- Buybacks might take a slight hit, but dividends are safe
Citigroup isn’t expecting any panic in the oil patch just yet. In a new note on global oil and gas majors, analysts said the current economic uncertainty doesn’t come close to the shocks seen during the financial crisis or the pandemic.
Oil prices are still well within a normal range, one standard deviation of the 20-year average, to be precise, and balance sheets are in far better shape than they were pre-Covid.
That gives the sector breathing room to ride out whatever shape the downturn takes, whether V, U, or L.
Citi said a few names might choose to trim share buybacks when they report first-quarter results, but most companies are expected to hold their nerve.
Crucially, dividends appear safe even if oil falls back to $60 a barrel.