Higher oil and gas prices, increased production volumes and stronger downstream margins in 2021 will help European oil majors to recover from their relatively weak performance in 2020, APA-Economics reports quoting Fitch Ratings.

1Q21 financial results support these expectations as the companies reported a sharp qoq improvement in EBITDA and operating cash flow. The European oil majors’ ratings and Outlooks have remained unchanged during the Covid-19 pandemic. Higher oil and gas prices, increased production volumes and stronger downstream margins in 2021 will help European oil majors to recover from their relatively weak performance in 2020, Fitch Ratings says. 1Q21 financial results support these expectations as the companies reported a sharp QoQ improvement in EBITDA and operating cash flow. The European oil majors’ ratings and Outlooks have remained unchanged during the Covid-19 pandemic.

Oil and gas prices have increased from the lows during the pandemic and we expect prices to stay materially above average 2020 levels in the medium term. Higher oil and gas prices and stronger downstream margins in 1Q21 led to a sharp increase in EBITDA and cash flow for European majors after a weak 2Q20-4Q20. BP, Eni and TotalEnergies generated increased EBITDA before the inventory holding effect in 1Q21 compared to 1Q20. Shell’s 1Q21 EBITDA before the inventory holding gain was weaker yoy, we believe partly due to lower realised liquefied natural gas (LNG) prices and restructuring costs.

Source: Azeri-Press News Agency