Moody's Investors Service says the recovery in the price of Dubai crude will provide some support to upstream oil companies, which have seen their margins contracting significantly over the past year.

"While oil prices remain weak, the recovery in the price of Dubai crude to $61.3 a barrel in the April to June quarter 2015 will provide some support to the earnings and cash flows of upstream oil companies," says Vikas Halan, a Moody's Vice President and Senior Credit Officer.

In particular, Moody's expects that regional companies producing more oil or oil price-linked liquefied natural gas will likely benefit from the recovery in the price of Dubai crude.

"We also expect that investment-grade exploration and production players, particularly national oil companies, will be better-positioned to weather the cyclical downturn in the oil and gas industry, given their greater financial flexibility, stronger liquidity profiles and better access to capital," says Rachel Chua, a Moody's Associate Analyst.

Halan and Chua were speaking on the release of the latest edition of Moody's Asia Oil & Gas Quarterly, a publication focusing on credit themes in Asia's oil and gas industry.

Moody's publication explains that Dubai crude traded at an average of $61.3/barrel (bbl) in the April to June quarter 2015; representing a 16.4% increase from $52.6/bbl in the preceding quarter, and ended the period at $60.9/bbl. The improvement was in large part due to the stronger demand for refined products.

As for the Singapore complex gross refining margin (GRM), Moody's expects the GRM to average $7.5-$8.0/bbl in 2015, based on Moody's forecast that the GRM will stay at healthy levels during the refinery turnaround season in the second half of 2015 from the average of $8.0 per barrel in Q2 2015.

Moody's says the strong GRM levels will boost the results of refiners in Q2 2015. Refiners will also benefit from inventory valuation gains.

Moody's publication points out that gasoline crack spreads strengthened in Q2 2015, against the backdrop of strong regional demand from South Asia and Indonesia, which in turn absorbed increasing exports from North Asia.

Middle distillate spreads remained stable in Q2 2015, as stronger demand eased the oversupply situation in the market.

Overall, Moody's expects gasoline spreads to remain strong, based on Moody's expectations of higher demand from the Middle East. Middle and heavy distillate spreads will stay under pressure.