Inform
| |
2 Pages

Fed interest rate hike: implications for the energy sector


Fed interest rate hike: implications for the energy sector

Report summary

On 16 December 2015, the US Federal Reserve raised the target range for the federal funds rate by 25 basis points to 0.25–0.5%. Forward guidance from the Fed suggests rates will rise to 1.4% in 2016, 2.4% in 2017, and 3.3% in 2018. What, if anything, does this mean for the energy sector? Corporate positioning in a low oil and gas price environment will determine the impact as financial markets start to recalibrate risk and place closer scrutiny on bank lending. Specifically, committed developments already underway are likely to be largely unaffected by the Fed move but cash flow negative unconventional players will find banks less supportive, and what debt they do raise will be more expensive. Meanwhile, the renewable sector is considered largely insulated, at least for now. While the cost of borrowing may have just become a little more expensive, the Fed hike is inconsequential when considered in the context of a very low oil and gas price.


What's included?

This report includes 1 file(s)

  • Fed interest rate hike: implications for the energy sector PDF - 972.72 KB 2 Pages, 0 Tables, 1 Figures

Description

This Macroeconomics and Global Trends Inform report analyses key topical events and addresses the implications for the economy and commodity markets.

This report delivers timely analysis of important industry events. Our expert point of view provides clarity to help support informed decision making.

Wood Mackenzie's global economic analysis underpins all our commodity demand analysis, ensuring we continually deliver an integrated and consistent view.

Requester's name : .............
Department : .............
Authoriser's Name : .............
Authoriser's signature : .............
Date : .............
Cost Centre : .............

Questions about this report?

Frequently Asked Questions

Mailenquiries@woodmac.com
  • Europe: +44 131 243 4699
  • Americas: +1 713 470 1900
  • Asia Pacific: +61 2 8224 8898
contact us

Why Wood Mackenzie?

As the trusted source of commercial intelligence for the world's natural resources sector for more than 40 years, we empower clients to make better strategic decisions with objective analysis and advice. Find out more...