January 8, 2019 (MLN): S&P Global Ratings said today Asia-Pacific oil producers have sufficient financial cushion to absorb softer oil prices, revealed a recently issued press release.
According to the press release, the rating agency believes other factors will more likely drive credit profiles, namely capital spending, reserve replenishments, acquisitions, and shareholder remunerations.
S&P Global Ratings recently lowered its oil price expectations for Brent and West Texas Intermediate (WTI) crude oil for 2019 by $10 per barrel (bbl) to $55/bbl and $50/bbl respectively, and for 2020 by $5/bbl to $55/bbl and $50/bbl respectively.
Our long-term oil price deck for 2021 and after remains at $55/bbl for both Brent and WTI. Brent and WTI averaged US$70/bbl and US$63/bbl in 2018 respectively, says the press release.
Additionally, our gas price expectations stay unchanged. Stable gas prices will help offset the impact of lower-than-expected oil prices.
“Our lower oil price assumptions reflect slowing demand and rising supply globally,” said S&P Global Ratings analyst Danny Huang, “Assuming all else is equal, lower-than-expected oil prices should not affect the ratings on regional oil firms, which are well buffered at the current rating levels.”
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