According to Fitch Ratings: in 2017, certain oil producing countries should experience another difficult year
Many oil producing countries still have a long way to go. According to a report of the American Fitch Ratings Agency, the barrel should finish the year at a rate of 52.50 $, putting continuous pressure on the budgets of the majority of the producers in Eastern Europe, in the Middle East and in Africa.
The experts of Fitch focused their studies on 14 countries in these areas and revealed that 11 of them would be unable to balance their budgets if their average oil cost forecast proves to be correct. Namely, if the barrel finishes the year below the average of 52.50 dollars, these 11 countries will experience more difficulties to finance their budgets.
The countries which have a price of profitability, lower than the average set by the agency of rating are Kuwait (45 $), Qatar (51 $) and the Republic of Congo (52 $). It should be stressed that in these countries, the oil companies worked out solid programs of reducing oil production costs. Moreover, the report indicates that Nigeria will need a price of barrel estimated at 139 $ to stand to benefit. It is followed by Bahrain with 84 $.
A few months ago, the analysts estimated that the barrel should reach 60 $ before the end of the year. But the decision of the American schist producers to increase their amounts of extraction and the rise of stocks across the Atlantic has not been taken into account. Although, it appears obvious that the American producers will not move back, most optimistic bet on the maintenance of the OPEC’s production cut and the reduction in American stocks (started last week) to see the barrel reaching the threshold of 60 $.
Source: Ecofin (algerie-eco.com)