NEW YORK (TheStreet) -- Oasis Petroleum (OAS) - Get Report  shares are slumping 5.74% to $10.44 on Tuesday along with declining oil prices due to oversupply concerns and expectations that the weekly oil data will show another increase in supplies, Reuters reports.

Crude oil (WTI) is tumbling 2.71% to $42.79 per barrel and Brent crude is retreating 1.96% to $46.61 per barrel, according to the CNBC.com index.

"It continues to show excess (supply) in the market in this quarter and going forward ... it's only really in the last quarter of next year when we could potentially see some re-balancing of the market," Natixis commodity strategist Abhishek Deshpande said, according to Reuters

In the week ended October 23, crude supplies are projected to have increased by 3 million barrels to 479.6 million, according to a Reuters survey. 

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In addition to this bearish outlook, oil prices were also being weighed down by the government's announcement to sell 58 million barrels of oil from its Strategic Petroleum Reserve between fiscal years 2018 and 2025.

Separately, TheStreet Ratings team rates OASIS PETROLEUM INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate OASIS PETROLEUM INC (OAS) 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 reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

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

  • The gross profit margin for OASIS PETROLEUM INC is rather high; currently it is at 66.89%. Regardless of OAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of -23.13% significantly underperformed when compared to the industry average.
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
  • 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: OAS