WTI crude oil for November delivery was down 2.41% to $44.60 a barrel Monday afternoon, and Brent crude oil for November was down 2.33% to $47.47 a barrel.
Despite easing U.S. oil production, output from other counties have kept the global oversupply of crude at more than 1 million barrels a day in the 93 million barrels a day global market, according to the Wall Street Journal.
"With global stock levels at all-time highs and a huge ongoing excess of supply over demand now and through 2016 bullish inclinations need to be reined in," PVM analyst David Hufton told the Journal.
Citigroup lowered its global oil demand growth forecast for 2016 to 2.9% from 3.1% in a note to investors on Monday, which also helped bring down oil prices. The analyst firm had forecast 3.5% growth for 2016 in May.
Concerns about a slowdown in China also helped bring down oil prices, according to the Journal.
Southwestern Energy is an oil and natural gas company based in Houston.
TheStreet Ratings team rates SOUTHWESTERN ENERGY CO as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate SOUTHWESTERN ENERGY CO (SWN) 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 largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, 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 debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that SWN's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 26.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 36.91% is the gross profit margin for SOUTHWESTERN ENERGY CO which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SWN's net profit margin of -103.14% significantly underperformed when compared to the industry average.
- Net operating cash flow has decreased to $399.00 million or 31.81% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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, SOUTHWESTERN ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: SWN