The warning comes as Brent crude oil prices yesterday hit their lowest in more than 11 years.
Oil production is running close to record highs and, with more barrels poised to enter the market from nations such as Iran, the US, and Libya, the price of crude is set for its largest monthly percentage decline in seven years.
Brent futures fell by as much as 2% to a low of $36.05 a barrel, their weakest since July 2004.
The world’s richest oil exporters have been forced to revalue their currencies, sell off assets, and even issue debt for the first time in years, as they try to repair their finances.
The price of oil has halved over the past year, dealing a blow to economies of oil producers such as Nigeria, which faces its worst crisis in years, and Venezuela, which has been plunged into deep recession.
Moody’s slashes its oil forecast for 2016 to a barrel https://t.co/pfPp4CTfl3— MarketWatch (@MarketWatch) December 15, 2015
Even wealthy Gulf Arab states have been hit. Last week, Saudi Arabia, Kuwait, and Bahrain raised interest rates to protect their currencies.
Reflecting the determination among the biggest producers to woo buyers at any cost, Russia now pumps oil at a post-Soviet high of more than 10m barrels per day, while OPEC output is close to record levels above 31.5m barrels.
Moody’s expects pressures to mount on the US states of Alaska, Louisiana, New Mexico, North Dakota, and Texas, with those states having to dip into budget reserves to meet shortfalls. New Mexico, North Dakota, and Texas, are more insulated because their economies are more diversified.