NEW YORK (TheStreet) -- Shares of Sanchez Energy Corp. (SN) - Get Report are down by 5.23% to $11.95 in late morning trading on Monday, as the energy sector takes a hit from today's decline in the price of oil.

Crude oil (WTI) is lower by 3.81% to $43.13 per barrel and Brent crude is falling by 3.51% to $52.75 per barrel this morning, according to the CNBC.com index.

Oil prices are dropping today due to speculation regarding the U.S. supply increase and the possibility of a nuclear deal with Tehran.

There is concern that the record U.S. supply may start to burden the country's storage capacity. U.S. crude tankers may fill up as cuts in the number of drilling rigs fail to slow down production growth, Bloomberg reports.

There is also the possibility of a nuclear deal with Tehran, which could result in more oil exports out of Iran, Reuters reports.

Western countries are looking for concessions from Iran that could aid in securing an agreement in nuclear discussions, after the U.S and European powers expressed a willingness to work out suspensions of U.N sanctions.

Global oil supplies are growing at a rate of 1.6 million barrels per day, Societe Generale estimates, Reuters notes. The French bank forecasts that the growth will jump to 1.7 million bpd in the second quarter.

Separately, TheStreet Ratings team rates SANCHEZ ENERGY CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SANCHEZ ENERGY CORP (SN) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• SN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 53.76%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
• Currently the debt-to-equity ratio of 1.62 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.16, which shows the ability to cover short-term cash needs.
• The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SANCHEZ ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
• SANCHEZ ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SANCHEZ ENERGY CORP turned its bottom line around by earning $0.18 versus -$0.55 in the prior year. For the next year, the market is expecting a contraction of 1033.3% in earnings (-$1.68 versus $0.18).
• The gross profit margin for SANCHEZ ENERGY CORP is currently very high, coming in at 78.15%. Regardless of SN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SN's net profit margin of 23.64% significantly outperformed against the industry.
• You can view the full analysis from the report here: SN Ratings Report