Investors are in for dangerous news on the energy front within the coming weeks as a host of the industry’s largest corporations report quarterly results following the historic collapse in oil prices.
Estimations for U.S. energy industry earnings this year have plunged along with oil costs, weighing on shares along with worries over debt, layoffs, and potential bankruptcies.
Analysts see a 58.9% year-over-year slump in power earnings for the first quarter, steeper even than the 37.7% decline they projected at the start of the month, in accordance with IBES data from Refinitiv. For the year, energy earnings are estimated to slump over 95%.
Down a whopping 46% since Dec. 31, energy is by far the S&P 500’s worst-performing market this year. For many Wall Street strategists, it has turned into a marker that’s hard to recommend.
The supply-demand situation needs to enhance for the scope to get better, he stated. “What it needs, in a market with investors that have very little patience, is probably for some time to pass.”
Results to date bear out that the season will be dull for energy. On Monday, U.S. oil field services titan Halliburton posted a $1 billion Q1 loss on charges and outlined the largest budget cut but among high power companies.
Oil prices have bought off amid concerns about rapidly filling storage space at the vital Cushing, Oklahoma, delivery point, as demand plunges with the closure of businesses as U.S. states try to slow the coronavirus outbreak.