Moody's Investors Service revised its outlook for the global energy industry to positive from stable as higher commodity prices are expected to boost the earnings of oil and gas companies. Earnings of energy companies active in exploration and production, refining and marketing, as well as oilfield services will rise due to higher oil prices, the rating agency said in a report on Monday. Moody's also maintained a stable outlook for the global midstream industry (storage, processing and transport of petroleum products) on modest growth prospects following low levels of capital spending. “Restrained supply will keep prices high over the next 12-18 months, but without significant fundamental enhancement in operating conditions as growth in demand starts to ease,” said Elena Nadtotchi, a senior vice president at Moody's. “The pace of improvement in earnings will slow by early 2023, while commodity prices will remain well above our medium-term price ranges.” Oil prices, which rose more than 67 per cent last year, continued to trade higher amid supply concerns due to Russia’s military offensive in Ukraine and improving demand. Brent, the global benchmark for two thirds of the world's oil, is up more than 30 per cent since the start of this year after falling from a 14-year high, reaching almost $140 per barrel in March. Opec+, led by Saudi Arabia and Russia, is also restraining production to support prices. The group of oil producers, which achieved a historic reduction of 9.7 million barrels per day between May 2020 and July last year, is unwinding cuts due to improving demand, adding 400,000 barrels per day to the market every month, which will increase to 432,000 bpd from May. Exploration and production companies will generate “record profits and free cash flow in 2022” amid strong commodity prices and continued capital discipline, while most integrated oil and gas companies will generate “significant earnings increases” this year, Moody’s said. Profits of refining companies are expected to increase with “margins exceeding mid-cycle levels” amid higher demand, the rating agency said. Oilfield services companies will also record higher earnings, with smaller onshore service companies in North America set to post a “most substantial growth in earnings". The global midstream industry, meanwhile, is expected to record modest growth in 2022, with a projected Ebitda (earnings before interest, taxes, depreciation and amortisation) expansion of 2 to 3 per cent, Moody's said. “Strong energy prices suggest midstream companies will benefit from growth in underlying volumes, but midstream earnings will not increase much this year as costs inflate while E&P companies' throughput increases only over time,” said Amol Joshi, Moody's senior credit officer. Global energy spending is set to reach a record $2.1 trillion in 2022, led by the oil and gas sector, Rystad Energy said in a recent report.