There will be no recovery in oil prices in 2016.
That’s according to US statistics firm Fitch Ratings. It also predicts gas prices in Europe will remain low until oil prices start to pick up in 2017.
The report states: “Progressive taxation has helped companies ease the impact of low prices but Russia’s mineral extraction tax will rise next year while export duties will remain flat.”
It adds this will lead to a 5% – 10% drop in oil companies’ earnings with Brent at $55 a barrel (£37/bbl).
The report went on to state lower earnings “could lead to further capital expenditure cuts, adding to the medium-term pressure on Russian oil production, which is expected to be flat in 2016 on record 2015 volumes and then to start slowly declining.”