Here's what to watch ahead of reporting season:WHAT TO WATCH:- HIGHER OIL PRICES & REFINING MARGINS: The major European energy companies are expected to book an average 45% rise in on-quarter net income as a direct result of higher oil prices and refining margins across the quarter, Bank of America says in a research note. Moreover, "refining margins have been the star of the show this quarter, and we see the most positive momentum for refining exposed names," RBC Capital Markets say in a research note. "This corresponds to an average quarter-on-quarter uptick in refining margins of around 100%," BofA says, highlighting Spain's Repsol as the most refining-skewed. - CASH FLOW: The year's second quarter saw the European oil-and-gas majors collectively deliver the lowest free cash-flow figure since 2020. Overall, the sector should see more earnings beats than cash flow beats, the U.S. bank says.

Source: Wall Street Journal October 20, 2023 23:56 UTC