Brent crude fell more than 4% to $66.12 a barrel, its lowest point since 2009. Brent was down 3.85% to $66.41 at 1:37 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.
"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 APACHE CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate APACHE CORP (APA) 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 poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that APA'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.
- APA, with its decline in revenue, underperformed when compared the industry average of 6.3%. Since the same quarter one year prior, revenues fell by 19.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- APACHE CORP 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, APACHE CORP increased its bottom line by earning $5.95 versus $4.91 in the prior year. For the next year, the market is expecting a contraction of 0.7% in earnings ($5.91 versus $5.95).
- The gross profit margin for APACHE CORP is currently lower than what is desirable, coming in at 29.33%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -38.35% is significantly below that of the industry average.
- Net operating cash flow has declined marginally to $1,896.00 million or 4.14% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, APACHE CORP has marginally lower results.
- You can view the full analysis from the report here: APA Ratings Report