LONDON, March 25 (UPI) -- A day after a downgrade from Standard & Poor's, Italian energy company Eni said similar action was taken by Moody's, citing lingering risk from oil prices.
"Rating agency Moody's Investors Service lowered Eni's long-term corporate credit rating to 'Baa1', outlook stable, from 'A3' on review for downgrade," the company confirmed in a statement.
Standard & Poor's said earlier this week its outlook for Eni in 2016 was negative because "persistently" low energy prices meant the company would struggle to make a profit. The ratings agency already downgraded several other energy companies after it estimated Brent crude oil prices would average $40 per barrel for 2016, under the best scenario.
Brent crude oil traded at around $40.50 per barrel early Friday, after dropping below the $40 mark earlier this week.
Eni said it lowered its forecast for crude oil prices that would support spending from $63 per barrel through the end of this year to $50 per barrel.
Moody's said its downgrade from Eni was in part a result of a sector-wide review in January that was prompted by the decline in crude oil prices. Tom Coleman, a senior vice president at Moody's, said Eni could improve its position by selling off some of its assets and focusing more on low-cost production operations.
"Eni's operations and credit metrics will be weak in 2016 and 2017 as low oil prices and weak downstream gas markets continue to take a toll on the company's cash flow," he said in a statement.