Moody s analysts raised their credit rating on oil and gas explorers and integrated oil and gas companies to positive from stable today as they expect oil prices to stay high well into 2012, offsetting low natural gas prices. Oil rig counts are at 25-year highs, and producers should be able to expand margins even as oilfield services costs rise.
While high oil prices could convince consumers to cut back on consumption, the analysts don t expect that to happen in the near term.
West Texas oil futures are hovering around $108 per barrel. Like other analysts, Moody s analysts are playing catch-up: their oil price target is still well below current prices, but above their own previous expectations.
We raised our assumption for benchmark WTI crude to $90/bbl in 2011, up from $80/bbl, and to $85/bbl in 2012, up from $80/bbl. Beyond 2012 we assume $80/bbl. For Europe s Brent benchmark, we assume a price of $100/bbl for 2011, but it is unclear how long this premium will last. For a stress case, we assume $60/bbl.
While high oil prices could convince consumers to cut back on consumption, the analysts don t expect that to happen in the near term.
West Texas oil futures are hovering around $108 per barrel. Like other analysts, Moody s analysts are playing catch-up: their oil price target is still well below current prices, but above their own previous expectations.
We raised our assumption for benchmark WTI crude to $90/bbl in 2011, up from $80/bbl, and to $85/bbl in 2012, up from $80/bbl. Beyond 2012 we assume $80/bbl. For Europe s Brent benchmark, we assume a price of $100/bbl for 2011, but it is unclear how long this premium will last. For a stress case, we assume $60/bbl.
