Fluctuating U.S. equity prices, as well as weak Chinese economic data is causing crude prices to fall today.
Also hurting oil prices today are comments from New York Federal Reserve President William Dudley suggesting that the U.S. Federal Reserve could raise interest rates sometime this year.
Industry standard Brent crude for November delivery is down by 2.18% to $47.54 per barrel while West Texas crude for November delivery is down by 2.25% to $44.67 per barrel.
Oil prices have more than halved over the past 12 months as oversupply concerns have continued to cause oil prices to fall.
Demand concerns have also depressed prices as China, the world's second largest oil consumer, reported that industrial profits fell at its fastest rate in four years.
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. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.
- BP, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 35.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- BP PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BP PLC reported lower earnings of $1.21 versus $7.34 in the prior year. This year, the market expects an improvement in earnings ($1.92 versus $1.21).
- 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 company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 272.8% when compared to the same quarter one year ago, falling from $3,369.00 million to -$5,823.00 million.
- You can view the full analysis from the report here: BP