Low commodity prices drive 2016 defaults, oilfields to shut

Wed Mar 9, 2016 12:46am EST
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* Half of 18 defaults in Jan-Feb in commodities - Moody's

* More oilfields to shut on poor economics - Bernstein

By Florence Tan

SINGAPORE, March 9 (Reuters) - Commodity prices at multi-year lows drove a rise in defaults early this year, and the oil sector could see still more unprofitable fields shut, industry analysts said on Wednesday.

Debt defaults in the commodity sectors rose in the first two months of 2016 from the same period a year ago, credit ratings agency Moody's said.

"Of the 18 defaults since the start of the year, half have been in commodity sectors," said Sharon Ou, a Moody's vice president and senior credit officer, in an e-mailed statement late on Tuesday.

Five of the defaults were in the oil and gas sector while four were in metals and mining, she said.

For the same period last year, there were 11 defaults in total and only one in commodities, Ou said.

Global oil dropped to their lowest since late 2003 at the start of 2016, while copper hit a 6-1/2-year low, both depressed by excess supply and a slowdown in China.   Continued...