Standard & Poor's reports that the credit outlook for the global oil and gas industry is generally favorable for 2007.

Yet, oil and gas credit trends in the U.S. are not likely to be as favorable as in the past few years, due to weather patterns that affect demand and price volatility from resource nationalism and geopolitical developments, the firm reports.

In Canada, rising development and production costs have put some pressure on credit quality for E&P companies. In Europe, the outlook is positive due to high commodity prices, sustained refining margins and a strong near-term price outlook for petrochemicals. In Australia, robust hydrocarbon prices during the near- to intermediate term are expected to work in producers' favor, and the ratings in the E&P sector will benefit from revised long-term assumptions for producers, S&P reports.

Meanwhile, the major E&P companies in China will be looking to domestic and overseas acquisitions to deal with growing demand, shrinking resources and their desire to take advantage of higher oil prices, the firm's analysts report.

Comments