US Regulatory Rollback to Have Small Effect: Fitch

The U.S. government's proposed regulatory rollbacks are not expected to have much impact on the country's energy sector, global rating agency Fitch Ratings said Wednesday.

The U.S.' President Donald Trump proposes to rollback regulations on the country's oil, natural gas and coal industries.

During his candidacy and after taking office in the White House, Trump promised to "unleash" an energy revolution in the U.S.

Although he signed executive orders to remove some regulatory limitations on the sectors, a comprehensive bill was not presented to Congress.

"The proposed rollbacks and delayed implementations of a number of federal environmental regulations should modestly benefit the cost structure of parts of the U.S. exploration and production (E&P) industry," Fitch Ratings said.

"However, this is likely to have only a small effect on the E&P industry's activity levels in the short term, with efficiency gains and hydrocarbon pricing continuing to be a much bigger driver of overall activity levels," it added.

The rating agency stressed that it would be economics of the industry, rather than regulations, that would make an impact on the energy sector.

"Fitch expects E&P capex and rig counts to increase markedly in 2017 as regulatory change is not likely to be the principal driver," Fitch said.

"Rising capex and output should continue to be largely driven by efficiency gains," it added.

With efficiency gains, American oil producers managed to increase the U.S. production level up more than 10 percent from 8.47 million barrels per day (mbpd) last October to 9.35 mbpd last week.

(Anadolu Agency)

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