Energy: Estimates, Comps, and Oil/Gas Market Trends
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Barclays has published its latest energy sector credit research update, encompassing investment-grade exploration and production (E&P), midstream, refining, and oilfield services. The report provides updated 2026 estimates, relative value scatter plots, and an analysis of key commodity inventory trends. For the week ending April 17, 2026, all energy subsectors outperformed broader US corporate bonds. Year-to-date, E&P stands out as the strongest-performing energy subsector, while integrated oils lagged and oilfield services delivered the best weekly results.
The highest excess returns last week were observed in APA, CVECN, and CLR, whereas HP, OVV, and CVX recorded the weakest relative performance. On the modeling front, Barclays has updated its Baker Hughes (BKR) model to reflect recently announced asset divestitures. The refining model was adjusted based on crude and product forward curves. Consequently, the 2026 estimates remain significantly higher than consensus expectations for VLO and MPC, though they appear reasonable when contextualized against the exceptional margins seen in 2022.
Turning to physical market indicators, refining capacity utilization declined week-over-week but remains slightly above the five-year average. Gasoline days of supply have dropped below the lower bound of the five-year range, indicating tightening availability. Conversely, propane days of supply persist above the historical maximum. Distillate supply saw a minor rebound, currently resting at the lower end of the five-year range. Natural gas inventory days remain near the five-year average, with the daily balance sitting in modest surplus. Meanwhile, the NYMEX managed-money long/short ratio for crude oil shows a slight bullish skew.