Brent crude oil prices for December delivery fell 3% to $82.19 a barrel on London's ICE exchange. Brent last hit this price in October 2010, according to MarketWatch.
Saudi Arabia chose Tuesday to change oil prices sold to U.S. and Asian buyers due to weak forecast for European growth. The Middle Eastern nation reduced prices for the U.S. and increased prices for large buyers such as China. Saudi Arabia is trying to stay competitive amid slumping oil prices, and the move further drove prices down Tuesday.
Separately, TheStreet Ratings team rates PENN WEST PETROLEUM LTD as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate PENN WEST PETROLEUM LTD (PWE) a SELL. This is driven by some concerns, 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 disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PENN WEST PETROLEUM LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- PWE'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 59.28%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- PENN WEST PETROLEUM LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PENN WEST PETROLEUM LTD swung to a loss, reporting -$1.78 versus $0.37 in the prior year.
- PWE, with its decline in revenue, underperformed when compared the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 14.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- PWE's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.36 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: PWE Ratings Report