• 4 minutes Energy Armageddon
  • 6 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 12 minutes "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 9 hours Is Europe heading for winter of discontent with extensive gas shortages?
  • 18 hours "False Flag Planted In Nord Stream Pipeline, GFANZ, Gore, Carney, Net Zero, U.S. Banks, Fake Meat, and more" - NEWS in 28 minutes
  • 3 hours ""Green" Energy Is a Scam. It Isn't MEANT to Work." - By James Corbett of The Corbett Report
  • 9 hours Wind droughts
  • 6 days Kazakhstan Is Defying Russia and Has the Support of China. China is Using Russia's Weakness to Expand Its Own Influence.
  • 1 day Xi Is Set To Be Re-Elected As China’s Leader
  • 9 days Oil Prices Fall After Fed Raises Rates
  • 7 hours 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 2 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 2 hours Europeans and Americans are beginning to see the results of depending on renewables.
  • 8 hours Australian power prices go insane
  • 11 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Does This "Panic Index" Show A Major Crisis Coming In Oil And Gas?

Little-reported but extremely critical data point for the oil and gas industry emerged yesterday. With insiders in the debt business saying that risk levels in the sector have risen to unprecedented levels.

That came from major ratings service Moody’s. With the firm saying that one of its proprietary indexes of credit problems in the oil and gas sector has hit the highest mark ever seen. Related: $32 Billion Loss Forces Pemex To Downgrade Offshore Ambitions

That’s the so-called “Oil and Gas Liquidity Stress Index”. A measure of the number of energy companies that are facing looming credit problems because of overextended debt.

Moody’s said that its Stress Index rose to 27.2 percent as of this week. Marking the highest level ever seen in this key indicator.

In fact, that level is now considerably worse than seen during the last recession. When the Stress Index topped out at 24.5 percent. Related: This Might Be A Multi-Billion Opportunity For Oilfield Services

Moody’s said that the big jump in the index comes after a significant number of downgrades to energy company credit during February. With the firm having its biggest month ever for lowered credit scores — with a total of 25 firms seeing downgrades to their debt.

Those downgrades are largely affecting the exploration and production space. With 17 of the affected firms coming from the E&P sector. But Moody’s also said that oilfield services firms have been hit with lowered credit ratings.

Critically, the firm said that 10 E&P companies saw ratings on their corporate liquidity cut to the lowest level possible during February. Suggesting that these companies are facing serious issues when it comes to maintaining operating capital. Related: How To Spot Survivors In North American Oil

And Moody’s didn’t mince words when it came to forecasts for the rest of 2016. With Senior Vice President John Puchalla saying, “The composite LSI has been increasing since November 2014 and has moved above its long-term average. This progression signals that the default rate will continue to rise as the year progresses.”

All of which suggests there’s a lot of pain to come in the oil and gas space. Watch for more defaults and bankruptcies coming in the E&P sector.

Here’s to getting ready

By Dave Forest

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News