Fitch Ratings continues to maintain a positive view on the U.S. energy industry even as crude and natural gas prices pull back from second-quarter levels, according to its quarterly report, Oil & Gas Insights.
Slowing demand coupled with a low hurricane activity in the Gulf of Mexico has enabled storage levels for both oil and natural gas to reach higher than average levels. Additionally, geo-political concerns in hot spots like Iran, Iraq, Venezuela and Nigeria have not resulted in supply disruptions.
From a bondholder perspective, companies continue to generate significant cash flows as commodity prices remain well above historical averages. Most companies have reached their targeted capital structures resulting in minimal cash flows devoted to debt reduction.