DUBAI — Companies in the six Gulf Arab states are under pressure as governments reduce spending in response to a slump in oil revenues, Standard and Poor’s ratings services said on Monday.



“Corporate and infrastructure companies in the (Gulf Cooperation Council) GCC face a weaker operating environment at present on the back of lower oil prices,” S&P said in a report. Low oil income has slowed government expenditures on which these companies largely depend, it said.



World oil prices have dropped by more than 50 percent since June 2014. The International Monetary Fund forecasts that that will result in a $300 billion drop in revenues this year for the six GCC states. Some infrastructure projects have been scrapped as a result, S&P said.



“We observe, however, that GCC governments continue to invest in large public sector infrastructure projects,” said S&P credit analyst Karim Nassif.



“Still, the longer the oil price remains near current low levels, the higher the likelihood of seeing more infrastructure projects postponed or dropped,” he said.



S&P said the Dubai real estate market is also suffering with residential prices projected to fall by between 10 percent and 20 percent this year. But it said it expected UAE property firms to withstand the correction. Meanwhile, oil prices rebounded Monday, mirroring sentiment across other markets, after pre-weekend losses caused by worries over the economic outlook for the US and China, the biggest consumers of energy.



US benchmark West Texas Intermediate for delivery in October rose 83 cents to $45.51 a barrel compared with Friday’s close.



Brent North Sea crude for November grew 81 cents to stand at $48.28 a barrel in early afternoon London trading.



“Equities are trading to the positive side both in Europe and China and give a positive back-drop to the oil market,” said SEB Markets commodities analyst Bjarne Schieldrop.



Prices had sunk Friday after the US Federal Reserve expressed doubts about the strength of the global economy as it held off from an interest rate hike. The Federal Reserve held its key interest rate locked near zero Thursday, citing worries about how the slowdown in China will hit the US economy.



Trading in oil in currently volatile, with prices surging in the middle of last week on easing concerns over high US supplies. — AFP