New Delhi, June 17 (IANS) With international oil prices climbing back towards $50 a barrel after touching a 12-year low in January, Moody’s Investor Service said on Friday that amid continuing challenges for energy companies, its medium-term outlook for the sector remains unchanged.
“Amid continuing challenges for energy industry companies and oil exporting countries, Moody’s Investor Service said its medium-term outlook for the sector remains unchanged, reinforcing the view that oil market participants’ credit metrics will continue to remain under pressure, despite the recent uptick in oil prices,” Moody’s said in a report.
“Moody’s notes that adjusting to structurally lower oil prices will remain a medium-term fiscal and economic policy challenge for most oil-exporting sovereigns,” the American rating agency said in a report titled “Challenging conditions for oil-related entities remain unchanged despite near-term price rebound.”
“Moody’s assumes a medium-term oil price band of $40 to $60 per barrel (bbl) for both WTI (West Texas Intermediate) and Brent crude and upwardly revised its shorter-term oil price estimates for these crudes to $40/bbl in 2016, $45/bbl in 2017 and $50/bbl in 2018,” it added.
The Indian basket of crude composed of 73 per cent sour grade Dubai and Oman crudes and the rest of sweet grade UK Brent closed trade on Thursday at $45.22 per barrel, after having risen to $49.35 last week.
In this regard, Minister of State for Finance Jayant Sinha said last week that the government’s fiscal and inflation calculations will not be impacted if oil prices stay below the $60 mark.
He said the ministry’s analysis is based on assumption that oil prices would remain in the $40-60 a barrel range.
On Thursday, on the sidelines of an event here, Sinha told reporters that he was concerned about the turmoil in the Middle East and its implications on crude oil prices.