S&P forecasts stability in oil, gas sector
Oct 25, 2011 | 05:23 PM
| Jo Isenberg-O’Loughlin
NEW YORK The U.S. oil and gas sector has been issued a solid "report card" by Standard & Poors (S&P) analysts, indicating its credit quality should be relatively stable going into 2012 despite a tepid economy and an increasing risk of recession.
"We believe that a weak but gradually improving economy will support strong oil prices plus marginally higher prices for natural gas, which accounts for 30 percent of U.S. industrial energy usage, though supply will set the direction of gas prices," credit analyst Thomas Watters wrote in a 28-page report.
The New York-based ratings agency cited a 2012 baseline forecast for West Texas Intermediate (WTI) oil of $98.50 per barrel, a level analysts said bodes well for exploration and production companies with a focus on oil, as well as for oilfield and contract drilling companies, a major end market for oil country tubular goods (OCTG).....
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