Energy sector outlook turns positive

By James Langton | April 26, 2021 | Last updated on April 26, 2021
1 min read
Oil field oil workers at work
© Song Qiuju / 123RF Stock Photo

The outlook for the global energy sector has been upgraded to positive amid higher commodity prices, says Moody’s Investors Service.

In a new report, the rating agency said a sustained increase in commodity prices will support improving industry fundamentals over the next 12 to 18 months. As a result, Moody’s has upgraded its outlook for the sector from stable to positive.

“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, senior vice-president at Moody’s. “This, in turn, is quickening the pace of a recovery in demand for oil and gas through late 2021 and into early 2022.”

Moody’s estimates that global demand for refined energy products will rise by about 6% this year and by almost 4% in 2022.

“Strong earnings in the global [exploration and production] and refining sectors will see integrated oil companies’ earnings rise by a median rate of about 50%, though off a low base,” Moody’s said. “Adjusted EBITDA almost halved in 2020, and likely won’t return to pre-pandemic level before the end of 2022.”

Additionally, Moody’s said that “pent-up demand for travel and seasonally higher second- and third-quarter earnings in 2021 bode well for the refining and marketing segment through 2022.”

James Langton headshot

James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.