Moody's Investors Service has just released its Asian oil and gas compendium, entitled “Credit impact of lower oil prices” which brings together a suite of research that analyses the credit impact of lower oil prices on corporates and sovereigns in the Asia-Pacific region.
Following the collapse of crude oil prices in recent months, the compendium is designed to enable investors to more easily access Moody's recent publications.
“The steep drop in crude oil prices since mid-2014 will materially reduce the earnings and cash flows of Asian oil & gas companies and weaken their credit metrics in 2015,” said Vikas Halan, a Moodys vice president and senior credit officer, on Monday.
At the same time the low prices will benefit most Asia Pacific sovereigns, given the regions status as a net oil importer, he added.
Crude prices more than halved between June 2014 and January 2015, reflecting higher-than-expected oil production in the US and lower demand in emerging markets.
At the same time, Moody's said that with the slowing growth in worldwide demand, oil markets would likely remain oversupplied in the next two years.
“The demand-supply imbalance may be exacerbated if Chinas economic growth slows sharply or if significant lifting of economic sanctions on Iran further increases oil volumes,” it said.
Moodys has lowered its price assumptions for Brent crude to US$55 a barrel through 2015 and US$65 a barrel in 2016.
Moodys Asian oil & gas compendium contains reports entitled: Most Asian oil & gas companies remain well-positioned in lower oil price environment; Credit quality of Chinese national oil companies resilient to oil price decline; Malaysias revised Budget leaves sovereigns fiscal consolidation trend intact; and Asia Pacific sovereigns: Credit impact of lower oil prices.
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