Credit Quality Of Oil And Gas Loans And Bonds Has Improved Significantly

SectorOil & Gas

Oil and gas companies’ credit quality is improving as oil prices increase. Significant oil and gas supply aided by the shale revolution, followed by plummeting oil and gas demand due to the the COVID-19 crisis, brought oil prices and companies to their knees until recently. As the economy has been reopening, good news for the beleaguered energy sector may be here so long as the pandemic does not worsen.

Oil prices, a key indicator for the financial health of oil and gas companies, are presently at about $71, a level not seen since April 2019. Today’s oil price level is a 255% increase from April 2020 when COVID-19 caused oil and gas demand to plummet. For the second half of this year, the U. S. Energy Information Administration is forecasting an average of $72 for Brent crude oil. Brent and WTI Crude Oil Forecast The Fitch U. S. Leveraged Loan Default Insight released today by Fitch Ratings, shows that more...