Oct 23, 2013, 11:32 PM
News Code: 80872773
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Fitch: Oil, gas prices may decrease in 2014 if Iran sanctions ease

Tehran, Oct 23, IRNA -- Fitch Ratings says oil and gas companies may see prices come under pressure in 2014 if US-imposed economic sanctions on Iran are eased as a result of improving relations between the two countries.

This could see Iran increase the supply of oil on world markets by around 800,000 barrels per day leading to a downward impact on prices.



In its 2014 Outlook published on Thursday, Fitch also says it expects industry operating costs for equipment, facilities, materials and personnel (both skilled and unskilled), among others, will continue the upward trend started in 2010 as demand for these products and services remains stable.



However, the rate of change could be lower than in 2013 due to our expectation of a slightly lower hydrocarbon price environment and a follow-on slowdown in exploration and development spending.



A lower hydrocarbon price environment also affects Fitch's capital expenditure forecasts. Our current oil and gas corporate price deck shows a decline in the Brent oil price of 6.8% in 2014 and a decrease in the aggregate capex of the seven western European upstream and integrated companies we rate of 5.9% in the same period. This is roughly equal to a USD7.2bn reduction in capex for the European oil and gas sector in 2014.

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