A Slippery Slope for Oil Outfits

S&P Ratings says factors such as demand swings, reserve replacement, and geopolitical risks could hurt the sector's credit quality

U.S. oil and gas credit trends are likely to be more daunting in 2007 than in the past few years, as weakening fundamentals, particularly for natural gas, result in a softening of prices. In 2006, upgrades outpaced downgrades by more than two to one, in part due to robust industry conditions deriving from record hydrocarbon prices. For 2007, Standard & Poor's Ratings Services expects factors that influence crude oil and natural gas prices to have a significant impact on ratings activity and trends.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.