, it expects a healthy refining margin of US$5-US$5.5 per barrel over the next 12-18 months. “Such levels are in line with long-term average prices,” it said.