Crude oil (WTI) is down by 4.94% to $45.97 per barrel, and Brent crude is falling by 5.51% to $47.35 per barrel this afternoon, according to the Bloomberg index.
Oil hit new five and a half year lows on Monday after Société Générale and Goldman Sachs both lowered their oil-price forecasts for the year.
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Goldman sees Brent prices averaging $50.40 per barrel this year, down from its previous estimate of $83.75 per barrel, and sees the U.S. benchmark reaching $47.15 per barrel versus its earlier forecast of $73.75 per barrel, the Wall Street Journal reports.
Société Générale said it is expecting Brent prices to be $55 per barrel, from $70 per barrel, and the U.S. benchmark to be $51 per barrel, from $65 per barrel in 2015, the Journal added.
"To keep all capital sidelined and curtail investment in shale until the market has rebalanced, we believe prices need to stay lower for longer," Goldman Sachs said in its report, the Journal noted.
Oil prices have been retreating since June due to concerns regarding the global oversupply. The selloff continued in November when OPEC announced that it had no intention of reducing its production rate despite the supply glut.
Separately, TheStreet Ratings team rates CHEVRON CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHEVRON CORP (CVX) 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 increase in net income, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 13.0% when compared to the same quarter one year prior, going from $4,950.00 million to $5,593.00 million.
- CVX's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
- Net operating cash flow has decreased to $8,680.00 million or 15.85% 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.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHEVRON CORP'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: CVX Ratings Report