The rapid spread of COVID-19 and a crude oil price war between OPEC and Russia are having a major negative impact on the North American oil industry. That includes companies with major operations in this province.

DBRS Morningstar, a global credit ratings agency, has placed all North American oil and gas, and oil field service issuers Under Review With Negative Implications.

DBRS Morningstar made the announcement this week in the wake of extreme price drops in the industry and increased volatility in the crude oil and petroleum markets.

That reflects the credit ratings agency’s belief that that downgrades for at least a significant part of the portfolio is likely.

The current price of Brent Crude is just over $25 per barrell.

The price drops are largely caused by the rapid spread of COVID-19, and the oil price war between OPEC and Russia. Companies that have been put Under Review with Negative Implications include, Husky Energy, Suncor, Chevron, and Imperial Oil.

DBRS Morningstar says because of recent global events, the companies affected are expected to experience “considerable downward pressure over the weeks and months to come.”

That said, the credit agency anticipates the eventual recovery of oil prices.

https://www.dbrsmorningstar.com/research/358801/dbrs-morningstar-places-north-american-oil-gas-and-oil-field-service-issuers-under-review-with-negative-implications.

Canadian Association of Petroleum Producers Working with Government to Find Economic Opportunities

The Canadian Association of Petroleum Producers cannot comment directly on DBRS’ rating policies but it did issue a statement last week outlining the challenges facing the industry.

CAPP says it is encouraged by the federal and Alberta governments’ economic stimulus announcements and it is working with both the federal and provincial governments to find opportunities for economic investment and employment to help the “hundreds of thousands” of Canadians who depend on the energy industry.