Brent crude fell more than 4% to $66.12 a barrel, its lowest point since 2009. Brent was down 3.88% to $66.39 at 1:23 p.m., according to CNBC.
The price drop occurred after Morgan Stanley reduced its 2015 forecast for Brent crude in a research note issued late Friday. The firm said Brent could drop to as low as $53 a barrel next year, although it forecast a base case scenario of $70. Morgan Stanley had previously expected $98 a barrel.
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"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015. Prices are set up to fall in the first half of 2015," the firm wrote.
Separately, TheStreet Ratings team rates MARATHON OIL CORP as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARATHON OIL CORP (MRO) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has slightly increased to $1,774.00 million or 7.84% when compared to the same quarter last year. In addition, MARATHON OIL CORP has also modestly surpassed the industry average cash flow growth rate of -1.72%.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that MRO's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- The gross profit margin for MARATHON OIL CORP is rather high; currently it is at 52.58%. Regardless of MRO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MRO's net profit margin of 15.01% compares favorably to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: MRO Ratings Report