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With Gulf producers starting to feel the pinch brought on by the $45/B collapse in oil prices since June, ratings agencies have already begun to reassess their outlooks for several Gulf states.
Moody’s expects Bahrain and Oman to be hardest hit by falling oil prices, while Saudi Arabia, Kuwait, Qatar and the UAE “would be resilient to the resulting pressures without significant policy adjustments…” Bahrain and Oman have the highest fiscal breakeven price in the GCC and the “lowest reserve buffers in the GCC,” the ratings agency said in a recent report on GCC Sovereigns.
Moody’s 4 December report forecasts 2015 Brent crude prices in the range of $80-85/B – and that is already looking optimistic: Brent was trading around $64/B on 11 December. Ditto, S&P, which on 1 December forecast an average Brent price of $80/B in 2015 and $85/B for subsequent years.
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