trending Market Intelligence /marketintelligence/en/news-insights/trending/VbDFZzWFN28tpWXR9L2SoQ2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Moody's 2020 oil sector outlooks stable amid range-bound, volatile crude prices

European Energy Insights July 2020

As COVID-19 Wears On, Regulators Examine Moratorium Extensions, Cost Recovery

Essential Energy Insights - June 11, 2020

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions


Moody's 2020 oil sector outlooks stable amid range-bound, volatile crude prices

The Moody's 2020 outlooks for the producer and oilfield services sectors are stable amid forecasts for crude oil prices to remain range-bound but volatile.

Forecasts for West Texas Intermediate and Brent crude oil prices span $50 per barrel to $70/bbl and $55/bbl to $75/bbl, respectively, through 2020, Moody's said in a Dec. 12 report.

Price volatility will persist amid uncertainties surrounding OPEC producers' response to rising non-OPEC production into 2020, a possible increase in U.S. crude oil production as new pipelines come into service, a slowing outlook for global demand growth, ongoing trade tensions between the U.S. and China, and widening Canadian differentials, the analysts said.

As a whole, "energy companies will struggle to access capital markets, weakening the industry's overall liquidity, increasing its cost of capital and raising its default risk," Moody's said.

The outlook for the exploration and production sector, however, is stable as Moody's forecast earnings growth in the low single digits even as volume growth slows to 5% to 7% amid weak capital spending.

Further consolidation among producers is possible in 2020 as the sector remains focused on capital discipline and free cash flow generation, Moody's analysts said.

Meanwhile, producers will continue to take advantage of efficiency gains and low-cost oilfield services as oilfield services and drilling companies limit pricing amid oversupply and lackluster demand.

A 2% to 4% decline in producer spending is forecast to prolong credit stress for oilfield services companies, particularly smaller private companies, Moody's said.

The analysts' outlook for the oilfield services sector is stable as international market growth offsets ongoing weakness in the U.S. land market.

Demand for oilfield services in the U.S. onshore market, and the rig count, will remain flat to the levels at the close of 2019, although there is some potential for additional weakness should producers steepen spending cuts, Moody's said. Utilization rates are forecast to see little improvement amid an excess supply of equipment and lack of pricing power, straining operating margins, the analysts said.

International market demand growth is forecast to slow from the 2019 pace but continue as higher Brent pricing drives the international land rig count higher, mitigating weakness in the U.S. land market, Moody's said.

For offshore drillers, short-term contracts will keep utilization up, but companies will continue to see credit quality suffer under high debt burdens, Moody's said.

Improved day rates will depend on companies' ability to sign long-term contracts, Moody's said.