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CALGARY - Heavy oil producers will be the winners in the second-quarter results race, with unhedged natural gas players continuing to fall behind on sliding prices, and service companies coming in last, according to oilpatch analysts.
The second quarter likely will herald a return to higher profitability for some on crude oil prices, which have rebounded nearly 40 per cent since the first quarter, with heavy oil taking the lead on tight differentials.
Producers of natural gas, which has fallen some 15 per cent from an already low first quarter, likely will suffer into early 2010 on low industrial demand and near-full storage capacity, particularly if the production is unhedged.
"It`s safe to say the first quarter wasn`t pretty and the second quarter is looking even less so," said Peter Buchanan, senior economist with CIBC World Markets.
Consensus expectations are for a 50 per cent decline in returns for the TSX composite energy group from the second quarter of 2008, with integrated companies taking the bigger hit, he said.
Read the full article here.
The second quarter likely will herald a return to higher profitability for some on crude oil prices, which have rebounded nearly 40 per cent since the first quarter, with heavy oil taking the lead on tight differentials.
Producers of natural gas, which has fallen some 15 per cent from an already low first quarter, likely will suffer into early 2010 on low industrial demand and near-full storage capacity, particularly if the production is unhedged.
"It`s safe to say the first quarter wasn`t pretty and the second quarter is looking even less so," said Peter Buchanan, senior economist with CIBC World Markets.
Consensus expectations are for a 50 per cent decline in returns for the TSX composite energy group from the second quarter of 2008, with integrated companies taking the bigger hit, he said.
Read the full article here.