Fitch: Low Commodity Prices to Slash U.S. Energy State Revenues Well Into 2016
Link to Fitch Ratings' Report: Sustained Low Natural Resource Prices
Will Slash State Revenue Forecasts
With crude oil and natural gas prices likely to remain soft, U.S. energy
states' weakened revenue prospects are likely to persist well into next
year, according to Fitch Ratings in a new report.
With crude oil prices languishing in the $40-50 range for months now,
losses in related revenue sources that underpin energy states' budgets
are on the rise. 'Stagnant commodity price trends are dampening energy
states' economic growth and are eating into economically sensitive
revenue sources such as sales and personal income taxes,' said Senior
Director Marcy Block. As to which states will be most adversely
affected, the impact will vary considerably.
States with more diverse economies and revenue resources should be able
to weather prolonged commodity price declines more effectively than
those states that rely more heavily on commodity production. This means
states like Alaska, North Dakota and Wyoming are more directly in the
crosshairs of this trend.
That said, states as a whole have long had the financial flexibility to
adjust to these commodity market vulnerabilities. 'Should the prolonged
slump in commodity markets extend into fiscal 2017, we would expect
states to identify fiscally prudent strategies to address vulnerable
state revenue sources,' said Block.
'Sustained Low Natural Resource Prices Will Slash State Revenue
Forecasts' is available at 'www.fitchratings.com'
or by clicking on the above link.
Additional information is available at 'www.fitchratings.com'.
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Copyright Business Wire 2015
Source: Business Wire
(October 13, 2015 - 11:34 AM EDT)
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