The massive wave of shut-in production by E&Ps has started to take a toll on the midstream sector, according to a new report by Moody’s Investors Service.

The credit ratings firm recently changed the outlook for the global midstream energy sector to negative from stable for the first time, which Moody’s said reflects its view of a decline in the sector’s EBITDA growth this year.

Although midstream cash flow is largely insulated from the full brunt of commodity price and volumetric instability, Moody’s expects the rapid pace and the magnitude of recent production declines in the current downturn to result in at least a 5% decline to the midstream sector’s EBITDA growth in 2020, with only a slight return to growth in 2021.

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