As oil prices continued to slide, retreating swiftly from the year’s highs the commodity hit last week, the decline is now hurting many global oil companies.
Weaker demand for oil, a rebounding U.S. dollar and slower growth in emerging economies has all contributed to the drop in oil prices.
CCTV America’s Shraysi Tandon reports.
Oil companies feel the pressure from sliding marketLast month, credit ratings agency Standard & Poor's downgraded global oil giant Exxon Mobil from AAA to AA+.
Last month, credit ratings agency Standard & Poor’s downgraded global oil giant Exxon Mobil from AAA to AA+. The company had held on to its AAA rating for over 60 years. Exxon Mobil is just one of many casualties caught in the volatile oil market.
Earlier this week, two publicly traded U.S. oil and gas companies, Ultra Petroleum and Midstates Petroleum, filed for bankruptcy.
According to a recent report from consulting firm Deloitte, about a third of the worlds publicly traded oil companies are at a high risk of going bankrupt this year.
But it’s not just the oil and gas firms that are affected. Many oil producing countries, including many in the Gulf States, are also being hit hard.
“We’re going to see a further $100 billion or so in terms of lower revenues from oil exports and this is now beginning to affect not just the financing, but also the economies in terms of their economic activity,” Masood Ahmed, director of Middle East of the IMF said.
As oil prices continue to fluctuate, with no end in sight, oil economies are being forced to diversify their revenue streams and oil companies are bracing for a grim 2016.