Fitch Solutions CDS Weekly Monitor 2 December 2014: US, EMEA Oil & Gas CDS Widens on Lower Oil Prices

2 December 2014

US, EMEA Oil & Gas CDS Widens on Lower Oil Prices

The oil and gas industry saw its credit default swap (CDS) spreads widen 6.7% on average in the Americas and 7.8% in EMEA as OPEC confirmed it would not cut oil production amid a drop in oil prices, according to Fitch Solutions. However, spreads throughout Asia-Pacific were mostly tighter as the energy-importing region took advantage of lower prices. 

"Investors are likely trying to assess the potential impact of changing market dynamics, including increased shale production in the U.S., on the oil and gas industry." says Diana Allmendinger, Director at Fitch Solutions.

Six of the top 10 CDS wideners in the Americas and EMEA were oil and gas companies including Nabors (23%), Chesapeake Energy (16%), Talisman Energy (13%), Transocean (11%), OJSC Gazprom (11%) and OJSC Rosneft (8%). In Asia, China's CNOOC saw its CDS spreads tighten 5%.  

Other companies like Kinder Morgan Energy Partners, GenOn North America, National Grid Gas, Ewe AG saw the biggest increase in their CDS liquidity as investors reassessed the impact that oil price volatility could have on the energy industry. 

 

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