Shocks of Feast or Famine Ravage an Industry
The actions conclude reviews started in January and February by Moody’s, which expects that global oil prices will remain weak over the medium term. The world is “awash in oil” and high inventories and production are declining slowly, Moody’s analysts led by Terry Marshall said in a March 30 report.
Bloomberg
Three Oil Majors Have Debt Ratings Cut by Moody's on Prices Rout
Three of the world’s largest energy companies had their credit ratings lowered by Moody’s Investors Service on the expectation that oil prices will stay low for longer and cause leverage concerns.
Chevron Corp. and Royal Dutch Shell Plc had their ratings reduced by one level, while Total SA’s was cut two steps, according to statements by the New York-based rating company on Friday. Chevron will generate negative cash flow amid rising debt for at least the next two years, while Shell will have elevated leverage following its acquisition of BG Group Plc, Moody’s said. Prices are expected to stay low through this year and next and continue to pressure Total’s operating cash flows and credit metrics, Moody’s said.
Oil companies big and small are having their credit ratings cut as the collapse in crude prices reduces cash flows and limits their ability to sustain debt payments. Prices in New York are down by more than 60 percent from a mid-2014 peak.
Libya’s self-declared National Salvation government steps down
One of Libya’s rival governments has resigned, a step that helps efforts by a new, UN-brokered unity government to assert itself in the capital Tripoli despite opposition from some local militias. In a statement, the Tripoli-based National Salvation government said it would “cease duties” as executive authority, and therefore absolve itself of responsibility for the country’s fate. “We put the interests of the nation above anything else, and stress that the bloodshed stop and the nation be saved from division and fragmentation,” the statement read. Western nations view the new unity government as the best hope for ending Libya’s chaos and uniting all factions against an increasingly powerful Islamic State affiliate, which has seized the central city of Sirte. Another government, based in the eastern city of Tobruk, still opposes […]
Opinion: Why is Iran “Openly” Announcing its Presence in Syria?
The deputy coordinator of the Iranian Army’s Ground Forces General Amir-Ali Arasteh announced that his country will send “special forces from Brigade 65 and other units to Syria to work as advisers” and added that Iran may decide at some point to use special forces and snipers as military advisers in Iraq and Syria. So why is Iran “openly” admitting its involvement in Syria now? It is known that Tehran has mercenaries and militias working for it. These include Hezbollah terrorists and forces of the Revolutionary Guards’ units that fight in support of the criminal Bashar Al-Assad. However, Iran has always denied this and its role in Syria has been shamefully overlooked by western media. The Obama administration has also overlooked Tehran’s villainous role in supporting the criminal of Damascus, and before that its supporters in Iraq. So why is Iran publicly announcing its deployment of troops to Syria? […]
Iran Steps Up Offense in Oil Market Battle With Pricing Discount
Iran ratcheted up its offense in the oil market after breaking a pricing tradition, signaling it’s seeking to win market share at a time when rival producers are trying to forge a deal on freezing output. State-run National Iranian Oil Co. will sell the Forozan Blend crude for May to Asia below the level offered by rival Saudi Aramco for Arab Medium, the third month the Persian Gulf state is giving the discount after setting it at a premium for almost seven years through February 2016, data compiled by Bloomberg show. NIOC will also sell the Iranian Light grade to Asian customers at 60 cents below Middle East benchmark prices, a company official said on Friday, asking not to be identified because of internal policy. While producers including Saudi Arabia, OPEC’s biggest member, and Russia are due to meet in Doha on April 17 to discuss a deal to […]
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“The debate over Russia’s potential is timely as OPEC and Russia discuss a coordinated production freeze,” Goldman said.
Goldman Sees Russia Oil Output Rising Amid Doha Freeze Talks
Russian oil and condensate production will rise through 2017, even as the nation prepares for talks on an output freeze with other producers, according to Goldman Sachs.
Russian output will climb to 11.2 million barrels a day this year from 11.1 million barrels in 2015 due to a weak ruble, low-cost deposits and a tax rate that adjusts to lower prices, Goldman analysts including Geydar Mamedov said in a research note dated April 7. Production is projected to increase to 11.4 million barrels a day in 2017, it said.
“The debate over Russia’s potential is timely as OPEC and Russia discuss a coordinated production freeze,” Goldman said.
Goldman’s projections come as top exporters, including Russia and Saudi Arabia, are set to meet in Doha, Qatar on April 17 to discuss freezing output at January levels. Oil prices collapsed after a 2014 decision by the Saudi Arabia-led Organization of Petroleum Exporting Countries to defend market share rather than cut output amid a supply glut.
