European oil & gas face worsening commodity environment, Berenberg says
** Berenberg says European oil and gas companies are entering a tougher environment with materially worse outlooks for oil, gas/LNG and refining margins
** That will likely put pressure on sector earnings, cash flow and share buybacks in the coming quarters, it says
** While the broker expects gas prices to stay elevated in the near term, it says the estimated 25% increase in delivered LNG volumes in 2025-2028 could lead to an oversupply in 2026
** It expects refining earnings to be materially lower in 2025 as it sees no shortage of products amid weaker demand in Europe and the recent weakness in China
** However, it sees lower capital intensity driving capital towards more profitable projects, and higher payout ratios – primarily through buybacks – which should generate significant value for "patient investors" over time
** It upgrades Equinor EQNR.OL to "hold" from "sell" based on updated commodity prices
** Its top picks are Shell SHEL.L, and TotalEnergies TTEF.PA (both "buy"), citing simplified strategy bearing fruit for the former, and profitable upstream and low-carbon power business for the latter
** It keeps "hold" on BP BP.L, Eni ENI.MI, OMV OMVV.VI and Repsol REP.MC
Reporting by Marta Frąckowiak
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