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

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

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 the energy sector's trailing twelve-month default rate now stands at 9. 1%., in comparison to 11. 8% in June. This is the first time that the default rate is below double digits since April 2020 and at a far lower level