Standard & Poor's Ratings Services said in a report that credit quality for the U.S. oil and gas sector should remain relatively stable in 2012. The industry economic and ratings outlook is titled "Robust Oil Prices Keep U.S. Oil And Gas Sector Largely Stable."

"U.S. oil and gas companies should stay relatively stable this year, despite a tepid economic recovery and our expectation for very weak natural gas prices," said Standard & Poor's credit analyst Thomas Watters. "Supporting our credit outlook is our view that oil prices will remain healthy."

We also believe that exploration and production (E&P) capital budgets for 2012 will be relatively similar to 2011, supporting oilfield service companies and contract drillers. However, E&P companies with meaningful exposure to natural gas, a minority of the issuers we rate, could see some negative rating actions in light of the unyielding supply of natural gas and the associated pricing pressure.

Our 2012 baseline forecast for West Texas Intermediate (WTI) oil of $86.32 per barrel bodes well for E&P companies with a focus on oil, as well as for oilfield services and contract drilling companies. Despite oil trading near $100 at times, consumers haven't reduced driving. This has sustained gasoline and diesel demand and kept refineries operating at high rates, at least in the Mid-Continent region of the U.S.

The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com.