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Copper Tip Energy Services
Hazloc Heaters
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Copper Tip Energy


OPEC+ diminishing spare capacity to unlock consensus upside for oil companies


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These translations are done via Google Translate

January 21, 2022

Goldman Sachs sees big oil companies perform well in 2022, boosted by strong positive consensus earnings revisions, improved ESG credentials and accelerating buybacks

The brokerage points to “an era of structurally higher commodity prices on diminishing spare capacity” which will further fuel earnings momentum during 2022

The implementation of the EU Green Taxonomy should highlight the materiality of the big oil companies rising low carbon investments, GS adds, improving ESG standards.

“The macro remains particularly supportive,” it notes, with the market still in large deficit despite Omicron demand impact, low levels of inventories and OPEC+ spare capacity

GLJ
GLJ

It also expects higher cash returns to shareholders, given the acceleration of major buyback programmes and dividend rises

“The re-ignition of the cash flow engine implies European Big Oils offer on average an around 20% FCF yield (2022-2023) on our estimates, a historical high,” the brokerage says

According to its forecasts, BP, Shell, ENI and Equinor lead the group in terms of total cash returns, GS flags.



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