Fitch: Low commodity prices to slash US energy state revenues into 2016

With crude oil and natural gas prices likely to remain soft, US 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 that 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.

Block added, “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.”

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Shell Leverages Data to Transform from Reactive to Predictive Operations

This 6-page report describes how Shell engaged in a massive project with OSIsoft to transform the...

Selection, Use, Care and Maintenance of FR Clothing

For industries operating in an inherently dangerous environment, the importance of selecting the ...

Evolution or Revolution: IT / OT convergence means a world of possibilities

The oil and gas industry is experiencing a rapid paradigm shift in regards to digital transformat...

Predict, Prescribe, Profit: Creating a World that Doesn't Break Down

What are you doing to reduce unplanned downtime at your plant? Equipment breakdowns and process i...