Oil and gas firms likely to be spared steep impairment that ravaged them in 2020

IT's too early to say if oil's robust start in 2021, led by output cuts and vaccine hopes, will bring energy stocks back in vogue soon. But the sector appears well clear of the troughs it saw in 2020.

Last week, crude's global benchmark Brent posted its biggest weekly gain in four months on a tight supply outlook after Saudi Arabia - the Opec oil cartel's biggest producer - pledged to cut oil output in February and March and raised pricing for crude sales next month to Asia. Iraq also followed suit. The surprise move led Brent prices to top US$55 a barrel - a level last seen in February 2020.

It is difficult to be too certain of oil's future direction, especially after the commodity's historic crash to sub-zero levels last year. Demand collapsed amid the pandemic, leading to a massive supply glut. But there are pockets of hope that after one of the worst-ever years for oil writedowns, firms' impaired balance sheets may be on the mend this year.