Moody's cuts 2016 oil price forecasts



NEW YORK: -- Moody’s has sharply lowered its forecasts for oil prices next year against the threat of a sustained global surplus.

The ratings agency has brought down its price assumptions for Brent crude and West Texas Intermediate by up to 10 dollars a barrel – with Brent on $43 and the North American benchmark WTI forecast to drop to $40.

The predictions are well above current price levels which have been buffeted by the glut in supply which has been caused mainly by record production by OPEC countries.

There are signs the strategy has brought problems for the US shale industry and non-OPEC producers such as Russia.


-- (c) Copyright Euronews 2015-12-16

This is continued bad news for Thailand fuel excise tax that is based on price. Fiscal year 2016 is already full of high-priced projects that even now cannot be entirely funded by government revenue collection. Lower fuel prices means less treasury revenues.

The Thai government will have to scale back its infrastructure projects, limit its populist (or whatever is the politically correct term now) programs, and/or government pay raises. The final cost and interest for the Chinese dual rail project becomes a very sensitive issue - might be better to delay until 2017.

But don't expect any cuts to the military budget. Do expect more deficit spending by the military that will be passed onward to the next elected government and generations of Thai people.