Fitch: Global Events and Commodity & Price Trends Affect US Energy States More than National Economy

NEW YORK--()--States with energy economies face greater pressure from external forces including geopolitical events, global marketplace issues, and volatile energy prices and production than they do from U.S. economic fluctuations, according to a new Fitch Ratings report.

'International resource supply and demand, war and international environmental policies are just a few global factors that impact energy states' economies and revenue sources,' said Marcy Block, Senior Director.

The drop in crude oil prices compared to oil-producing state price expectations has created current year and fiscal 2016 budget gaps and increased the unpredictability in budget planning.

The longer the trend in low oil prices continues, Fitch expects energy states' budgets to be more deeply affected by deterioration in linked revenue sources, such as personal income, sales and corporate income taxes, as producers trim their capital investments and work forces.

The development of natural energy sources can represent a significant portion of select states' gross domestic product when considering direct, indirect and 'induced' economic factors.

Fitch believes an outsized presence can leave such states more exposed to sharp shifts in commodity production trends.

The full special report titled 'Positives and Pressures: U.S. Energy States' is available on the Fitch web site at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: Positives and Pressures: U.S. Energy States (Natural Resource Development Provides Economic Benefits and Volatile Revenue Streams)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=865260

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Contacts

Fitch Ratings
Marcy Block
Senior Director
+1-212-908-0239
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Christina Lin
Analyst
+1-212-908-0548
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Marcy Block
Senior Director
+1-212-908-0239
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Christina Lin
Analyst
+1-212-908-0548
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com