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Monitoring credit trends with quantitative data

Credit Benchmark’s latest monthly oil & gas aggregates show:

  • Credit quality for large oil and gas companies in the US has continued to deteriorate for a fourth straight month, falling 3.4% since August of 2019.
  • The EU (ex-UK) and UK energy sectors have undergone a slow-but-steady improvement over the last several months, with EU oil and gas credit quality improving 14.6% since January 2018 and UK oil and gas credit quality improving 6.8% over the same time period.

US Oil & Gas

US oil and gas firms have seem their credit quality decline 4.8% since January of this year, with the sharpest declines occurring between August and November of 2019. Since August, credit quality for large US oil and gas firms has deteriorated 3.4%.

UK Oil & Gas

UK oil and gas firms saw their credit quality nosedive through much of 2016 and 2017 and pretty much flatline since then. While credit quality for the sector has improved slightly over the course of this year, the average sector-wide probability of default is still 37.0 basis points, which is 76% higher than that of European oil and gas firms located outside the UK.

EU (ex-UK) Oil & Gas

The EU energy sector has been the lone bright spot in the global oil and gas industry, with the companies that make up the Credit Benchmark aggregate driving a steady improvement in credit quality over the last two years. Since January of 2018, overall credit quality for the aggregate increased 14.6% to an average probability of default of 21.0 basis points.

About Credit Benchmark Consensus Aggregates

Aggregate Analytics are macro-level risk indicators that assess and compare credit trends and distributions across 105 countries, 300 industries and 75 sectors. Hundreds of trend-tracking, forward-looking Aggregates are available, reflecting Credit Benchmark’s expanding universe of 800,000+ contributed credit risk observations from the world’s leading financial institutions. For more information, see https://open.factset.com/products/aggregate-analytics/en-us.