Moody’s said major companies should have the capacity to withstand a 12 to 24 month period of oil price weakness without experiencing strong downward pressure on their credit ratings.
Looking ahead, Moody’s said that slower activity in the oil and gas sector should eventually lead to a reversal in the sharp rise in inflation that has recently hiked up industry costs.
However, Moody's noted that the fall in oil prices is likely to lead to project delays and deferrals.
"While most of the projects that have already been sanctioned are expected to go ahead, future final investment decisions are likely to be at risk and will depend on how economic conditions and oil prices evolve over the coming months," said Moody's senior vice president, Tom Coleman.
OPEC production cuts are likely to play a major part in propping up oil prices, the agency said.
Author: Ksenia Kochneva
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Oil To Be Stable Acc. To Moody's
The ratings agency say the outlook for the global integrated oil industry is stable, despite a recent slide in energy prices amid the global economic downturn and slowing demand
