Oil is in the red today as Iran and six world powers are in their second and final day of discussions regarding a deal outlining the nuclear program in Tehran, which could result in a rise in oil exports out of the country if Western sanctions are lifted.
Crude oil (WTI) is slipping by 0.86% to $48.26 per barrel and Brent crude is retreating by 0.89% to $55.79 per barrel this afternoon, according to the CNBC.com index.
Iran, the U.S, Britain, France, Germany, Russia, and China are holding discussions in Switzerland and are dealing with the rate at which Western sanctions are being lifted on Iran as a hurdle that could scrap a deal, Reuters reported earlier today, adding that Russia's Foreign Minister Sergei Lavrov told reporters in Moscow that he feels the talks have a good chance of success.
However, Western diplomats minimized their expectations for the discussions.
"If the flood gates to Iranian crude open, (prices) will probably test this year's lows again," Phillip Futures analyst Daniel Ang told Reuters.
If sanctions are lifted Iran could increase oil production by close to 500,000 barrels per day within six months and by another 700,000 bpd within another year, Reuters said.
Separately, TheStreet Ratings team rates BP PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BP PLC (BP) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $7,247.00 million or 33.85% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.05%.
- The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
- BP, with its decline in revenue, slightly underperformed the industry average of 19.9%. Since the same quarter one year prior, revenues fell by 21.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BP PLC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for BP PLC is currently extremely low, coming in at 8.97%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.95% trails that of the industry average.
- You can view the full analysis from the report here: BP Ratings Report