Asia-Pacific oil companies have financial cushions to weather lower oil prices
Our long-term oil price deck for 2021 and after remains at $55/bbl for both Brent and WTI.
HONG KONG (Dunya News) – S&P Global Ratings on Tuesday said that Asia-Pacific oil producers have sufficient financial cushion to absorb softer oil prices.
According to the statement issued on Tuesday, 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.
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."
