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by Stockwatch Business Reporter

West Texas Intermediate crude for June delivery added $1.87 to $29.43 on the New York Merc, while Brent for July added $1.37 to $32.50 (all figures in this para U.S.). Western Canadian Select traded at a discount of $8.35 to WTI, down from a discount of $8.25. Natural gas for June lost three cents to $1.65. The TSX energy index added 2.17 points to close at 73.83.

After "two of the most challenging months that the global oil and gas industry has ever experienced ... the fog of uncertainty is lifting." So said DBRS Morningstar this morning as it revised its outlook on oil and gas prices. The credit ratings agency took note of the OPEC+ production cuts that took effect this month, in addition to rising fuel demand as countries begin to relax COVID-19-related lockdowns.

Lest the oil bulls get too excited, DBRS made one thing clear: Visibility is one thing; whether you like what you see is another. The agency sharply lowered its oil and gas price forecasts from the ones it last provided in February. WTI, for example, is now forecast to average $32 (U.S.) in 2020, $40 (U.S.) in 2021 and $50 (U.S.) in 2022, down from February's call of $55 (U.S.) in all three years. DBRS predicted that the "significant overhang of crude oil inventories will hold back a material price rebound for some time." As well, any rebound "could prove fleeting" if (for example) a resurgence of COVID-19 puts countries back into lockdown. DBRS is nonetheless fairly confident in its forecasts and expects to start updating its credit ratings on energy companies accordingly. It warned companies to expect "a number of negative rating actions" in the coming weeks, as "many issuer credit profiles have weakened considerably."

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