The prices for Brent and West Texas Intermediate crude oil will hit $50 a barrel for the remainder of 2017 and 2018 and $55 a barrel from 2019, according to Standard & Poor’s base case, the rating agency said in its "EMEA Oil & Gas: A Mixed Picture In 2017" report published July 20.
EMEA region includes Europe, the Middle East, and Africa.
S&P noted that European producers and service companies continue to react to the oil industry downturn, perpetuated by oil prices around $50 a barrel and the risk of a move lower, which is casting a long shadow over ratings across the sector globally.
"Most upstream ratings are underpinned by our assumptions of stronger performance and lower leverage than in 2016," said the report.
"Players with downstream assets still benefit from supportive refining margins, which could even strengthen in the near term especially if oil prices remain depressed," said S&P Global Ratings credit analyst Simon Redmond.
In contrast, many oil field service companies are highly leveraged and face tough prospects, the report reads. Ten out of 17 EMEA oil field service companies are rated 'CCC+' or lower indicating a dependence on supportive market conditions, a risk of financial restructuring, or an actual default.
On July 20 the price for September futures of Brent oil hit $49.9 per barrel as of 7:26 a.m. EDT (GMT-4). The price for August futures of West Texas Intermediate (WTI) hit percent and stood at $47.3 per barrel as of 7:20 a.m. EDT (GMT-4).
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