Fitch revises base case crude price deck

Fitch Ratings has revised its base case price deck downward for crude oil to reflect continued expected market weakness near term. Both base case West Texas Intermediate (WTI) and Brent are affected.

For 2015, Fitch has revised its base case price deck to match its stress case price deck which is $50 per barrel for WTI ($55 Brent). For 2016, the base case price deck for crude has been lowered to $60 for WTI ($65 Brent).

This downward revision stems from the potential for a protracted downturn in prices beyond calendar 2015. Long-term base case price deck assumptions for crude remain unchanged at $75 per barrel for WTI ($80 Brent) which Fitch believes still remains the marginal cost of full cycle production.

Ultimately, Fitch expects a supply response due to capital expenditure cuts that will result in less drilling and cause prices to revert toward Fitch's long-term base case price assumption.

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