Moody decreases midstream energy industry outlook for first time
- 11 June 2020
We have changed our midstream energy industry outlook to negative from stable, the first time our outlook for that sector has been negative, APA-Economics reports citing Moody.
While the midstream sector has structural attributes that give it stability, the broader energy sector today grapples with a simultaneous demand shock and a supply shock.
We project that EBITDA in the midstream sector will decline by at least 5% in 2020, below our -5% to 5% EBITDA growth range that would indicate a stable outlook for the sector.
Midstream growth capital spending will decline in 2020-21, furthering declines in future EBITDA as spending cuts continue.
Pipeline revenue for crude and refined products is susceptible to variable throughput volumes, which have recently declined. But interstate natural gas pipelines operate with regulated, fee-based contracts, and have little price or volume risk.