LONDON (Reuters) - Credit rating agency Standard and Poor’s has slashed its oil and gas price forecasts and warned that it could downgrade firms across the two sectors in the next couple of months.
In a report published on Tuesday, S&P said it had cut its 2016 Brent and U.S. crude forecasts to $40 a barrel from previous respective projections of $55 and $50.
It also lowered its 2017 forecast to $45 a barrel from $65 and $60 respectively and to $50 a barrel for 2018 and beyond from $70 and $65. Benchmark Henry Hub gas prices were cut to $3 per million British thermal units this year, 3.25 in 2017 and 3.5 in 2018.
“We expect to conclude our reviews of the E&P issuers that we rate, under these new assumptions, within the next month or so.”
“Given the meaningful changes to our price decks, particularly the long-term deck, we could see negative rating actions on many of our investment-grade rated issuers.”
The report did not mention any changes to sovereign rating as a result of the price forecast cuts.
Reporting by Marc Jones, editing by Nigel Stephenson
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