Fitch warned today that the cash-strapped European oil majors are unlikely to break even until next year.
It comes after Royal Dutch Shell, BP, Total and Eni revealed a disappointing set of first half results. They didn’t benefit as expected from oil prices swelling about a third during this period.
The credit ratings agency said the results suggest big oil are "likely to generate large negative free cash flows for the full year as average oil prices remain lower than in 2015."
"This will push up leverage in the near term but we expect cash deficits to fall in 2017 as oil prices start to gradually recover and the majors progress with their cost-cutting initiatives," it continued.
They're likely to struggle until crude hits more than $50 per barrel, which Fitch has pencilled in for 2017-18, at which point oil majors' cash flows should improve significantly.
The oil industry has taken on more debt as a result of crude prices crashing from the middle of 2014. They've made deep cost cuts and streamlined operations, but many have borrowed to fund investments and pay dividends.
Fitch said that while oil majors' capital spending fell in the first six months of 2016, this wasn't enough to offset less cash coming in.
It also cautioned that assets sales, part of their efforts to weather low prices, could also fetch less than what was initially hoped for.
"Our assumptions on disposals are more conservative than the companies' guidance as low oil prices and high supply of assets for sale have resulted in a buyers' market. This means some disposal programmes may not be realised in full, Fitch said.